Manage Your Bills (and Start Saving)

This section includes tips on managing your credit so that you can stretch your salary, as well as tips on how you can start saving more money each month.

Click here for a budget sample.

It Starts With a Budget

Good money management starts with having a budget – after all, if you don’t know how much you have to spend on everything from rent to going to the movies, what’s stopping you from spending so much more? Whether you use an online app or simply write it down on a piece of paper, make sure that your budget is detailed and includes not only your monthly bills, but also your leisure activities.

Stick to Your Monthly Budget

1. Pay with your bank card so you can track your spending. If you’re paying with cash, always get a receipt.

2. Compare your actual spending to the budget you’ve drawn up – this will help you to make adjustments to ensure your budget is realistic.

3. Save at the start of the month, not at the end.

4. Try to put away between 15% to 25% of your salary into savings.

Top Tip:

If you’re still paying off debt, but you want to save, check the interest rate on the debt you have and compare it to the interest you’re getting on your savings. If you’re paying off a credit card, for example, that charges you 20% interest, and you’re only getting 2% interest from your savings, which means you’re actually losing 18% if you are saving that money, rather than paying off the debt first.

 

How to Build a Healthy Savings Account

1. Set a Savings Goal

Just like everything else in life, if you want to save, you’ll need to set yourself some goals. Start off small and work your way up. If you’re saving for something specific and you’re able to put an amount on that, you’ll find it easier to motivate yourself to put the money away every month.

2. Save First

Set up a debit order transferring money into your savings account so that you don’t even see the money reach your bank account before it goes into your savings.

3. Spend Now, Save Later

Some purchases can actually work to save you money further line the line, like energy-efficient appliances. Find out where you can make small changes that will save you money every month – you’ll be surprised at how quickly these small bits add up.

4. Pack a Lunch

There are certain habits that can end up saving you a small fortune in the long run, like packing your own lunch (yes, that includes taking your coffee to work in a thermos flask, rather than stopping off to buy it at a café).

5. Keep Your Savings and Current Accounts Separate

Don’t bank and save with the same account – open up a savings account that is separate from the account you use every day. This will stop you from eating into your savings during the month. It also allows you to choose a savings account that will offer you more perks, such as higher interest. If you find it really difficult not to draw from your savings account, put it in a Notice Deposit or Call account so that you need to give the bank a certain amount of notice before you can withdraw the money.

 Money Saving Tips That Will Surprise You!

People with lots of money often have one thing in common – they practice sound financial habits. These don’t just revolve around saving every month or making good investments – it’s often those small, day-to-day choices that mean the difference between a pay cheque that just won’t reach the end of the month and a healthy savings account.

1. Check your receipts

Make sure you check your receipts when you leave a shop. You do this for two reasons:

  1. To ensure you’ve paid what you should pay, particularly for items bought on a sale. Often, the sale price and the price you get at the till point will differ due to human error, resulting in you paying full price, rather than the sale price.
  2. Make sure you leave with the correct change. It’s human nature to make mistakes, and when shop employees are under pressure, the margin for error widens.

2. Buy in Cash, Rather than on Credit

Instead of purchasing something you want on credit, rather wait, save, and then buy it in cash. This will not only save you from spending on a whim, but it also saves you from having to pay interest.

3. Do Your Homework When Buying on Credit

If you must buy on credit, make sure you shop smartly. Shop around and compare interest rates. Use the internet to compare pricing without ever having to leave home – this can end up allowing you to search through a wider range of products, saving you a lot more money.

Top Tip: Request shops to call you back when you’re shopping around so that you don’t have to pay for airtime.

4. Save, Even a Little

Every little bit counts, so when it comes to saving, don’t worry if you can’t put a whole lot of money away each month – just saving a little can start to build your pot over a period of time.

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LifeGap teaches you what you need to know to be prepared for the “Real World”. The book is divided into three sections; Personal, Financial and Governmental.