Monday 13th June 2022
What's it all about?
This guide is designed to help you:
Saving a significant chunk of money doesn't have to feel like a mountain to climb. In fact, you can build a decent nest egg in little time without having to massively change up your lifestyle.
The idea of transferring £2,022 straight out of your current account into a savings account that’s not meant to be touched is scary for many. If you’re worried you’ll struggle to cover bills and living expenses, it’s just not possible.
But that doesn’t mean it’s beyond your financial reach to save that much in a year. In fact, when you break it down, it’s suddenly much more manageable.
Take that £2,022, and divide it among the 52 weeks of the year. Don’t worry, we’ve done it for you! It works out as £38.88 a week, which of course sounds a lot easier to do. Set a reminder each week to transfer that £38.88 into your savings account so you don’t go spending it!
Or, better yet, if you have both a checking and savings account with the same bank, you can set up an automatic transfer. So, the money goes straight into your savings each week. You won’t even have to think about it.
Okay, we know – simply transferring £38 once a week isn’t much of a challenge for some. But if you’re new to saving, it’ll help you get into the habit of putting money aside for the future. However, if you think you can afford to put away a little bit more each week, why not add a bit of fun to your saving journey?
Here’s how it works. On Monday, transfer £1.50 into your savings. Then on Tuesday, £3. Then Wednesday, £4.50. Each day, increase the amount you save by another £1.50.
By the time Sunday comes around you’ll transfer £10.50 in your account, making it £42 after a week. The following Monday, restart at £1.50 and work your way up each day, carrying on the same pattern for a year.
If you stick to the challenge week in, week out for a year, you’ll have £2,184 saved up and ready for you to use! Take the family on holiday, buy new furniture or even invest it. Not bad!
We get it – Contactless payments and paying for things by phone mean it’s easier than ever to spend without thinking about it. But have you ever actually stopped to look at how much money leaves your current account? You might be in for a nasty shock.
Plenty of banking and budgeting apps out there can split your payments and categorise them. They’ll separate them into necessities like energy bills, shopping trips for clothes, and leisure activities like gig tickets and restaurant bills. With a breakdown like this, you can see the things that you’re perhaps spending a little too much on and cut back a little to make a difference.
For example, are you going out to eat or getting a takeaway every week? The average cost of a restaurant meal in the UK is between £15 and £25. Let’s assume for argument’s sake that each meal costs £25 – just by cutting out a single restaurant visit per month, you’ll save £300 a year. That puts you well on your way to your savings goal.
And what about streaming services? Fair enough, they only cost around £10 a month each, which is very reasonable – but how many are you signed up to? Around 60% of British households now pay for at least one streaming subscription, but we reckon the majority are paying for more than one. Netflix, Spotify, Amazon Prime, Apple TV, Disney +, NowTV- the list is endless!
When it’s a direct debit payment, it’s easy to forget you’re paying for the service until the money leaves your account. Take a look at how often you use each subscription service and see if it’s worth unsubscribing for a while.
If you use it, keep it! It’s not that big an expense for keeping entertained. But if you’re not using one anymore, unsubscribing for a year could save you around £120!
The 1p challenge is a great way to save hundreds of pounds over one year without hitting your day-to-day finances. But the truth is, if you’ve got a target of around £2,000 to save, you’ll need to step up your game a bit.
Briefly though, the 1p challenge requires you to save a penny on the first day, then 2p the following day, then 3p, adding a penny each day until the end of the year when you save £3.65. After a full year, you’ll have £667.95 saved.
It's great but it still doesn’t come close to that £2000 target. However, that doesn’t mean you can’t do a 365-day challenge of your own. Instead of starting off with 1p, start off with £3.01. That’s roughly the price of a cup of coffee on the high street. Just like the original method, add a penny to the amount you save every day. By the end of the year, you’ll be saving around £6.60 (or the cost of lunch) every day. And when you add it all up after you’ve completed your year of saving, you’ll have well over £1700 saved up! That’s not that far from the target at all…
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It’s no secret that groceries are really starting to shoot up in price as a result of inflation, import costs and availability. But there are always a few useful cheat codes you can use to keep that weekly supermarket bill to a minimum.
Most supermarkets have reward schemes that take money off your bill. Usually when you spend a certain amount, buy certain products, or return a number of times to the store. For example, Tesco’s Clubcard reward scheme marks down the price of particular groceries across the store, but you only pay the discounted price when you’re a Clubcard member. So, what’s stopping you?
Some products end up being up to 50% cheaper with rewards schemes, so keep an eye out for the items that are on offer and choose these over the fully priced alternative.
But of course, it’s not just Tesco. There are also app based reward schemes like Lidl Plus with exclusive rewards just for app users. And Sainsburys take £2.50 off your bill for every 500 Nectar points you earn. So, whichever supermarket you go to, it’s always worth signing up to their reward scheme if they have one.
If you’re not a member of any reward schemes, don’t worry. There’s still one big thing you can do to save money on your bill: go for supermarket own-brand.
You’ll always find people that claim to be able to taste a great difference between branded and supermarket own groceries. But in most cases, the biggest difference is in price.
The staples on your shopping list, like eggs, flour, oats, spices, can cost anything from 60p to over £1 more when you go for the branded version.
Take a look at the items you regularly put in your basket to see if you could do with a brand change. It may seem like it’s nothing big at first. But, by the end of the year, those small decisions will have turned into big savings!
There you have it! Those are just a few ways to save some cash in 2022. Of course, this isn’t an exhaustive list, and there are plenty more challenges and ideas out there, so do your own research too. Remember though, some ideas won’t suit everyone. Make sure you consider your full personal and financial circumstances. And if you’re in doubt, speak to a financial advisor.
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