A millennial’s realistic guide to saving money

Getting sick of being told to cut back on avocados and takeaway coffee if you want to save money?

If you’re looking to put some cash away at the moment, it can certainly feel like lots of the advice out there is a bit cliché and, often, unrealistic.

To help, we’ve compiled a list of things that you could realistically do to help you save money.

Look at your current living situation

Chances are your biggest expenditure is currently rent and if you want to be able to put a sizeable amount of cash away each month, changing how much rent you pay is certainly the way to do it. Now, of course, not everyone will be able to change their living situation or do so quickly but if it’s feasible, here are some options:-

  • Find somewhere cheaper to live – look at different areas, smaller flats/houses etc.
  • Move back in with your parents – the rent they’ll ask you to pay will no doubt be considerably less than you’ll pay to a landlord.
  • Get someone to rent your spare room, if you have one – this could half what you spend each month but look at your contract to make sure it’s something you’re allowed to do.

While these might not be the most attractive options, they’re likely to be the most effective. Short-term ‘pain’, long-term gain.

Become a bargain hunter

It’s unrealistic to think you can go without any luxuries for however long it’s going to take you to save the amount you need, but what you can do is reduce how much you spend on them. For example:-

  • If clothes are your weakness, make a choice to only buy things that are in the sale and set a limit to how much you can spend on them each month. Also, if what you fancy is throwaway fashion, why not look to see if you can find a cheaper version somewhere? After all, you’ll probably only wear it for one season anyway.
  • Don’t think you can go without holidays? Sign up for discount holiday sites, search for late deals and make sure you shop around. Of course, if you’re saving the ideal scenario would be to forgo holidays for a while, but if they’re really something you can’t live without, they don’t have to cost the earth.
  • When it comes to food shopping, make use of discounts and maybe go to a cheaper supermarket to pick up the majority of your groceries. Local markets are also brilliant for getting lots of cheap fruit and veg.
  • Like eating out regularly? Look for 2 for one deals or half price offers. A simple search online can help you find them.

Reduce your debts

If you have a few credit cards and loans that need paying off, you might find that most of your money is going on interest charges. Take a look to see if you can reduce the amount of interest you’re paying by paying back what you owe quicker or making use of a balance transfer card.

With a balance transfer card you can move the balance from another card(s) onto it and they usually offer a no-interest introductory period, meaning if you pay the balance off during this time you won’t have to pay interest.

To see balance transfer deals you might be eligible for based on your credit score, sign-up to Noddle (if you haven’t already) and use the Card Matcher.

Give up expensive gyms

Some gyms cost a small fortune but the truth is that there are plenty out there that don’t. Take a look to see if you can find a cheaper one or, alternatively, exercise at home for free. There are loads of workout videos online that you can make use of and activities like running, walking and cycling don’t cost a thing.

Remember, this change doesn’t have to be forever and you can return to your beloved gym once you’ve achieved your goal.

Look at how you travel

Traveling costs to and from work can add up, so you may be able to make some quick-win savings just by changing your transport.

  • If you drive, see if it’s cheaper to get the bus or train to work during the week and just use the car at weekends. Alternatively, see if anyone from work is going in the same direction and alternate days of who drives or give them a lift in return for them contributing to your petrol costs.
  • If you live in walking distance to your work then why not walk instead of getting public transport, especially during the summer months.
  • Check to see if you can reduce your costs by switching the train for a bus or vice versa. Or perhaps walking to the next stop along could  save you a couple of pounds? Over time, this might add up.
  • If your employer allows you to work from home, now might be the time to make use of that a bit more. Not only will this reduce the amount you spend on travel, but it might remove you from temptation if you find yourself buying lunch every day, shopping on your break or going for after-work drinks.

Don’t waste a pay-rise

A pay rise can make all the difference and if you get one, a good idea is to pretend that you haven’t and just put that extra cash into your savings. Similarly, if you get a bonus, pop that straight into your savings fund to help top it up and bring your goal one step closer.

Treat saving like you would a bill

When you’re trying to save, it helps to treat it like you would a bill, setting up a direct debit from your current account to your savings account. This way you know the payment is being made and you can’t accidentally spend the cash during the month.

Automate the payment of a sum you know you can afford and sit back to watch your savings grow. There’s nothing stopping you adding extra cash when you have it either.

Think about where you’re saving

Different types of accounts offer different returns. Choose the wrong one and you could miss out on extra cash.

Current account: You won’t earn as much interest and you might end up using your savings fund accidentally.

Cash ISA: Interest rates on cash ISAs aren’t what they used to be, so the money you earn is likely to be small change. Unless it’s an instant cash ISA there can be restrictions about when and how you can withdraw money.

Help to Buy ISA: This government scheme allows you to claim a government bonus towards your first home of up to £3,000. Find out more here.

Lifetime ISA: You can put £4,000 per year into a Lifetime ISA, which is then topped up with 25% bonus from the government.

With the Help to Buy ISA and the Lifetime ISA there are some eligibility criteria and rules you need to be aware of, so make sure you read up on them including any investment risks beforehand.

Stay positive and don’t give up

Ok, so we may sound like a corny inspirational poster, but one of the most important things when you’re saving is to stay positive about it – even if things get tough – and resist the urge to throw in the towel. You will achieve your goal at some point, even if it takes a bit longer than you expected.