Are you struggling to save money each month? You’re not alone. Many people find it difficult to break their spending habits and start saving for their future. However, it is possible to change your ways and develop positive habits that will help you reach your financial goals.
Here are 7 positive payday habits that can help you save money.
1. Make a budget and stick to it
You can’t be sensible on payday, or throughout the rest of the month, without planning ahead. That’s why any positive financial habits start with making a budget.
Track where your money goes each month by figuring out exactly what you have coming in, and exactly what will be going out.
You may be surprised how much money you’re actually spending on certain things. Once you know where your money is going, you can cut back on non-essential expenses and redirect that cash into your savings.
2. Pay your bills right away
Too often, people wait until the end of the month to pay their bills. Not only might this mean dipping into your savings to cover essential costs, it can also lead to late fees and additional charges if you run out of money before your next payday arrives.
To avoid this, make sure you arrange to have your essential bills come off at the beginning of the month. Arrange your bills in order of priority – rent, utilities, internet etc. – and ensure the most important bills are taken in and around payday while you’re still feeling flush.
3. Set up a direct debit for savings
Most of us tend to think of direct debits as money leaving our account to go elsewhere, usually towards bills like a credit card fee or a mobile phone contract. In fact, direct debits are really useful for keeping money in your pocket – or in your bank account, at least.
One of the best ways to save money is to have a set amount automatically transferred into your savings account each payday.
This way, you know exactly how much you’ll be saving each month, and the fact that the transfer happens instantly means you won’t be tempted to spend that money on other things – your savings are already factored in.
4. Set saving goals
While it’s always nice to have money put away for a rainy day, and saving for saving’s sake is no bad thing, it’s always helpful to have a savings goal in mind.
What’s your goal? Whether it’s buying a house, taking a trip, or even something long-term like retirement, setting specific targets will help you focus on what’s important.
With a strong savings goal – or lots of them – you’ll be able to focus your mind on the bigger picture every payday, and avoid the small temptations that pop up throughout the month.
5. Try locking your money in pots
We don’t mean physical pots, although whatever works. Actually, apps like Monzo can be a lifesaver on payday when you want to make your money last throughout the month.
On Monzo, you can break your account into multiple sections – known as pots – which each focus on a different savings goal, event, or expenditure.
You might have one pot for your essential bills, another for the night out you have in a few days time, and another for the holiday you have at the end of the year. Then all you need to do is direct money towards those pots as and when it suits you.
Even better, Monzo allows you to lock pots to beat the temptation to dip into them. You can lock the pot until you reach a certain savings goal, or until a certain date, and ensure that the money is there exactly when you need it.
6. Round up your spare change
Another technology tip incoming. As well as using apps like Monzo to lock your money in pots on payday, there are loads of apps out there that can offer a ‘roundup’ feature to boost your saving capabilities.
Roundup is another term for automatic saving. Essentially, any time you spend money using a particular account, you can configure that account to round up the spare change from that purchase and send it to a savings pot.
Let’s say you spend £4.55 on a pint of beer. The roundup feature will round this expenditure up to the nearest pound, meaning 45p will be sent directly to your savings. It may not sound like a lot on its own, but over a month of spending the money saved can really add up, and you won’t even notice it’s gone.
7. Give yourself permission to splurge occasionally
Balance is key when trying to maintain healthy finances. Just like dieting, if we completely deprive ourselves from experiencing enjoyment, we’re more likely to binge later on down the road, causing ourselves bigger issues.
It’s no different with your finances. If you find yourself so focused on saving money that you’re not doing the things you enjoy, then it doesn’t matter how much you’re saving – you’re still missing out.
Instead, incorporate moderate blowouts (or ‘splurges’) into your monthly budget. There’s no need to feel guilty – everybody deserves to enjoy themselves, and as long as you stick to the rest of the positive payday habits, then there’s no doubt you’ll still be making progress.
