The summer months, like Christmas, can often be a time of year when household expenses suddenly shoot up.
While the pandemic may mean few are going on expensive overseas holidays this year, there will still be costs to consider – such as staycations, entertaining the kids, catch-ups, barbecues, and perhaps new summer outfits.
But, what if your budget is tight, or you’re concerned about having to fork out extra cash? To help ease the stress on finances, here are some tips from Alun Williams, commercial director of savings at Shawbrook Bank…
1. Be realistic and build some leeway into your budget
Creating a reasonable budget for yourself is one of the most effective ways to build up savings over time. The key with budgeting is understanding what your habits are and how you spend.
You might find that trying to cut out social activity or buying anything new is impossible to stick to, so make sure you set yourself a budget that you know you won’t be tempted to stray from.
And if needed, give yourself a ‘leeway budget’ which will allow you to spend a bit more than you’d ideally like. This way, if something unmissable comes up, you won’t feel too guilty about enjoying it.
— StepChange (@StepChange) June 19, 2021
You’ll find over time how fruitful a budget can be in growing your existing savings. And it’s especially important over the summer when, if they’re lucky, people often have more occasions planned to be able to enjoy the sunshine.
2. Pay yourself first
Understandably, many of us go straight to paying bills when we receive a payslip, and then spend the rest without too much thought. If you find that you have disposable income burning a hole in your pocket, then try prioritising your own cash each month when you’re paid.
If you can, you could consider starting with the ’80/20 rule’ – paying 20 per cent of your earnings straight into a savings product. Over time, you might find that you can increase this amount, paying 25 per cent or even 30 per cent into your savings.
Remember that the more you manage to save into an account, the more you’ll earn on it.
3. Avoid auto renewals
Many of us think that staying loyal to providers saves money in the long run – in fact, it can be the complete opposite. We often get sucked in by introductory offers, only to be disappointed further down the line.
According to GoCompare, nearly 6.7 million drivers allowed their car insurance to auto-renew in 2020 in the UK. But by using price comparison websites, people can potentially save significant amounts.
It’s also worth shopping around on household bills generally. There are many tools to help you save, without wasting your time. You can also use free tools to automatically switch to a cheaper deal.
4. Review your subscriptions
Lockdown left many of us with spare cash and time on our hands, resulting in a host of new subscriptions to keep us occupied. But now could be a good time to review what you’re signed up for, and cancel anything you don’t need.
There may also be habits you have picked up in lockdown that you can continue with. For example, you might find you don’t need that gym membership while the sun is out and you can go jogging outdoors instead.
5. Use apps and online tools to your advantage
There are hundreds of apps that could help you save a little bit here and there. Some can round up your payments to the nearest euro, putting any savings into a separate account. Once you have amassed some savings, you can then look at investing them wisely, so your money is being used to its optimum efficiency.
There are also extensions you can add to your browser that will automatically search for vouchers and discount codes for the website you’re on, saving you further cents.
Beyond using these useful tools, make sure you put extra cash into an account when you can, and watch your savings grow.