Effective Savings Strategies to Improve Your Finances

What a better way to kick off a blog than by sharing straightforward advice on managing your money and adopting common saving strategies? These are methods many people, including myself, use to improve their financial situations.

Track your expenses

The first step I took to improve my finances was understanding where my money was going each month. Whether you are paid monthly or weekly, tracking your spending over the last three months can provide valuable insights of where the money at your particular case. Dedicate just half an hour at the start of each month to log the previous month’s expenses (quite easy if you always pay by card). I have been doing this for nearly six years now, it has become an habit, and it now allows me to make precise forecasts about my financial future.

To track expenses, I use two tools, a simple Excel spreadsheet and on of the many apps available for expense tracking. These tools help monitor what’s coming into your account and what’s going out, making it easy to determine how much you’re saving or losing. Categorizing your expenses is key. Here is how I break mine down as a sample:

• Mortgage / Rent: Your monthly housing costs.
• Bills: All household utilities, including mobile phone costs. For quarterly or annual bills (e.g., gas, water, taxes, insurances), divide them by the months they cover to get a monthly figure.
• Car: Expenses like fuel, repairs, cleaning, and accessories, excluding insurance (I put insurance under bills usually).
• Household living expenses: Groceries, furniture and any other home-related items.
• Leisure: Going out, gaming expenses, sports, or even clothes (you may want this as a standalone category).
• Holidays: Include all travel-related expenses under this category, I use to include in here from the airport parking and taxi / bus to the flights, accommodation and transport once in holidays. I would also add within this category food and drinks during those days to allow a better control of cost of holidays.
• Investments: I set aside a portion of my salary for investments, and as investments can go up or down, I treat it as a ‘expense’ as it is not liquid money in my account. Luckily for me, this ‘expense’ is doing good profits for me.
Reduce your spending

Once you have tracked your expenses, it is time to analyse and identify areas where you can cut back. This is quite a personal process where you choose where to trim a bit, but here are some example from my own experience:
• Meals out: Preparing my own meals for the days I am in the office instead of eating out during those days helped me saving almost £10 a day. That is nearly £200 a month shaved off! Obviously home-made food has a cost too, but nowhere close to that figure.
• Bills: I was paying £30 on my mobile plan, but looked around for different deals and I am getting exactly the same amount of data with unlimited minutes and messages for £8, over £250 saving for a year.
• Mindful shopping: Avoid impulsive purchases by waiting a few days before buying! You might like something a lot, but let it cold down in your head to think if you really need that. On my sins, I bought an expensive smartwatch which I rarely used for its ‘smart’ features. Looked cool for a week, now is just a watch.
Set clear savings goals

This tip ties everything together. Everyone has goals and dreams they want to achieve, but many fail to plan financially for them and end getting bad deals or costly loans.

As an example, if you are planning a holiday pack for next August, make your maths now! How much will be costing and how much do I need to save each month to achieve that amount by that time. Applying this to your different goals, breaking them into manageable monthly savings will facilitate your saving skills.

These simple strategies can make a significant difference in your financial stability while paving the way for achieving your dreams. Start small, stay consistent, and watch your savings grow!