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Financial Planning

Lesson 14

13 min

Everyday tips to save money

Saving money is not just about discipline but also about using the right strategies. Whether it’s around the house, on groceries or through smart budgeting, small changes can make a big difference. Our guide presents 18 practical tips to help answer the question, "How can I save money each month?" We’ll also explain how to save effectively in everyday life, monitor your expenses and achieve your financial goals.

Get an overview of your income and expenses, use a household budget, and set clear savings goals to save money effectively
Avoid impulse purchases, plan your shopping carefully, and reduce costs through energy-saving measures or buying out of season
Regularly review contracts for electricity, insurance, and subscriptions to avoid unnecessary expenses and find better deals
At the start of the month, set aside a fixed amount in a savings account and use secure saving options like savings certificates or fixed deposits to build long-term reserves

Why is it worth saving money?

Saving money creates financial security and independence. A financial buffer helps cover unexpected expenses like repairs or medical costs and supports long-term goals such as travel, homeownership or retirement planning.

Starting to save early helps build financial stability, making it easier to face future challenges with confidence. It encourages more conscious spending, helps prioritise expenses, and ensures that financial goals like retirement or larger investments are achievable. In the long run, this leads to more freedom and greater planning certainty.

Before saving: getting an overview

Before you can actively save money, it’s essential to clearly understand your financial situation. Knowing your income, expenses and financial commitments helps you save effectively and avoid unnecessary costs. A structured personal financial plan forms the foundation for successful budgeting and helps you identify potential savings in your daily life.

Things to focus on before saving:

Track income
Note your monthly earnings from wages, side job, or other sources. This helps you understand exactly how much money is available.

Break down expenses
Divide your expenses into fixed and variable costs. Fixed costs include rent, insurance, and subscriptions, while variable costs cover groceries, leisure activities or clothing. A household budget helps document and control all expenses.

Identify unnecessary expenses
Review your spending habits to see if any areas can be adjusted. This might include impulse purchases, unused subscriptions or high-energy-consuming devices at home.

Set savings goals
Decide how much you want to save each month and for what purpose. Clear goals motivate and help you stay consistent.

Define priorities
Ensure essential expenses are covered before saving money. Balancing saving and maintaining your quality of life is key.

By gaining an overview, you not only identify savings opportunities but also lay the groundwork for a sustainable budget. This allows you to save money in everyday life more consciously and systematically.

Our 18 tips and tricks for saving money in everyday life

Saving money doesn’t have to be complicated. Often, small changes and mindful decisions can lead to significant long-term benefits. Whether it’s budgeting, shopping or household expenses, there are many ways to optimise spending and set money aside.

Here are 18 practical tips to help organise your finances and achieve your savings goals more easily.

1. The three-account model

The three-account model is a simple yet effective method to structure your finances and save money. Your income is distributed across three separate accounts: one for fixed costs, one for leisure and variable expenses and one for savings.

Account 1: Fixed costs – Covers regular expenses like rent, utilities, insurance and subscriptions
Account 2: Leisure and variable expenses – For flexible costs like groceries, clothing or leisure activities
Account 3: Savings – For reserves and savings goals, ideally with a fixed transfer at the start of the month

The three-account model provides clear financial oversight and helps you prioritise. It not only creates financial order but also simplifies monthly savings.

2. Employer savings schemes

Employer savings schemes are an easy way to save additional money, especially if your employer supports them. Your employer contributes a fixed amount each month into a savings plan, which may also be subsidised by the government.

Use employer contributions: check if your employer offers savings schemes and the level of support
Choose a suitable plan: options include bank savings plans, building society contracts or investment funds
Check for government incentives: depending on your income, you may benefit from bonuses like the employee savings allowance

These schemes allow you to build wealth step by step without making significant cuts to your monthly budget.

3. Use a household budget for planning

A household budget is a practical tool to manage finances and save money at home. It helps you track income and expenses clearly, identifying savings opportunities.

Record income and expenses: regularly document what you earn and where your money goes
Separate fixed and variable costs: this keeps track of essential and flexible expenses
Spot areas for improvement: it’s easier to identify and reduce unnecessary or recurring costs

Whether digital or on paper, a household budget ensures transparency and helps you plan your budget better to save money long-term.

4. Save at the start of the month

One of the most effective methods to save regularly is the "pay yourself first" principle. At the start of each month, transfer a fixed amount to your savings account before making other expenditures. This ensures you meet your savings goal without realising you’ve spent the money elsewhere.

Automating this process with a standing order makes it easier. When your salary arrives, the savings amount is automatically transferred to a separate account. This turns saving into a habit and reduces the risk of unintentional spending.

For example, if you save 10% of your income and earn £2,500 net monthly, you’d transfer £250 to your savings account at the start of the month. Over a year, this builds up £3,000 in reserves.

5. Seek financial advice

Professional financial advice can be helpful in gaining a better understanding of your finances. A financial advisor or debt counsellor can analyse your income and expenses, reduce fixed costs and set personalised savings goals.

Expert advice provides tailored money-saving tips and strategies to achieve financial stability in the long run.

6. Pay off debt

Reducing debt is a critical step towards financial independence and saving money effectively. High-interest debts from loans or overdrafts strain your budget and hinder building reserves.

Start by reviewing all debts and prioritising them by interest rate. High-interest debts, such as overdrafts or credit card balances, should be paid off first. Consider consolidating debt to benefit from lower rates.

Plan regular repayments in your monthly budget and set realistic goals to gradually reduce debt. As your liabilities decrease, you’ll free up more money to save or use for your goals.

7. Annual financial check-up

A yearly financial review helps maintain oversight of your finances and identify savings opportunities.

Analyse expenses: look for ways to reduce or eliminate costs, such as switching electricity, internet or insurance contracts
Review contracts and subscriptions: cancel unused or unnecessary memberships and subscriptions
Adjust savings goals: Ensure your goals align with your current circumstances and update them as needed

8. Save on groceries

Groceries are one of the largest variable expenses, but careful planning and mindful shopping can significantly reduce costs without sacrificing quality.

Create a shopping list and stick to it to avoid impulse purchases
Use offers and discount apps for cheaper purchases
Choose seasonal produce for freshness and affordability
Stock up on non-perishables during sales and avoid food waste
Cook meals at home, which is often cheaper and healthier than ready-made options

9. File a tax return

Filing a tax return can be financially rewarding, as many taxpayers receive refunds for overpaid taxes. Expenses like commuting, training, household services, or insurance premiums can often be claimed to reduce your tax liability.

Digital tax tools or professional advisors simplify the process. The effort is typically minimal and can result in additional income at the end of the year.

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10. Tips for shopping

Shopping can quickly become a source of unnecessary expenses, but a few simple tricks can help you save money effectively. Adopting a mindful approach to your shopping habits allows you to plan ahead and reduce impulse purchases.

Create a shopping list: plan what you need before heading to the supermarket and stick to your list
Don’t shop when hungry: hunger often leads to buying more than planned, especially unhealthy or expensive snacks
Compare prices: check the price differences between branded products and store brands, which are often cheaper but still of good quality
Take advantage of offers: plan your shopping around discounts and special offers without being tempted into unnecessary bulk buying
Buy in bulk sensibly: opt for larger packs only if you’ll use the quantity to avoid food waste

These tips help you stay in control while shopping, reducing expenses and freeing up more money for savings or household needs.

11. Household savings tips

There are plenty of opportunities to save money around the house by making small adjustments to your daily routine. These tips promote conscious use of resources without sacrificing comfort.

Save energy: turn off devices completely instead of leaving them on standby and use energy-saving bulbs or LED lighting
Identify energy guzzlers: regularly check high-energy-consuming appliances and consider replacing them with more efficient models to save costs over time
Reduce water use: shorten shower times, use water-saving showerheads, and turn off taps while brushing your teeth
Lower heating costs: heat only the rooms you use, keep temperatures moderate, and bleed radiators regularly to maximise efficiency
Make your own cleaning products: create cost-effective cleaners, like an all-purpose solution, from vinegar, baking soda or citric acid

12. Avoid impulse purchases

Impulse purchases are a major reason for unnecessary spending. These spur-of-the-moment decisions often happen in supermarkets or while online shopping. To avoid them, create a clear shopping list and stick to it.

For larger purchases, wait at least 24 hours before making a decision. This pause creates distance and prevents you from buying things you don’t truly need. By planning and questioning your purchases, you’ll save money in the long term and stay in control of your finances.

13. Limit exposure to advertising

Advertising can unconsciously influence spending habits, often leading to unnecessary purchases. By reducing your exposure to ads—whether in online shops, on social media, or streaming platforms—you can save money effectively.

Unsubscribe from newsletters: avoid marketing emails by unsubscribing
Disable personalised ads: adjust settings on apps and online services to reduce targeted advertising
Avoid paid ad-free subscriptions: instead of paying for ad-free services, focus on conscious consumption

Less exposure to advertising means fewer temptations, helping you focus on what you truly need and leaving more money for savings.

14. Adopt sustainable consumption

Sustainable shopping saves money while conserving resources and protecting the environment. Choosing durable, high-quality products avoids frequent replacements and reduces unnecessary expenses.

Consider if you genuinely need an item before buying or explore more sustainable alternatives
Opt for second-hand purchases, repair instead of replacing, or borrow tools and equipment you use infrequently

Sustainable consumption means thinking long term. Buying less but focusing on quality pays off over time, helping you reach your savings goals while being environmentally conscious.

15. Plan holidays early

Planning holidays well in advance can save a significant amount of money. Early bird discounts on flights, hotels and package holidays are usually cheaper than last-minute offers. Early planning also allows more time to compare prices and find the best deals.

Book months in advance and use comparison sites to find the best options
Travel off-peak: opt for times outside the high season or midweek trips to cut costs further
Explore alternatives: consider holiday rentals or hostels instead of hotels

Early planning avoids costly last-minute bookings and helps you stick to your budget while enjoying a stress-free holiday.

16. Save on transportation

You can cut travel costs by switching to more affordable alternatives. Using public transport, like buses, trains or carpooling, reduces fuel expenses, parking fees and wear on your car. For short distances, cycling or walking saves money and boosts health.

If a car is necessary, consider car-sharing to avoid the costs of owning a vehicle. Additionally, compare the prices of monthly or annual public transport tickets and avoid unnecessary trips. These steps help you stay mobile while saving money effectively.

17. Subscriptions and memberships

Subscriptions and memberships can become hidden expenses if underutilised. Reviewing them regularly helps identify what’s genuinely needed and where savings can be made.

Cancel unused subscriptions: check services like streaming platforms, gym memberships, or magazine subscriptions for usage
Use family or group plans: share costs for streaming services or other subscriptions with friends or family
Opt for flexible options: choose monthly subscriptions for infrequent use instead of long-term contracts

H3: 18. Review insurance policies

Insurance is essential, but reviewing your policies regularly can reveal opportunities to save money.

Cancel redundant or unnecessary policies: ensure you’re not paying for duplicate coverage or policies you no longer need
Compare rates: use comparison sites or seek advice from an independent broker to find cheaper policies with the same coverage
Adjust coverage: ensure your policies match your current needs and update them if necessary

What to avoid to reach your savings goals

To save money effectively and stay on track, avoid these common mistakes:

Living without a budget: without a financial plan or tracking income and expenses, saving becomes challenging
Not setting savings goals: lack of clear goals can demotivate and lead to spending savings impulsively
Accessing savings too often: establish rules for when to dip into your savings to avoid depleting your reserves
Setting unrealistic goals: overly ambitious savings targets can be discouraging and lead to giving up
Ignoring small expenses: even minor unnecessary purchases can add up and derail your progress

By avoiding these pitfalls, you can maintain steady progress and build strong financial habits.

Conclusion: How our tips help you save money

Saving money doesn’t mean sacrificing everything - it’s about making conscious decisions with your finances. Small, targeted changes in everyday life can reduce unnecessary expenses and create financial breathing room over time. From better budgeting and mindful consumption to optimising fixed costs, our tips show how to save step by step and achieve your financial goals.

The key lies in regular tracking, setting priorities, and defining realistic savings targets. With deliberate choices, you can build reserves, handle financial challenges more easily and gain the freedom to achieve long-term goals. Success comes from combining planning, consistency, and gradual adjustments that add up to significant savings over time.

Frequently asked questions about saving money

How can I save money monthly?

If you want to regularly save or invest a larger sum securely, options like savings certificates, fixed deposits or bank savings plans are ideal. These are low-risk and help you build wealth. Plus, annual interest earnings of up to £1,000 are tax-free - or up to £2,000 for married couples.

Another simple way to save monthly is by setting aside a fixed amount at the start of the month using the "pay yourself first" principle. Automate this process with a standing order to a separate savings account. Also, create a budget to monitor your fixed and variable expenses.

How can I save money despite inflation?

Even during inflation, you can save money with mindful habits and smart choices:

Shop off-season: buy seasonal items like winter coats in summer sales
Review mobile and utility plans: switch to cheaper tariffs that suit your actual needs
Save energy: use LED lights, adjust fridge temperatures slightly and keep heating moderate
Choose second-hand items: opt for pre-owned electronics, furniture or clothing to find quality at lower prices
Check insurance policies regularly: compare tariffs and switch providers for better deals

How can I quickly save a lot of money?

To save a significant amount quickly:

Cancel unused subscriptions
Sell unneeded items
Cut back on expensive outings like dining out or leisure activities
Set a clear savings goal and avoid non-essential purchases for a set period

How can I save money in everyday life?

Saving in daily life is about small, consistent habits that add up over time:

Plan shopping with a list and use discounts
Lower energy use with LEDs, turning off devices, and moderate heating
Walk or bike for short trips and use car-sharing where possible
Cook meals at home instead of buying pre-packaged options
Review and cancel unnecessary subscriptions and find cheaper tariffs
Buy second-hand and focus on durable, high-quality items