Many of us start the year with good intentions, but it’s not always easy to try and spend less and save more when you have bills to pay. The good news is that it doesn’t have to be painful to stick to a budget and start increasing your savings balances. Here is a handy guide to help you improve your financial situation in 2020 and beyond.
Make budgeting a habit
Whether you’re guilty of burying your head in the sand when it comes to checking your bank balance, or you don’t have time to track transactions, it’s hugely beneficial to make budgeting a habit. You might think that it takes ages to draw up a budget, or that budgeting is an unnecessary hassle, but you’d be wrong. With online banking and apps you can download to manage your money, it’s never been easier to keep track of what you’re spending. In an age where we tap our phones or a card to make a payment, it can be difficult to remember how much you’ve spent in a single day, let alone over the course of a month. Making a budget and sticking to it will help you reduce spending and save more.
Use your budget to keep control of spending, to set aside money to save and to identify areas where you could make cuts. If you’re eating out at least twice a week, for example, or you’re spending £50 on lunch each week, you could save a fortune by making simple changes to your routine. Highlight areas to work on, and figure out ways to lower spending on non-essentials. Taking a packed lunch to work is a great idea, and it’s also beneficial to explore fun, affordable ways to hang out with friends and family. Instead of going for a meal or to the cinema, have dinner together at home or organise a film night.
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Look after the pennies
At the risk of turning into your parents and repeating proverbs and sayings all the time, it’s wise to live by the mantra ‘look after the pennies, and the pounds will look after themselves.” You might think that spending £2-£3 on a takeaway coffee every morning is an essential investment, but if you calculated the total cost over the course of a year, you’d be staggered at how much of your salary you’re spending on a drink. Instead, you could save by making a cup of coffee when you arrive at the office. Little things soon add up, and if you can minimise spending on small items that you don’t need, this will contribute to big savings. Another step you can take is to round up your transactions and save the pennies. You can use apps to save your change, for example, if you pay £0.47, you can round up to £0.50 and save the 3 pence. Every time you round up, you’ll add to your pot.
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Look for ways to maximise your income
If you work full-time, you might be thinking that it’s impossible to boost your earnings. While you might not have a huge amount of time, there are ways you could potentially increase your income. Here are some ideas to give you inspiration:
Setting up a side hustle
More and more people are using their skills, knowledge, talents and experience to bring more money in. A side hustle can help you generate more disposable income, and it could even lay the foundations for a career change in the future. There are endless possibilities with a side hustle. You could use creative skills and talents to make money through painting, baking, sewing, designing or writing. You could teach people in your spare time if you speak different languages or you play a musical instrument. You could look into consulting if you have expertise in marketing, accounting or business development, for example. Think about your skill set and your passions, and start small. You can decide how much energy, time and money you devote to your venture. Even a couple of hours a week could make a huge difference.
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Investing your money
If you’ve got a pot of money set aside for a rainy day, have you thought about trying to increase its value? The possibilities that are open to you will depend largely on how much you have available and whether you’re looking for short-term or long-term results.
Property investment is one of the most popular and lucrative options for investors who want to grow their money. If you’ve inherited some money, or you’ve managed to save a substantial amount, it’s worth exploring the possibility of buying bricks and mortar. You can buy to let or consider taking on a project and selling at a higher price. If you choose to rent out a house or flat, you’ll have a monthly income, as well as an asset that should appreciate in value over the course of time. If you’re looking into developing a property, you’ll probably make money in the short-term, but you could reinvest the funds to buy another house or start a portfolio. With any type of property investment, location is crucial. It’s also critical to decide what you want to do with the property and to create an ideal buyer or tenant persona. If you’re hoping to rent to students, for example, search for a property that offers affordable accommodation close to universities and colleges, cafes, bars and restaurants and transport links. For families, proximity to good schools is essential.
Another investment option you might be considering is trading. The movement of the stock market provides opportunities to make money, and you don’t need to have a huge balance to get started. If you are new to trading, proceed with caution and take advantage of expert advice. Research the market, get to know the jargon and terminology, and gain an understanding of how different investment opportunities work. If you’re looking into binary trading, for example, it’s hugely beneficial to look for successful, reliable, reputable binary options brokers. Working with a broker enables you to access information and to spot positive signs, which could develop into lucrative actions. If you’ve never traded before, having a demo account can be useful. This enables you to use virtual money and it can help you understand what the processes involve and try out different platforms before you decide which broker to use.
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Training and further study
This might not seem like the most obvious way to make money, but investing in yourself can be very lucrative. If you’re hoping to secure a promotion at work, for example, or you’d love to change careers and get a better-paid job, undertaking training courses or further study is an excellent way to boost your chances.
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Make sure you’re getting the best deal
If you took a moment to work out how much you spend on insurance, gas and electricity, TV, broadband and your mobile phone each month, you might be shocked. For the majority of us, household bills account for a large share of our incomes. While these utilities, services and products are often essential, there are ways to cut costs. One of the best things you can do to save is make sure you’re getting the best deal. When was the last time you shopped around instead of automatically renewing a pet, car or home insurance policy, for example? We often assume that it’s a hassle to switch providers and that there’s no point in changing a policy, but there are major savings on offer. Competition is fierce, and this means that insurance, broadband and utilities providers often provide incredible incentives for new customers. As a loyal customer, you could be missing out. Use the Internet to compare prices and don’t be afraid to give your existing provider a call and see if they can match or even better the deals you find.
Another positive step you can take to make sure you’re privy to offers and discounts is signing up to sites that send out emails with codes and vouchers attached and subscribing to sites or stores you visit regularly. If you’re buying gifts, for example, and you’ve got a wish-list saved, you can wait for a code to come through and then save on your order. There are deals on everything from hotels and pet food to clothing, shoes, groceries, days out, film tickets and restaurant meals, so it’s worth registering. If you’re shopping online, and you find something you want, it’s also a good idea to check prices before you buy using a search engine. Type in the product name or code or a brief description, and you’ll be greeted with a list of retailers and prices. You can use this tactic to save on all kinds of items, including dog food, nappies, TVs, laptops, games consoles and trainers.
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You might assume that you need to make sacrifices to save money and earn more, but that isn’t always the case. Learning to budget, shopping around for great deals, using your talents to set up a side hustle, investing your cash and developing your skills can all help to boost your bank balance.
