5 Money Saving Tips for 2022

The start of a New Year is always a challenging time for most of us financially. Your pocket feels drained from the Christmas period and then there are all the extremely tempting January sales to contend with. 

So, how can you make sure that you manage your money better in 2022? We’ve provided some tips to help you out.

Plan a budget

Working out a budget and sticking to it is a good place to start. Write down your typical monthly income or think about downloading a budgeting app. Many financial apps allow you to add several accounts from different banks or building societies, so that you can see the bigger picture.

If you prefer writing things down, you could try the 50/30/20 rule to managing your money. The notion behind this strategy is that half of your income should be spent on essentials, such as food and utensils, 30% on leisure, such as hobbies or material goods, and 20% should be put into savings. 

Consider an ISA

An individual savings account – or ISA – is a very effective way to save money. But what is an ISA? An ISA is an investment that allows you to earn interest on your savings without having to pay tax on them.  

There are four types of ISA that you can use in the UK which you can bank your money into each tax year. These are: cash ISAs, stocks and shares ISAs, innovative finance ISAs, and lifetime ISAs. 

You can learn more about what’s an ISA at Pinnacle Wealth, which can also help you choose the right ISA for you.

Set a spending limit

While credit cards are certainly a convenient alternative to paying with cash, they do carry the risk of overspending. Before you know it, you’re struggling to keep up with monthly payments and your credit score has plummeted. 

If you’re prone to impulse buying, then it’s important that you set yourself a credit limit. Many banks and credit card companies offer the option to set a maximum monthly spending amount on their cards, which can help you avoid overspending.  

The 30-day rule

A simple, but effective strategy to save money is the 30-day rule. Particularly helpful if you’re prone to impulse purchases, the 30-day rule, dictates that if you see an item that you want, aim to wait 30 days before buying it. Don’t panic yourself into thinking that you might miss out – many ‘limited time only’ offers are often just a sales tactic. 

The notion is that you should only purchase the item if you find that you still want it after 30 days. Subsequently, if you find that after 30 days, you’ve forgotten about the item or realised that you don’t particularly need it, then you will have saved money. 

Cancel unessential direct debits

While it’s wise to rely on direct debits for paying essential bills to maintain a healthy credit rating, you should have a closer look at what you’re paying and decide what’s necessary. Do you need that premium streaming service, or can you downgrade? When was the last time you used your gym membership? 

Unnecessary direct debits can haemorrhage money over time, so it’s worth reviewing your monthly payments regularly. Make a rule that anything you haven’t touched for three months is cancelled. 

Conclusion 

There are lots of techniques to saving your money. Hopefully with our advice, you’re on track to a better financial future. 

*This is a collaborative post.