It’s a new year and lots of us take this as a chance to start afresh, financially or otherwise. I have to say I’m not a massive fan of new year’s resolutions as I think if you want to make a change, do it now! Don’t wait for January to come around if it’s july. Having said that, at the start of a new year I do like to review my goals and figure out what I can do better. Here are the ways I aim to save money this year – some are brand new so may not pan out but others are tried and tested and so I intend to carry them on.
This is definitely something new for me, but having read about it on several money saving blogs and websites I decided it was something I wanted to try. One of my current problems is although I make a monthly budget, everything is coming out of the same bank account and so it’s not long before I have somehow overestimated what I have left and end up getting essentials such as petrol on my credit card by the end of the month.
With piggybanking, you split your money up into different “pots” – for example, car maintenece & petrol, grocery shopping, spending money, etc. This could either be done by withdrawing all the money and keeping in different piggy banks or envelopes ready to spend, or by having multiple bank accounts to transfer this money into. I have opted for a combination of the two by withdrawing my spending money as cash, and having a number of instant savings accounts set up with my bank for other expenses. These are free to set up with most banks and you should ensure that transfers can be made instantly between the accounts – even easier if you use a mobile banking app.
So far I have set up savings accounts for car petrol & maintenence and household / grocery shopping. I generally need to fill my car up twice a month at approx £45 a tank so I have rounded this up to £100. I have also rounded up my household expenses to £220, I roughly spend around £180. By rounding up I am hoping to save a bit up each month for the car service / MOT and any unexpected household expenses. All the rest of my bills are paid via direct debit so they will stay in my current account and go out as normal.
I am looking forward to seeing how I get on with having my spending money as cash – this is something I have never done before! As I am on a fairly tight budget I have worked out I have approximately £150 a month to spend on myself – this is a daunting prospect to say the least!
Yolt is a money managing app I have recently stumbled across that seems to be proving a hit with money savers already. By registering all your bank accounts and credit cards, it provides you with overviews of how much you are spending on certain aspects of your life – from coffee to holidays to energy bills. The idea being that if you are shocked by the amounts, you can then do something about it! Once I am up and running with it I intend to do a full blog post about it.
3. Everyday Emergency fund
I’ve added the word “Everyday” in front of this as I know many people have an emergency fund – but what counts as an emergency? Broken washing machine? Car repair? Or tickets to see Taylor Swift? The latter probably wouldn’t pass muster, so when you’re on a tight budget but suddenly have a friend’s hen party or other social engagement, and missing it isn’t an option, I would normally reach for my credit card. This year I am determined not to do that, but I am also determined not to sit in my house miserable all year so instead of putting all my spare cash on my credit card, I am setting aside £100 a month for these everyday emergencies. Hopefully there will be some left at the end of the year and then I can decide what to do with it. This might not be what the money saving purists would do, but the Skinny Spending philosophy is low calorie budget, full fat lifestyle! I’m all about not missing out on things (within reason) when your budget is a size 0.
4. Budget for Christmas with Plum
I have mentioned Plum before – it is an amazing little savings app that automatically skims your bank account every few days, so money is saved without you even noticing! I strated using it last April and by Christmas it had saved me over £400 even on my part time wage. As it takes a few days for the money to transfer back into your bank account, I have decided to use it for my Christmas fund this year so I’m not tempted to dip into it. Hopefully I will have at least £500 by Christmas without even noticing!
5. No Spend days
I have tried these in the past but I have to admit, without tracking them I lost focus. I am going to track them in my this year, but you could simply tick them off on a calendar or diary each day.
There seems to be a lot of debate as to what actually constitutes a no spend day – I would say, make your own definition and stick to what you’re happy with. For me, I don’t include any direct debits coming out, or buying groceries / petrol etc out of the money I have earmarked for these costs (see Piggybanking above). I work 3 days a week so these are easy no spend days if I take my own lunch to work. The remaining 2 week days I am at home with my toddler. We go swimming once a week which is free as part of my gym membership direct debit, the other day we go to a playgroup which is £1.50. As these are regular activities I don’t count them as spending, however if I decided to got to a soft play and have a coffee and a cake then theres not really any way I could say thats a no spend! My target this year is to have 4- 5 no spend days a week – this should be fairly easy to achieve as long as I step away from the online shops!
So there are my aims for 2018. I hope I can stay on track! Do you have any financial aims for 2018? Leave me a comment and let me know.