Struggling after a blowout month? Here are some essential money saving tips to help get your budget back on track.
If you feel your budget has spiralled out of control, maybe after a very expensive month or several months of overspending, there are lots of positive actions you can take right now that will help.
I am just about at the end of what has been an expensive summer – I had a girls mini break in Porto, family holiday, my car had various bills that needed renewing and we had back to school costs to cover like uniform and kit.
It’s been expensive, but my budget can handle that because I have a plan.
Here are the money saving tips I use to keep my budget on track all year long and get it back on track when i have overspent.
Embark on a no spend challenge
Let’s start with some practical ways to cut back on spending. A no spend challenge is a fantastic way to cut back on spending on wants and give you a chance to build up your reserves again.
It could be a no spend day, week or month.
Doing this properly means: No meals out, no new clothes, no trips out, no takeaways
The month-long challenge will obviously have the most impact, but even a weekend where you say you’ll only go to free places, walk to entertain yourselves and make use of the books and streaming services you have at home can save you hundreds depending on your usual leisure spending habits.
It’s also a decent reset for your spending mindset, as it causes you to evaluate whether stuff you have been buying really does matter to you.
If you didn’t miss it that much, maybe it’s not something you need to spend any money on or as much money on in the future.
Not sure about doing a full no-spend challenge? Try a low spend challenge.
Declutter and sell some stuff
I’ve recently made over £70 on Vinted and Facebook Marketplace from selling unwanted toys and clothes.
Take some time to look through your stuff and consider whether any of it could be cleared out. You’re potentially sitting on hundreds of pounds.
When selling online do some research to price the items right, take really great photos and if you get offers within hours do not accept them. Lots of offers usually means the item is in demand and you can hold out for your asking price. If you get no offers for over a week then consider dropping the price a little.
Cut food waste and meal plan
After your mortgage or rent I suspect food is your next biggest expense.
Finding ways to cut back here is a great way to shave hundreds off your monthly expenses.
Start off by making a weekly meal plan for how you will use up the food that you purchase.
Challenge yourself to use up food you already have in your fridge, freezer and cupboards.
Buy cheaper cuts of meat or buy smaller portions of meat and bulk it out with cheaper veggies like carrots or beans and pulses.
Master some great takeaway recipes to do at home so you get the food you love at a much cheaper price.
Look for ways to get cheaper food by shopping for yellow sticker discounted food and offers, but only offers on food you will genuinely eat up and that isn’t surplus to your requirements.
Use coupons, don’t let coupons use you
Vouchers and money off codes are not being handed out left right and centre by brands out of the kindness of their heart. They are marketing tools.
Supermarkets give you specific offers and vouchers for money off food in order to get you to buy that food. Brands give you free delivery or 20% off in order to get you spending in the first place.
But it is only a bargain if you were going to buy it anyway.
So use a voucher if it is genuinely giving you money off of something that you were going to buy anyway. Never allow it to sell something to you that do not really need.
Have a small gift stash
I like to have a little stash of gifts set aside for when the kids get invited to parties or that I think loved ones will like. I buy these as and when I see them on offer in sales or as a 2 for 1 deal to save me money over the course of the year.
It’s a similar story with generic birthday cards, which can cost as much as £4 each or if you buy in bulk you can get them for as little as £1 each.
Where we have had a duplicate gift I will put that into my small gift stash to regift it on to someone else.
Always use cashback
I use cash back apps and sites whenever I shop. Sometimes you have a store that isn’t partnered with any cash back apps, but generally speaking most of the big ones are.
I use JamDoughnut when supermarket shopping. I just buy an online gift card for Sainsbury’s or Tesco or wherever I am shopping, then I use that at the checkout to pay for my shop. You can get as much as 4 or 5% cash back which adds up over time.
I also use Airtime Rewards which gives your cash back in the form of money off your phone bill. Aldi recently came back to the app, so if you shop there now is the time to get signed up to Airtime Rewards.
Review your spending
Take some time to review where your money has been going. Print off your bank statement and go over it line by line for the last couple of months.
It can be useful to add up your spending by category and see where the bulk of your spending on non-essentials is going.
This can help you re-evaluate your spending habits and give you the motivation to make some changes.
Cut back on how much you visit certain websites that tempt you, or consider whether you are getting best value for money from the things you are spending on. If you are signed up to certain subscriptions then examine how much you are using them and whether it would be better to pause them for the time being until your budget is back on track.
Plan by the year, not just the month ahead
Your spending is not flat for the entire year. If you looked at your total spending each month and plotted it out on a graph over the year, then there would be peaks and troughs.
If you are anything like me then your biggest expenditure times are probably summer and Christmas. If you have kids then family birthdays may crop up here and there causing you added expense on things like gifts and parties.
While it’s important to know your monthly regular expenses, you also need to take into account those expenses that don’t happen every month, but do come around every year or every few years, like say replacing your car. Every year you will have to afford Christmas, if you’re hosting it’s going to cost you even more. We easily spend £300 just on food and drink for the family on Christmas Day.
Don’t allow one month to take you by surprise and wipe you out for the rest of the year.
Take some time to write out all of the expenses you know are coming by the month, year and beyond.
With this information you can figure out what you should be setting aside every month so you don’t have to cover big spikes in expenditure with just one month’s worth of income.
This pot of money that covers known expenses is also known as a sinking fund and it great for covering things like your car insurance renewal and Christmas and birthday expenses.
I have mine in an easy access saving account and I move it around to get the best deal on interest rates so it is making some money for me every month.
Manage debt
If you have overspent to the point where you have taken on debt then make a plan for how that will be paid off.
It’s usually the case that high interest debt will cost you more than you can earn in interest on your savings, so examine your situation and decide whether it will be best for you to focus on paying off the debt, rather than saving money right now.
It can sometimes help to transfer debt to a 0% credit card, so you are not paying extra debt on top of your debt.
Whatever the situation with your debt, try not to hide from it. The head in the sand approach to finances is a totally natural one to veer towards when you feel like you’ve lost control and the situation is making you anxious. But tackle it head on, and make a plan to get out of it.
Problems come up in life all of the time, we’re rarely without something troubling our minds. The trick is to reframe how you deal with those. Face them and deal with them, while also trying to focus in on the good things in your life so that you keep a positive mindset.
Start an emergency fund
If your overspending has been in part down to unexpected costs then now is a good time to start an emergency fund. This can help you to cover unexpected costs in the future.
Experts recommend an emergency fund has enough to cover you for 3 to 6 months of your essential expenses in case of a sudden change of circumstances, like job loss, or if you have an emergency bill to cover, say a major house repair.
You don’t have to build it all at once, but try to set aside a percentage of your income every month towards this. If you save £100 a month of a year in an account with 5% interest then you’ll have over £1233 by the end of the year. It’s not huge but it’s a start.
Think of ways you could boost that monthly amount, for example try doing online surveys or even better look for freelance work online in an area you have skills in. Can you help someone out with virtual assistant work?
Try reverse budgeting
You can increase your chances of success at building your emergency fund by paying yourself first.
With reverse budgeting you are focused on saving first, and then you use what is left for expenses and spending.
To create a reverse budget you first of all need to know these key numbers – your income, your fixed expenses and your typical spending on extras like meals out.
Next decide what your savings goal is, and be realistic here about what you can afford based on those numbers, but also be ambitious. One of the reasons for examining your spending habits is to help you see whether those things your money is going on are more important than what you want your savings goal to achieve for you – is it an emergency fund for a safety net or money to buy a new home.
This gives you the motivation to cut back on your spending to prioritise your saving.
It can help to have a specific savings goal in mind, say you want to save £10k this year, then you know you need to set aside £830 a month. If that’s too much, then halving that amount would mean you save £5k in a year, which is still a decent amount of money.
The idea is that it helps you to prioritise savings, rather than leaving them as an afterthought at the end of the month and saving only a tiny proportion of your income or none at all.
Organise your life
A couple of years ago I really dropped the ball on my life. I was busy with work stuff and I hadn’t taken time to review what was coming up.
Then out of nowhere I realised I had to get a costume for one of my kids for school, and a birthday gift for the weekend for one of their friends.
In these situations the temptation is just to throw money at the problem to solve it. You buy the easiest thing, which often is not the best value thing. So I ended up with a costume that my daughter didn’t really like and she will never wear again and I spent more than I usually would on the birthday gift because I had to get it in a hurry and didn’t have time to look for something that was both nice and fitted in with what I would usually spend.
When you make a plan in advance you can shop around, find the best value item to fulfil your needs and you do not shop in a panic, buying stuff without really thinking it through or being able to evaluate all of the options.
It’s a similar story when it comes to the state of your home. A chaotic and messy home will inevitably lead you to spending more, because you don’t know what you already have. That goes for food, clothes and toys. If your kids cannot easily access the stuff they own then they won’t make the most out of playing with the things they have. If you don’t see all the clothes and makeup you already have, then you’ll buy more on top of it without realising there are perfectly viable options in your home already.
Organise your diary and your home, and you will spend less money.
