Ways to save money – The top 3 strategies

Today, mastering the art of saving money has become a critical skill for achieving financial stability and long-term success, and let's face it, we're all looking for ways to save money. Whether you're saving up for that dream holiday, a new home, or simply building an emergency fund, employing effective money-saving strategies can make a world of difference to your savings account. In this blog, we'll dive into the three most popular strategies for saving money that have helped countless individuals take control of their finances and achieve their savings goals.

Strategy 1 - Budgeting babe - the core of saving

Budgeting is undoubtedly one of the most powerful tools at your disposal when it comes to saving money. Sounds simple, yet so underrated. You can’t get to a destination if you don’t plan on how to get there. Saving is the same, unless you put conscious effort into controlling your money, it easily flies out of your bank account. Creating and sticking to a budget allows you to gain a clear understanding of your income, expenses, and financial goals.

Here's how you can get started with a budget:

Track your income and expenses: It’s such a simple task but so many people don’t do it. With apps at our disposal nowadays it's even easier to find out exactly where your money has gone within a matter of minutes. Begin by meticulously tracking your income sources and every single expense, including household expenses, streaming services, credit card debt; everything. This will help you identify your monthly budget and where your money is going. You can then highlight areas where you can cut back and start saving money. You can then set a monthly savings amount.

Categorise and prioritise: Group your expenses into categories such as housing, transportation, food shop, entertainment, and savings. Assign a priority level to each category based on your financial goals.

Set realistic goals: Establish both short-term and long-term savings goals. Whether it's setting aside a certain percentage of your income each month or aiming to eliminate high-interest debt, having clear goals will keep you motivated.

Review and adjust: Regularly review your budget to ensure you're staying on track. Adjust your spending habits and allocations as necessary, especially if your financial situation changes.

I’ve written a full blog on how to budget, it talks you through how to set your financial goals, how to organise your money and best tips for budgeting.

Strategy 2 – Automation in progress: Out of sight, out of mind

There is absolutely no reason why you should not be automating your savings. People have told me they don’t automate their savings because they don’t know how much they’ll have ‘left over’ at the end of the month to save, and that’s their first problem. If you follow the budgeting tactics above and in my how to budget blog, you’ll know that you should work out how much you can save and move it into a separate savings account as soon as you get paid, not at the end of the month. Automating your savings is a clever strategy that helps you consistently save money without the temptation to spend.

Here's how to make it work for you:

Set up direct deposits: Arrange for a portion of your income to be automatically deposited into a separate savings account. This "pay yourself first" mentality ensures that your savings grow without conscious effort. Once it’s gone out of your everyday account, let it go. Don’t touch it. It's like you've never had it.

Use savings apps: Numerous apps are designed to help you save effortlessly.

There are several savings apps in the UK that can help you save money. However, if you're planning to save regularly and are consistent, a regular savings account would offer you better interest. Saying that, if you're really struggling to kickstart your saving habit, these apps are here to help you.

1. Plum

Plum is an AI-powered financial assistant that helps you save money automatically. It analyses your spending patterns and transfers small amounts of money into a separate Plum savings account. You can also invest your savings through Plum's investment options, however be aware of the fees if you're doing so. Plum offers 3.51% interest rates on its easy access savings accounts and is free to use.

2. Chip

Chip is an app that uses AI to calculate how much you can afford to save and automatically transfers the money into your Chip savings account. It also offers 4.84% interest on your easy access savings and allows you to set specific savings goals.

3. Chase Chase offers a very good 'roundup' account, where it automatically boosts your spare change and pays 5% interest. However, there is a catch, on the anniversary of your account opening your funds must be transferred to either a current or savings account with Chase, so you'd also need to open one of those accounts to benefit.

If you’re in the US, apps like Acorns and Qapital round up your everyday purchases to the nearest dollar and invest the spare change.

Remember that the availability and features of these apps may vary, so it's a good idea to research each one to determine which best fits your needs and financial goals. Always make sure to read reviews, terms, and conditions before using any financial app.

Strategy 3 – The frugal shopper

Saving money doesn't mean sacrificing your quality of life. By adopting savvy spending habits and making informed purchasing decisions, you can stretch your cash further and start saving money:

Comparison shopping

Before making a purchase, take the time to research and compare prices from different retailers, especially when shopping online. Online tools and apps can help you find best ways to save money, such as the best deals and discounts.

Embrace the 3 day rule

For non-essential purchases, implement a 3 day waiting period. If you’re super impulsive, hold your plans it for 30 days. If you still want the item after this time, it's more likely to be a well-thought-out purchase rather than an impulse buy.

Utilise vouchers and cash back offers

Vouchers and cash back offers can significantly reduce your expenses. Look for deals both online and in physical stores to maximise your savings. Using cards such as cash back credit cards is also very beneficial.

Cook at home

Dining out frequently can take a toll on your budget. Cooking meals at home not only saves money but also allows you to make healthier choices. There are thousands of free recipes online, get creative. Another trick I have personally done is order from hello fresh or gusto, these not only give you all the ingredients you need for your weekly meals, but they also send instructions on how to cook them. You can then keep these recipes, and reuse them.

Above are the 3 best strategies to use when trying to save money, they work best if you combine them all together but if you’re still fairly new to this, start with one and build yourself up.

Savings accounts

A bonus strategy to saving money is learning not only how to save money, but also where to keep it to make it work for you. Enter, savings accounts.

Savings accounts come in all shapes and sizes, they are tailored to your needs and depend on what you want to do with your money. Generally, the longer you can keep your savings locked up, the higher the interest rate will be. So for example, if you wanted an easy access saver, your interest rate would be slightly lower than a high yield savings account, but it gives you the benefit of accessing your money if you really needed it.

For savings such as your emergency fund, an easy access saving account could work best, however, if you have long term goals and are sure you won't need access to those big savings, you could benefit from much higher interest rates if you limited your access.

Check out our blog on the different types of savings accounts you can get to decide which one will work best for you.

Achieving financial security and meeting your savings goals requires a combination of discipline, strategy, and smart decision-making. By embracing the three popular strategies outlined above – budgeting, automating savings, and cutting costs – you can take control of your finances and pave the way for a brighter financial future. If you want more money saving tips, read our blog on 25 top tips for saving money.

Remember, every small step you take toward saving money brings you one step closer to achieving your dreams.

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