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Whether your goal is to pay off nagging credit card debt or save up for something special, the New Year can be a great time to get a tighter hold on your money.

I’m not the worst with money but I could definitely be better. Living in London is EXPENSIVE and I find that my wage pretty much just covers my living costs – rent, bills, my train travel card etc.

Because of that, I’m often relying on freelance work to boost my savings each month. But recently, I’ve started to take charge of my spending, to make sure I’m spending money within my means and saving up for the things that really matter in life. 

Is saving money on your radar for 2020? If so, why not try one of the methods below. These are all methods I’m using right not to help me budget – as well as some that have worked in the past for me. 

If I’ve left your favourite saving method off the list, please let me know — I’m always excited to hear what works for you!

(Please note: I am not a financial expert in the slightest, I am merely sharing some handy budgeting tips that have helped me in the past. The below should not be construed as professional financial advice!)

£2 COINS

I saw this tip in an article the other day and thought it was pretty nifty – then I remembered that this was something my Grandad used to do in the late ’90s/early ’00s. He’d pop them somewhere safe and every few months he’d empty the coins out and share the money out between us all.

As a kid, I had no idea how much he was putting aside – the woman in this article reckons by putting her £2s aside she saved £386 in one year. I doubt I would barely scrape together £10, especially as I never carry any cash around with me – but for those following the next tip it could be doable.

P.s. at the time of writing this (towards the end of January), I currently have £6. Hello, early retirement.

MONTHLY ENVELOPES

This is one method I SWEAR by when I have a busy month: I work out what money I need for everything and then I’ll withdraw all the cash from my bank account (I’ll always make sure I leave enough in my bank account to cover my direct debits/bills).

Then I’ll sort all my cash out into envelopes. Say I’m going to the cinema, I might pop £10 in an envelope to cover my ticket. Or if I know I have birthday drinks coming up, I might put £20 aside in an envelope just for that.

By separating my money into these envelopes it helps me to have a complete overview of my outgoings. It also helps me to stick to my budget – no over-spending by a couple of quid here and there, which is so easy to do when you pay by card and your ‘invisible’ money seems never-ending. 

Top tip: If possible I like to put aside some cash in a separate folder – for emergencies or a little weekday treat, so that I don’t feel like I’m depriving myself of every little joy in life. But, if that money runs out and I get invited somewhere for a drink I have to say no. This method therefore requires you to have some self-control but it does work!

SAVE THE CHANGE

Many banks now offer a ‘Save the Change’ option where, when you buy something with your debit card, the money is rounded up to the nearest pound. The difference is then transferred over to a savings account, making it super easier to save as you spend.

For instance, say you buy a tea for £1.40, your bank will take out £2 – and move the 60p difference into your savings account.

In January alone I’ve managed to save £10 using my bank’s Save the Change, which isn’t too bad considering I also use the ‘Save the Change’ function on this next app…

PLUM

My friend introduced me to the Plum app last year and I’m now OBSESSED. It’s an ‘AI assistant that grows your money’. You link it to your bank and, similarly to the ‘Save the Change’ function at your bank (see above) it will round up whatever you spend to the nearest pound, putting these pennies aside in a separate account so you can save without even realising it. There are different savings modes you can choose: the ‘default mode’ is just your average, normal amount – but if you’re REALLY keen to save you can switch to ‘Beast mode’, which will adjust the amount Plum sets aside for you by 75%.

Plum also goes one step further by analysing your bank account and your spending habits to see how much you can safely afford to set aside each week – without affecting your daily life.

I did this for the last few months of 2019 and I managed to save over £100 to take to New York – and honestly? I didn’t notice the money leaving my account at all.

I plan to keep going with Plum throughout 2020, leaving the money aside until the end of the year. Maybe that’ll be my Christmas money all sorted?

1P SAVING CHALLENGE

I’ve seen variations of this money challenge telling you to put aside £5 a day/£20 a week/£903582 a second in order to save something ridiculous by the end of the year.

While I’m all for going for a savings challenge that suits you, the pure fact is that some of these challenges just aren’t attainable for the vast majority of people. 

That’s why I like the 1p saving challenge. I’m giving it a go for the first time ever this year – why not join me? It asks you to put aside 1p on the first day of January, 2p on the second, 3p on the third…and so on, until you reach £3.65 on the final day of the year.

By doing this, you can save £667.95 in one year.

If you – like me – can’t face going into your banking app every single day to transfer over however much money you need to, you can simply transfer over the monthly total in one go. This works out as follows:

  • January: £4.96
  • February: £12.74
  • March: £23.25
  • April: £31.65
  • May: £42.16
  • June: £49.95
  • July: £61.07
  • August: £70.68
  • September: £77.55
  • October: £89.59
  • November: £95.85
  • December: £108.50

I’ve been transferring over the money as soon as I get paid so I don’t get tempted to spend it. I like it as it’s slowly building up the amount you put away – so even though you only put aside a couple of quid in January, you can learn to adopt better ways of budgeting (and hopefully build up a bit of a buffer in your bank account).

Remember, though, that there’s no hard and fast rules on the order – so if you have a particularly quiet month at the beginning of the year, you might want to tick off one of the larger amounts.

Alternatively, the eagle-eyed among you might just realise that the total of £667.95 works out at around £55.66 a month. This could also be another way for you to do it!

£1 SAVING CHALLENGE

If you want to be a little stricter with your saving you could play the ‘£1 saving challenge’ which tells you to put aside the following amounts each day:

  • Sunday: £1
  • Monday: £2
  • Tuesday: £3
  • Wednesday: £4
  • Thursday: £5
  • Friday: £6
  • Saturday: £7

That’s £28 each week, maths fans.

Following this will save you £1,456 over the course of the year, which isn’t too shabby.

I’ll be straight up with you on this one, though: this is the one method on this list I haven’t tried yet because I think there are only so many money challenges you can take on at once. Maybe next year though?

MONZO

If you haven’t heard of Monzo yet, where have you been?! It’s the bank that’s taking the world by storm thanks to its easy ability to manage money.

Join up and you’ll receive a debit card. You use it just as you would any other bank account. Simply get your wage paid straight in and you’re ready to start spending (and saving).

With Monzo you can even sort your money into spending/bills/savings categories to help you stick to a budget. There’s also the option to create ‘Bills pots’ where you pop upcoming bill amounts aside ready for when it’s due. This helps you know exactly what you’ve got left to spend for yourself!

When you spend on your card, you can categorise it as everything from ‘Charity’ to ‘Entertainment’, ‘Bills’ or ‘Self care’, so you can see just where your money’s going. My boyfriend and I find this SO helpful, as it lets you take ownership of your spending and see where you can afford to cut back.

These are some of the ways I’ve managed to save money recently – and today I use a mixture of pretty much all of them to make sure I’m being sensible with my money. What’s your favourite way of budgeting – have you found a method that helps you?