Knowing how to save money is one of the most important lessons to learn in life – and one they don’t usually teach in school. Yet implementing a money-saving action plan will hopefully allow you freedom, peace of mind and, in some cases, the realisation of your goals.
You may be thinking about:
- How to save money as a student
- How to save money for retirement
- How to save money for a house
- How to save money on a wedding
- How to save money for kids
- How to save money for a car
- How to save money on groceries
- How to save money as a teenager (that’s right; you’re never too young to start)
Whether you have a specific goal in mind, or if you’re simply trying to save for a rainy day, learning how to save more money is at the top of the priority list for many households.
So, what are the easiest ways to save money? Read on for some useful money saving tips...
1. Know the rules
How you choose to save money is dependent on a variety of factors, from your household income to the assets you currently have to your name, to the stability of your work situation and the size of your monthly overheads. Different methods of saving work for different people, but here are a couple of rules that can frame your mindset and develop habits that save money:
The 30-Day Rule:
What is the 30-day rule?
Simply put, if you feel the itch to buy something, wait 30 days. Take the money that you were about to spend on said item or activity and set it aside. Don’t worry! It’s there. All you have to do is wait for it.
By forcing you to evaluate your purchasing motivation, many people find the 30-day rule to be one of the best ways to save money. It prevents impulse purchasing, and allows you the psychological space to really consider what you do with your money. Of course, this method only applies to non-essential items.
The 50/30/20 Budget Rule:
What is the 50/30/20 budget rule?
The 50/30/20 budget rule is about ensuring that you have enough money for essentials while not negating the need for life’s pleasures. This is how it goes:
- 50% of your income goes towards necessities. These are the things that you need for your day-to-day survival. Think rent, groceries, electricity, water, etc.
- 30% of your income goes towards your “wants”. This might be dining out, a weekend away, those belly dancing classes, or that band you’ve wanted to see since you were a teenager.
20% of your income goes towards long-term savings or repayment of debt. This can include things like your retirement fund, your kids’ education, or paying off an overdraft.
If you want to learn more read our comprehensive article about the 50/30/20 rule.
2. Use a monthly Budget Planner
That old adage of “those who fail to plan, plan to fail” is particularly true when it comes to saving money. Designing a budget – and putting it into practice – is essential for setting aside funds for the future. But this is easier said than done, and it can be a challenge to keep track of a budget.
With a Revolut account, you get access to our Budget Planner. You can set your own monthly budget and we’ll calculate a daily spending limit for you to stick to in order to meet your goals. And it’s real-time, too. When you pay with your Revolut card, your balance is updated immediately and you can get instant spending notifications.
With our handy Analytics tab, we categorise your payments into areas like shopping and groceries, updating how much you spend in each area – down to the percent.
3. Make your money work for you
It’s one thing to put money aside, and another to make the best of it once it is. A safe and secure way to make the most of it is to use Revolut’s Savings Vault. We work hard to find the best savings rates that put your money to work, without you having to lift a finger.
Whether you round up spare change or make a one-off deposit, you'll earn up to *1.35% (AER) annual interest. You can deposit and withdraw when you need to, and your money is deposited with a trusted partner bank and is protected by the Financial Services Compensation Scheme where you are eligible.
*Important notes about Revolut Savings Vault:
Only limited deposits will be accepted at the competitive 1.35% AER interest rate. After the limit is reached, any new deposits will receive a lesser rate.
- At the time of writing (March 2020), Savings Vaults are currently only available in GBP, to customers whose sole tax residency is the UK. New currencies and countries are coming soon.
- Interest accrues daily but is only paid on business days. Interest earned over weekends and bank holidays will be paid the following business day. Interest rates may increase or decrease quickly, but we'll always notify you.
- At the time of writing (March 2020), Savings Vault is only available on the Revolut Premium and Metal accounts.
4. Stash spare cash
Save the pennies, and the pounds will take care of themselves. You can also round up spare change with Revolut, by making use of Vaults. Every time you purchase something with your Revolut card, the total will be rounded up to the nearest whole number. These extra pennies go straight into your Revolut Vault, and you can also top up your Vault with one-off or recurring transfers. It all adds up over time!
5. Don’t take out costly credit loans if your spending increases
If you’re in between pay periods and you’re hit with a bill you didn’t anticipate – your car’s broken down, some emergency dental work, an energy price hike – it’s easy to turn to credit for a quick fix.
This can also happen when you know you have a period of large outgoings coming up, and you can start to feel less in control of your money. But what if you could set a debit cycle that matched your expenses with your income without having lean on credit, or breaking into your savings?
That’s where On-Demand Pay by Revolut comes in. Your wages are tracked across the month so you can see exactly how much you’ve earned in real-time and, for a small fee, you can withdraw up to 50% of it whenever you need to. To set up On-Demand Pay, you’ll need to get your employer know so they can set it up via Revolut Business. It’s super simple, and free to integrate. Win-win!
How to save money: Key takeaways...
Saving money always demands self-discipline, and it’s never easy – especially if you’re located somewhere with a high cost of living. However, with a positive mindset, some rules, a budget, and the ability to set money aside automatically, it is possible for your savings to accumulate. Don’t give up!
We hope this blog post has given you some useful tips on how to save money. Check out the links below for articles about similar topics:
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