Written by: Sally Conway
Head of Consumer Communications
10th November 2022
Many of us want to know how to budget and save money.
Understanding our spending habits — and recognising how we can change these — can give us more control over our finances. It’s also the first step to reaching savings goals. In this guide, we've rounded up some helpful tips for sticking to a budget and saving money.
There are some great budgeting apps available to download on smartphones which can give you a real grasp on how much money you’re spending — and what you’re spending it on.
These apps can help you plan out your monthly expenses. Some popular free options on iOS and Android include Money Dashboard, Bean and Emma. Some of these budgeting apps can link multiple bank accounts. This enables you to track all your spending in one place.
Once you understand what you spend money on, you can use this to inform your budget. And once you’ve worked out your budget breakdown, you can put money aside for set purposes using your online banking. For example, you might want to put some money straight into a savings account. Or you may have a current account for your disposable income. You can move money around in whatever way works for you — all from the palm of your hand.
Carrying out your banking online can also be useful when tracking your spending.
You can easily check your bank balance and your transactions. There’s no need to wait for a bank statement in the post to see the money you have going out or coming in.
Many online bank accounts are constantly adding features that can help with budgeting. Take advantage of these and see what tools work for you. For example, some banks automatically categorise your purchases so you can see a breakdown of what you spend your money on without having to build your own spreadsheet. Others will let you set up virtual pots so you can set money aside for certain purposes without needing multiple accounts.
Using online banking also helps keep you in control when your bank’s branch is shut or you’re unable to get there. Having online banking means you can access your finances 24/7.
One of the most common budgeting tips is meal planning. It may seem basic, but food is something so many of us overspend on.
Planning your meals for the week ahead is a great way of managing your money and staying within your food budget. On average, a British family wastes a whopping £810 worth of food each year (source). Meal planning can help you reduce this.
Simply writing down what you will eat and when can help you understand the food you already have. This can prevent excessive — and expensive — top-up shops.
Staying aware of the food in your kitchen will also help you reduce food waste. In 2021, the UK generated over 9.5 million tons of food waste. According to Materials Recovery, 70% of this waste is coming from households so we can all make a difference. Meal planning prevents you from accidentally letting the food you bought go out of date and into the bin. So, you’re not only saving money, but you’re helping to save the planet too.
Not a cook? Don’t worry. Meal planning is still useful when eating pre-prepared food or even eating out. Although cooking from scratch — particularly in batches — can help you maximise your budget, it’s important to be realistic with your cooking abilities and time. If you can afford to treat yourself to a takeaway once in a while, factor this into your budget and meal plan so that you don’t buy more food than you will eat.
Online shopping has the obvious benefit of being able to be done from your home or where ever you want, at a time that suits you.
But another benefit that people don’t often think about is how online shopping can help you stick to a tight budget.
You can browse the website for the cheapest option at your own pace. And you can remove items from your basket if you notice the cost is getting too high. You can even compare costs between different supermarkets. To find out which supermarkets have the best deals on your favourite items, visit LatestDeals.co.uk’s food and drink price checker. You’ll need to consider delivery or collection costs in your budget but, depending on where you live, home delivery may be more cost-efficient than spending money on fuel.
Although online shopping can be done anywhere and at any time, it’s a good idea to do it on a full stomach. This will help avoid you buying unnecessary extras.
If you’re concerned about spending too much money, you may want to only spend from a current account and avoid making purchases on your credit cards.
Of course, there are reasons why you may want to use a credit card, but when you’re trying to save money, you need to consider anything you place on a credit card as within your budget.
If this is a concern, you could leave your credit cards at home to avoid temptation when out shopping. You could even place it somewhere out of reach at home and remove the card from any online shopping accounts to remind you to use it with caution when buying online.
Check out our other articles for more information on managing your money.
Read our latest blogs and guides for more helpful tips for managing your finances