Savings
Saving money starts by changing the right mental attitudes. Andrew Stucken offers ten pointers to developing a money-saving mindset.
Set spending priorities A little thought about spending priorities pays off. Decide which non-essentials you can do without.
Hand-in-hand with this strategic thinking should be budgeting – an essential step. Online budget planners abound to take the pain out of the task - yourmoney.moneyadviceservice.org.uk/tools/budget_planner.html is one example.
A useful trick to appreciate better the real cash cost of card purchases is to visualise the money stacked up before your eyes. A small mountain of pound coins or £5 notes in your mind’s eye as you reach for the plastic might make you think twice about that non-essential purchase.
Set goals There are various ways to approach the nitty-gritty of putting money away. This could be standing orders into regular savings products; or deciding precisely what you want to save for - or both. Thinking of those rewards at the end will provide motivation.
Sort your bill paying Paying by Direct Debit makes it easier to know exactly how much you have going out every month and gives greater control over your finances.
Appreciate what you have So many people are trapped in a vicious circle of toiling ever harder to buy things they don’t really need. It is easy to become eternally dissatisfied with what you have and forever want more. Re-framing your thinking takes self-discipline but will pay off in the long run.
Avoid wants-driven saving – don’t buy things just because they are on offer or appear to be bargains. If you didn’t need really them, where is the saving? Needs-driven saving is different – for example, using money-off vouchers at the supermarket or petrol station.
Pay down debt wherever you can. Putting the booty from any cost-cutting into whittling away what you owe will pay off in the long run.
Take your time – impulse purchases are a money-saver’s biggest pitfall.
And finally...remember the “80/100” rule – a counsel against perfectionism. In other words, 80 per cent success should be acceptable – there is no such thing as the perfect money-saver. Money-saving is not an end in itself but a tool for managing your life better and feeling in control of your life.
Written by Andrew Stucken, this article was first published on June 10, 2010. Andrew's opinions are his own and for general information only. Always seek independent, professional, financial advice.