This is the first ‘top 10 tips’ post in my new little series- I’m planning on writing a few as I know people like to read blogs for lifestyle tips as well as beauty, travel, and everything else! If anyone knows about managing their money, it’s me- people have always complimented me on my ability to budget and stop myself splurging, and I wanted to share my favourite tips with you all.
I’d like to start this post off by saying that everyone is different- some of you might have quite a lot of money but just don’t know what to do with it for the best, and some of you may be struggling to make ends meet and desperate to be comfortable with your finances. I’m definitely towards the latter end of the spectrum at the moment, having an unpaid internship, horrendously low student finance due to being on placement year (seriously, sort it out guys) and only one part-time job as an income. But I have been at the other end- comfortable with my finances and being able to save a lot of money due to working full-time. Having a job gives you more experience than most other things in life, as it teaches you to be responsible as an employee, an adult, and with your hard-earned cash. Bearing this in mind, these are the tips I use even when I have more money- saving has always been my priority so I’m pretty frugal regardless of my work situation!
1. Write down what you spend
This is essentially a fear tactic- I have just started doing this and I hate spending because if I write it on paper, it’s all too real! You have to be strict for it to work (I’m not doing so well at the moment- oops!) but it can be so effective at eliminating pointless spending- sometimes you just buy the odd thing without thinking about it but it all adds up!
2. Budget, Budget, Budget!
I always do a monthly budget, especially at the moment now I barely have any income! Write it in a notebook, in your phone, on a spreadsheet- whatever method you prefer- but it helps to have it handy so you can refer back to it. Include all your regular outgoings- check your online banking to make sure you’ve got them all- and try and plan for any events you know you’ve got coming up. If I know I’m going out with friends or going on a big shopping trip, I’ll include that, because there’s no point denying yourself treats! Speaking of which…
3. Allow for extra spending in your budget
Budgeting for extra allowances that aren’t regular bills or events you’ve already planned for is essential if you want to stay out of that overdraft and keep in control of your money. It’s always a good idea to set aside some money for extra expenditure as you can’t plan out your whole month- what if a friend wants to go for a spontaneous coffee date? Having a fallback means you don’t have to worry, especially if you follow the next tip.
4. Withdraw money you’ve allowed for extra expenditure
If you know how much money you’ve got to spend on extras like coffee or that lipstick you’ve been lusting after, withdraw it so you have the cash in your hand, and only take a certain amount with you for the day. Not only will it make it harder to part with your hard-earned pennies on frivolous spending when you can see them filling up your purse, but it means that once it’s gone- it’s gone. No sneaky card payments or drunken jagerbomb-fuelled withdrawals!
5. Open a savings account and transfer leftover money into it
I just recently started doing this after reading this tip on Em’s blog, and it’s such a great way of saving without realising it! I already have a couple of different bank accounts I use for saving, and when my bank balance is at, for example £87.10, I’ll transfer £2.10 into the savings account to make it a round £85 and so on. What would you really spend that £2 on anyway? Wouldn’t you rather put it towards a little holiday or a staple leather jacket?
6. For serious saving, open a less accessible account
This has worked wonders for me- when I did my summer placement last year, I saved almost all of my earnings and put them into a savings account with a different bank. It’s not set up on online banking- all I have is the account details to transfer money into, and I have to go into branch to physically draw money out when I need it. It stops you from chipping into it at the touch of a button for that purchase you probably shouldn’t be making! I wouldn’t have had any spending money for my trip to New York without doing this- it really does work!
7. Start a ‘penny pot’
You know all those annoying things that are £4.99 or £2.95, and you end up with those annoying 1, 2 and 5p’s knocking around in your purse, which you can never use? Instead of just letting them hang around in there, useless, put them into a pot or jar (preferably an inaccessible one like a tin if you’re wanting to save a decent amount) and although it might take a while depending on how much cash you use (if you’re following #4 it could be quicker than you think!) you’ll end up with a decent amount of pennies that can accumulate to serious cash. If you add a few 10 and 20p’s in then you could have around £15 after a couple of months, which I normally put into the Coinstar machines at the supermarket to spend on my shopping, meaning you can spend that money you saved on something else! Or, you could be that guy and take your jar full of pennies into the bank for them to count out and deposit into your account or savings. Another way to save without realising you’re doing it!
8. Always save unexpected income for emergencies
If I get any extra money, from freelance design work for example, that I haven’t included in my budget- into the savings it goes. If I hadn’t saved all of this money then I would have had to stay on waitressing and living in a crappy situation for a lot longer, so although I’m not saving it for the future, it’s a good reserve that’s helping me out right now until I start my paid summer placement. Although it can be tempting to just spend money you weren’t expecting to have on a shopping trip or big night out, try to be strong and think of the future- if your laptop breaks mid-essay and you need a new one- you’ve got yourself covered (or at least enough to pay a few months on finance for one). If you hadn’t saved that money, what would you do if no one else can lend you it and you’re laptop-less until you can afford a new one?
9. Use your overdraft for emergencies only (unless you’re a student)
I say unless you’re a student, because I know that if you don’t get the financial support you really need (like many students) then it’s nearly impossible to live outside your overdraft. I can’t decide if it’s a blessing or a curse that I didn’t get a student bank account, and therefore only have a £300 overdraft. At the moment, I am really trying not to rely on my overdraft as I hate being in debt (apart from student loans- fun!) and it bothers me that it’s not ‘real’ money. I sometimes go into it by a little bit towards the end of the month, but I’ve been really good recently even though financial times are tough. It’s important not to rely on your overdraft if you can, because at some point you will have to pay it back- the further in you get, the more debt you’re in. Remember, the bank can request the money back at any time- that’s scary!
10. It’s OK not to be OK
Finally, although these tips require you to be quite strict with yourself- don’t panic! Everyone has slip-ups, including me, and we all slip into our overdraft or dig some money out of our savings for something we don’t really need, but that’s okay. If you stress yourself out over every little penny you spend, you won’t be any happier than if you were in a lot of debt because you’ll be constantly worrying. Don’t beat yourself up for buying yourself lunch instead of eating your oh-so-tempting cheese sandwich from home- we all need a treat, and if you really couldn’t afford it, then you wouldn’t be able to buy it at all! Cut yourself some slack.
I hope these tips can help some of you out- if they even make one person’s life a bit easier then I’ll be truly happy. Please let me know in the comments if you do decide to try any of these, or if there’s any other tips you like to use- I’m always looking for new ways to save!
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