10 Smart Tips to Save money in 2022

How would you feel to know that 1 in 10 Brits (9%) don’t have any savings? It’s pretty frightening to imagine living without any backup. Do you know what’s even more terrifying? About 41% of Brits do not have enough savings to live through a month without income. Let it sink in and imagine how hard life would turn on anyone in such a situation. We’ve compiled these 10 smart tips to save money so that you never end up in such a problematic situation. 

1. Take Control of Your Finances & Budgeting 

Our best advice on saving money quickly is simple: learn how to create a budget. Once you’re in charge of your budget, you will have better control over your finances. But where to start? 

Before you can save money every month, you need to track your cash flow. You understand all your incoming and outgoing income, including debt repayments, monthly bills, and savings contributions. If this doesn’t sound like your strong suit, it’s a good idea to offload this to a financial planner who can use advanced financial planning tools to provide analysis that helps you to effectively manage your cashflow. 

To create a budget to start saving quickly: 

• Track all your finances for 30 days, including all your income and expenses. 
• Take the time and effort in comparing your monthly income with your monthly spending to see how much you can currently save or how much you spend too much each month. 
• Divide your costs into fixed and variable costs. Your fixed costs are costs that are usually difficult to adjust, such as rental and utility bills. Your variable costs include costs that are easier to manage, such as food, entertainment, and subscriptions. 
• Identify any variable costs you can start reducing to increase how much you can commit to your savings goals each month. 

• Evaluate your progress regularly and adjust when required. It might overwhelm some, but don’t worry, though. Many budget apps are available nowadays to help you stay on your budget. 

2. Break Your Debt Circle 

It may be a good idea to pay off any outstanding debts before you start saving. The longer you repay the debt, the bigger it gets. It’s because of the compounding interest rates (the price you pay to borrow money). If you delay paying off your debt, the accrued interest can wipe out all the money you can save. When the debt becomes unmanageable, some people consider filing bankruptcy as a last resort to get a fresh start.

To get rid of debt quickly, consider using a budgeting method, such as the 50/30/20 budget. While serving as a Harvard bankruptcy specialist, US Senator Elizabeth Warren introduced the world to the 50/30/20 rule. It offers a simplified approach to debt collection. It goes like this: 

• Dedicate 50% of your income to your needs, i.e., your fixed costs like rent, utilities, and taxes. 

• Spend 30% of your income on your wants, i.e., on your variable costs such as meals and subscription services. 
• Save 20% of your income. So, if you make €2,500 at the end of every month after taxes, you can save €500 a month. This approach enables you to pay off 6,000 euros of the debt in just one year. 

3. Organise and Automate Your Savings  

To save money quickly, separate the money you spend on your daily needs from the money you want to save. It means opening a special savings account. 

This way, you minimise the risk of immersing yourself in your savings to cover your daily expenses. Alternatively, it encourages you to stick to your daily budget and protect your savings from temptation! 

You may also consider automating your monthly savings if you earn a fixed monthly income. You create an automatic transfer from your daily spending account to your savings account every month. This kind of automation in your savings helps you reduce your chances of using these funds to cover everyday expenses. 

4. Manage Your Accommodation and Rent 

Lowering the rent is one of the fastest ways to save a significant amount monthly. For instance, if you currently live alone, one of the easiest ways to accomplish this is to choose to live with a roommate. It immediately halves your rent, and if you decide to move in with two extra roommates, you’ll pay about a third of what you pay now. 

So if you currently pay €1,300 per month for a three-bedroom apartment and get another roommate, you will save €650 per month. If you decide to stay with two roommates, you will save around €870 per month. That is almost 10,500 euros per year! 

If you already live in a shared apartment, consider swapping it for a smaller room. Rental rates are usually calculated based on the size of the rented space. So, you can save each month significantly… 

5. Manage Your Utility Bills 

Another excellent tip for immediate savings is to reduce your electricity bill. Your electricity and gas bills contribute significantly to your monthly fixed costs. So, if you can reduce them, you can put a lot of extra money in your pocket. The procedure is as follows: 

Change energy suppliers. By having the lowest prices on the market, you can save hundreds of euros a month in many cases. 

Replace your classic light bulbs with LED bulbs. LED bulbs are 75-85% more energy-efficient than standard bulbs and last 15-25 times longer. 

Invest in a smart thermostat. This way, you can intelligently control your central heating and potentially save a lot of money. 

Close all air leaks. Air vents around windows and doors can increase your electricity bill because your heater has to work longer to keep the room warm. Instead, close these holes with pressure-sensitive seals to prevent hot air from escaping. 

6. Set Up a Side Hustle 

If you’re looking to increase your monthly savings seriously, setting up a side hustle is worth considering. It could be a few night shifts at a bar or restaurant after office work, getting a few free gigs, or even becoming a virtual assistant. 

It can be incredibly motivating to deposit all the money you’ve earned directly into your savings account. However, be careful about burning out. In the longer run, your mental health is more important than trying to achieve a savings goal!! 

7. Get Rid of Any Unused Subscriptions 

Subscriptions are a money-making dream for many businesses. Once a user has subscribed to their service, they’re somehow very reluctant to unsubscribe – even though they rarely use it. 

You may say that it’s mainly due to an inappropriate understanding of unused costs. When you use a subscription service, the misconception of non-refundable fees means it’s hard to cancel a seldom-used subscription because you’ve already paid so much money.  

Thus, terminating the subscription would mean accepting that all the money spent on it up to that point had been wasted. However, by postponing the check-out, there seems to be a chance the service can eventually be used. 

However, few of us have ever taken full advantage of our subscription services. It is, therefore, cheaper to cancel all unused subscriptions immediately instead of waiting a while before you can use them hypothetically. 

8. Be DIY Friendly 

Another good way to save significantly is to learn how to fix something that breaks down. With YouTube and the internet, you can now learn how to fix almost everything online. From leaking pipes to zippers on jeans, it’s always more cost-effective to fix those things yourself than to pay someone else to do it or replace them entirely. 

9. Splurge ………. Wisely 

Succumbing to instant gratification is one of the biggest opponents of saving money fast. Give yourself at least three to four days to think before making significant expenses. It will prevent the impulsive part of your brain – the part that wants to get serotonin quickly from a new great purchase – from taking control. 

Consider larger purchases after 30 days if you want to test yourself truly. It’s a surefire way to control your impulsive buying. It also gives you plenty of time to find out if there is a better deal elsewhere. 

10. Make Money off Your Unused Items 

If you’re looking to start saving money quickly for the holidays, it can pay off to overhaul your unused property and sell it on an online marketplace like eBay or Nextdoor. This will help lighten the load on your pocket, but it could also mean you earn quite a bit of extra money that you can invest in your holiday savings goal!! 

Conclusion 

Yes, saving money is not a child’s play, and it takes a lot more than mere planning, but you have to start somewhere. And the tips to save money shred in this blog give you some simple and effective ways of commencing on your money-saving journey.  

If you find these helpful, don’t feel hesitant in sharing these with your loved ones.