New Year’s Resolutions: How to Save Money and Make It Stick

New Year’s Resolutions: How to Save Money and Make It Stick

Every year, millions of people set the same New Year’s resolution – to improve their financial situation and develop better money-saving habits. But why do so many fall short of their goals? Is there a way to actually make this year the one where you succeed? The answer lies in a solid, well-thought-out plan. Saving money might sound straightforward, but sticking to it requires strategy, discipline, and a clear understanding of why you're doing it in the first place.

Set Clear Financial Goals
The first step to successful saving is knowing exactly what you’re saving for. Imagine trying to hit a target with a bow and arrow. How can you succeed if you don’t even know where the target is? Whether you’re aiming to save £1,000 for a holiday or want to put away £200 every month, your goal needs to be specific and measurable. This way, you can easily track your progress and adjust if necessary. Setting a goal that excites you makes it much easier to stay on track.

Break Down the Timeframe

Once you have a goal, break it down into manageable chunks. Suppose you want to save £3,000 for a summer holiday. You’ve got six months to reach that target – that’s £500 per month or around £125 a week. Having a weekly or monthly target makes it less daunting and helps you stay focused. Plus, it’s much easier to find small areas to cut back on when you have a clear, bite-sized goal in mind.

Analyse Your Spending Habits

Take a deep dive into your regular and occasional expenses. Write down your fixed costs – rent, bills, subscriptions – and estimate how much you spend on food each month. Don’t forget to account for the spontaneous costs too, like birthdays, family events, and occasional splurges. By understanding exactly where your money goes, you’ll get a better idea of how much you can realistically save. This step helps you create a budget that works for you, without feeling like you’re depriving yourself.
If you’ve not been tracking your spending, you can easily get a sense of your expenses by looking at your past bank statements. Look for patterns, and try rounding up the figures to get a clearer view of your average costs.

Create a Realistic Budget

When it comes to saving money, the 50/30/20 rule is a popular approach: 50% of your income goes to necessities (like bills and food), 30% to non-essentials (like entertainment and dining out), and 20% to savings. However, this might not work for everyone, especially if your cost of living is high. In such cases, you might want to adjust it to something like 75% for essentials, 15% for fun, and 5% for savings.
This doesn’t mean you won’t save; it just means you’re being realistic. The key to success is consistency. It’s better to save a little each month than to try and cut out everything that brings you joy, only to burn out after a few weeks.

Track Your Progress Regularly

The best way to stay motivated is by checking your progress frequently. Whether it's weekly or monthly, seeing how far you’ve come can be a huge boost. If you're doing well, maybe you can afford to save a little more. If things aren’t going as planned, it’s a chance to adjust and tweak your approach. Consistent monitoring keeps you accountable and helps you stay on course.

Cut Back Where You Can

Saving money isn’t about living like a monk. It’s about finding smart, sustainable ways to cut back on unnecessary expenses. Here are a few areas where many people can save:

• Subscriptions: Go through all your subscriptions (Netflix, gym memberships, magazine deliveries, etc.) and cancel anything you’re not using regularly.
• Phone and internet contracts: With so many providers offering better deals, it’s worth shopping around before your contract expires. Don’t be afraid to negotiate with your current provider – they’d rather offer you a discount than lose you to a competitor.
• Fuel: If you drive, look at loyalty programmes offered by your local petrol stations. You could earn points or even discounts on future fuel purchases.
• Energy bills: Small habits like switching off lights when you leave a room, reducing shower time, or using energy-efficient appliances can add up over time.
• Eating out: Dining out can be expensive, so consider cooking at home more often. If you’re short on time, meal delivery services with discounts can help save money without sacrificing convenience.
• Groceries: Plan your meals ahead of time, buy in bulk, and look out for offers. You can save a lot by simply being strategic with your grocery shopping.

Stay Motivated

Let’s face it – sticking to a savings plan can be tough. However, by regularly checking in on your progress and adjusting your budget where necessary, you can keep your goal in sight. Don’t be discouraged if things don’t go perfectly at first. Remember, it’s not about being perfect; it’s about being consistent. And with every little success, you’ll gain the momentum you need to keep going.

Use Technology to Your Advantage

There are plenty of apps and tools designed to help you stay on top of your savings. Many banking apps allow you to set savings goals, track your spending, and even round up your purchases to put the spare change into a savings account. This makes it easier than ever to see where you’re succeeding and where you might need to adjust.

In the end, the key to making your New Year’s resolution to save money stick is all about creating a plan you can actually stick to. A little bit of preparation, regular checking, and a realistic approach can make all the difference. So why not start today? Every small step you take brings you closer to your goal – and who knows, by the end of the year, you might just be surprised by how much you’ve managed to save.