Whilst the ultimate goal of good financial planning is to grow your wealth through appropriate investment strategies so you can achieve the life you want, knowing how to save money is also an important skill that will help.
There’s no point in going one step forward in terms of getting a good interest rate or investment return on your money, if you then take two steps backwards when paying more for something than you need to.
Knowing how to save money can have a more immediate impact on your lifestyle and can actually feel like you’re better off quicker than putting money away into savings and investments.
How to save money: 5 quick tips
There are lots of different ways in how to save money, here are just 5 simple tips that take little effort but can deliver big rewards:
#1 Switch your current account
- If you’re like most people you have probably been with your bank for years, but what are they actually doing for you?
- New style current accounts are available now with leading banks that offer cashback on spending, no overdraft fees, better interest rates and access to better savings rates.
- If you are worried about the hassle of switching, don’t be. The current account switching guarantee means everything can be switched over within 7 days.
- Better still, lots of banks are offering a switching bonus of £100 or more to open your new account.
- If you are not satisfied with the new bank after a year, repeat the process again.
#2 Get a credit card from the supermarket where you do most of your spending
- After paying your mortgage or rent, food is probably the next biggest expense.
- If you are like most people you probably use the same supermarket all the time.
- Well most supermarkets also offer their own banking services including credit cards.
- The beauty of having and using your favoured supermarket credit card is that you will receive benefits such as extra reward points or cashback.
- You are spending there anyway so why not get something back?
- Just make sure you only pay for your normal spending on credit card, don’t spend extra and make sure you pay the credit card off at the end of each month. Easy if you set up a direct debit.
#3 Get the best deal on Amazon purchases
- As Amazon seem to sell pretty much everything and at low cost it’s highly likely you have used them and will do in the future.
- Well a handy website with an unusual name camelcamelcamel allows you to copy and paste the link to the item you are looking at on Amazon. You can then see it’s price history and can set alerts for when the price drops to a point you are prepared to pay.
- Delaying a purchase is never a bad thing to do, you might find in a few days you don’t really need the item but if you still do, at least you will be getting it at a good price.
#4 Scrap the lottery and save into Premium Bonds instead
- The chances of winning the lottery are extremely remote and every £2 you spend to play it adds up over time.
- So instead save into Premium Bonds. You never actually spend money.
- It’s like a savings account but instead of paying interest you are entered into a prize draw every month with the chance to win lots of different monetary prizes up to £1 million.
- Better still you can take your money out at any time.
- This is why all lottery players should have £100 in Premium Bonds.
#5 If you earn more than £45,000 per year, get tax efficient
- The more you earn the more you are taxed.
- But there are now lots of ways to reclaim or save tax by making tax friendly savings and investments.
- Also don’t forget to use your tax friendly savings allowances into Pensions and ISAs.
- For more information give us a call.
The key to knowing how to save money is making sure the cash saving is worth your time cost. Time is your most precious resource (even more than money), it’s guaranteed to run out and we can’t get more of it. So don’t spend hours to save £1 here and there. Focus on the big stuff that doesn’t take much time.
How to save money and grow your wealth even further
If you followed the 5 tips on how to save money above then you will certainly feel better off. Better still, if you were to use these savings to contribute to a regular saver account or invest the money, you will supercharge your wealth and ensure you hit your targets much quicker.
If you would like us to carry out a money saving audit for you using our personal finance app then good news. We have currently waived our £150 fee. Give us a call to arrange.
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Stock market linked investments and any income from them, can fall as well as rise and is not guaranteed. Any figures quoted are for illustrative purposes and should not be taken as a forecast or guarantee. Past performance should not be seen as an indication of future returns and clients may get back less than they have invested.