Top 10 tips to save money in the New Year

Now that 2016 has arrived, it is time to get your finances in check and make provisions to save money in the year ahead. Here are some pointers on how to start.

1. Reduce debt

If you have credit card debt, you may feel like it’s going to take forever to pay it off. You can get ahead by choosing one card; ideally, the one with the highest interest rate and where you pay as much as you can on it every month. If you have other cards, pay the minimum balance on those until you have paid off the first card. Then, choose the next card and pay extra on it while you pay minimums on the others. If you pay only the minimums on all your cards, you will be paying a lot more in interest than you might realise.

2. Focus on savings

Decide how much of your income is available to save each month. Have it direct-deposited to your savings account or a separate account if one needs to be opened. Wherever you decide to keep your savings, make sure you put money into it every month. That diverted money will make a big difference for you later.­

3. Use cash first

Take out enough cash to last one week at a time. Make up your mind that the cash you have is all you get for discretionary expenses – or – things that you could live without each week. It is much easier to turn down a pair of shoes when it will take the last of your week’s cash than it is when you just have to swipe a credit card.

4. Cut down on unnecessary costs

Wh­ether it is buying your morning coffee from Starbucks or regularly dining out, these treats can be expensive. Why not take a packed lunch to work or eat in more often? By cutting down on lunchtime café expenses, you can begin to see those funds build.

5. Share responsibility

Make sure you’re not the only member of your household concerned about your budget. If you are working hard to save money, but your spouse is out spending you into debt, you are fighting a losing battle. Sit down together and make a plan to determine how much ­spending money you should each have.

6. Keep the receipts

You probably monitored your expenses for several weeks to make a budget. Once the budget is made it can be tempting to resist checking up on every little expense. But keeping track really can help you stick to your budget. You will be less likely to overspend if you realise how much money has actually gone through your hands.

7. Check your bank balance online

If you are on a tight budget, a couple of small mistakes can lead to overdraft charges and insufficient funds in your account. Keeping a regular handle on your money can create a positive habit and you ­can make sure your personal ledger stays in the black.

8. Analyse your spending

Look through your budget and all your photos of receipts. Can you find an expense that can be cut? Maybe you could set up a carpool with a friend or take the metro / bus to work on some days. C­utting out on fuel costs can help increase the amount of money you have available for savings and purchases.

9. Life is a hurdle race, not a flat race

Remember that life is unpredictable and things happen that are out of our control. When­ you make a budget, try to allow some extra money for variable expenses. Be gentle with yourself if you go over your budget sometimes. It can be hard to get back on track ­if you let yourself get too frustrated over a mistake or two.

10. Reward yourself

If you can set a regime and stick to it, you will see rapid improvement in your financial situation. Setting personal financial goals, even reducing debt deserves personal reward. So treat yourself to small monthly rewards. You choose – just don’t go back to square one.

Budgeting will come more easily the longer you stay with it and you will reap the rewards in years to come. Above all, remember that budgeting is worth the effort. Keeping on budget can make a significant difference across many areas of your life, since so many things are affected by your financial status.

Jamie Scott is a financial advisor at Prestige Wealth Solutions