Christmas is over, decorations have come down and the lovely festive break feels like a distant memory again. Many of us have already made their New Year resolutions and are determined to stick to them.

If one of your 2014 New Year’s Resolutions is to save more money – here are a few steps to get you started.

 1.    Start with a financial health check

The most important yet very simple test: Do you spend more than you earn?

You can easily get the answer by looking at your monthly bank statement. If you spend exactly what you earn – you live purely paycheck to paycheck, if you spend more than you earn – you will rapidly build up debt.

2.    Create a budget

Start with tracking your monthly expenses. Again, if you look at your last few months’ bank statements and you’ll easily identify where most of your money is going. Maybe you should cut back on daily coffees or eating out 3 times a week. The best way to manage your income is to have a budget. Start off with a monthly budget, write down your necessary expenses (such as rent, phone bill etc) and discretionary expenses ( eating out, subscriptions etc).

3. Get Organized

Once you create a budget, you can run a personal spending diary on the same spreadsheet and make sure you don’t go over the thought budget for each type of spend. There are also many apps and web sites out there to do the work for you;, Personal Capital, MoneyWiz

Next thing to do is to set up calendar alerts for your bills, or simply make notes of direct debit dates and bill deadlines on your budget/diary.

4. Pay yourself first

Once you’ve created a budget and you’re aware of how much money you spend on your home, car and utilities, you can start saving. We recommend to follow 50/30/20 rule.

According to this rule of thumb, you should allocate 50% of your salary to essentials – rent, groceries, utilities etc. 30% of your salary goes to your personal lifestyle choices which could include personal care, hobbies, dining out, shopping etc. 20% of your monthly income needs to go to your savings account.

5. Raise some cash by selling the stuff you don’t need

You can convert  those clothes, shoes, designer bags that you don’t need into cash in no time. Shop your own closet and rediscover the things you love and wear, and the things you can no longer fit in or simply don’t need. Next, make a list of items you want to sell/give away and put them up on eBay or Gumtree.

6. Build Your Emergency  fund

Once your financial situation gets better, you should start thinking about building an emergency fund.  This fund can help you cover any unexpected costs that might come up in future, such as losing your job, unexpected sickness etc.

7. Review your memberships and subscriptions

Take a fresh look at your monthly subscriptions and make a list of them and how much each costs. You’ll probably be surprised how much those inexpensive recurring charges amount to, and how much you can save without them.  You don’t really need 5 TV show streaming services, do you?

How about your gym membership?  Never renew it automatically in the beginning of the year. Most gyms offer different discounts to retain their customers, especially in January. Do some research and find out more about offers.

The research found out that average Brit wastes £14 per month on unused subs and memberships. If you are in the same boat,  don’t wait and start saving.

8. Go for less

Simply take advantage of many discount, cashback, freebie offers and you’ll be surprised how much money you can save.  Here are a few of them:

Websites offering discounts on products and services:,, ,,,

Free sample sites: , , ,,

Cashback sites:,,

9. Stay out of the credit card trap

If you use a credit card, make sure you have funds set aside to pay it off completely in next few months. With low APRs and no interest offers, its easy to fall into credit card trap where you rely on your cards, more and more. It will end up costing you a fortune in interest and finance charges.

10. Avoid Buyer’s Remorse

Before you make an impulse purchase, ask yourself these 3 questions:

  • Do I need this or just want this?
  • Do I need this right now?
  • Can I find this cheaper somewhere else?
11. Find Alternatives

Find alternative options where you can. For example, if you are used to drink morning coffee on your way to work, rather than stopping by at your local coffee shop every morning try making coffee at home and carry with you. Look for alternative options of getting to work, sharing a petrol with colleague, cycling, taking a bus etc. Think of your hobbies which can bring you money. You like blogging? Why not make money online. Good at languages? Why not do some freelance work in the weekend. 

Possibilities are endless. Set goals – its the key to financial success, spend less than you earn – it’s the secret to creating wealth.

We hope these basic tips will encourage you to get started.

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