Money Matters Team

Change Your Money Mindset & Start Saving

By Money Matters Team 16/12/2020

Master your money mindset

As much as conversations about money make some of us want to bury our heads in the sand, we all know the importance of developing healthy spending habits. No matter your cash personality, reviewing how you spend and save can significantly improve your bank balance and better your financial future.

How to manage spending habits

So you want to know how to save your money and not spend it all? We share five simple ways to up your saving game and change your outlook on spending.

Cut back on unnecessary spending

If we take a look at British spending habits (pre-pandemic), the average UK household spends around £585.60 a week, which equates to £30,451 a year. Transport, housing and recreation account for an average of 44% of this total household expenditure. Families are splashing out around £76.90 a week on entertainment, which covers everything from streaming services to fitness (such as gym and online memberships).

While some of your expenses are no doubt going towards essentials, you should take time to review how much you spend on non-essentials each week. By being more mindful about where your money is going, you can highlight areas where you could make savings and stop your money disappearing so quickly. This useful tool shows you just how much you spend on these extras, and how much you could save by making a few cutbacks.

Set financial goals

Perhaps you have a large financial goal in mind, such as saving up a deposit for your first home, paying off your credit card or you just want to put money away for a rainy day. No matter how big or small, a financial goal can keep you motivated and assist in changing your money mindset.

Why not start small by setting yourself an attainable daily money-saving challenge? This could consist of taking coffee out with you in a reusable cup, or planning what you’re going to cook for dinner that night so there is no temptation to buy a takeaway. You’ll be surprised at how much money you can save in a short period of time.

Create a saving and spending plan

Learn how to save money every day by making a budget and sticking to it. Dedicate a percentage of your income to go straight into a savings account, so it’s kept separate from your spending money. There are many free budget planning resources available to help you make the most of your money and take back control of your cash.

There are also many open banking apps which you can link with your banking account and daily savings apps that can help you stay on track. These apps show spending analytics and categorise your outgoings to make it easy to see your finances.

Be mindful when spending via contactless and payment apps

Whether you’re using a card or devices like smartphones, tablets and smartwatches, contactless payments are so fast and convenient, it’s sometimes easy to forget to keep an eye on our spending. Research found that contactless payment users are likely to spend 30% more than those paying by cash.

If you do find yourself overspending or becoming too reliant on your credit card, be sure to set a cap on your contactless payments. Keeping your spending to a budget could help you on your way to developing a positive money mindset.

Bills, bills, bills

You might be surprised to find out that you could make huge savings without making any real sacrifices. Last year alone, Experian found that the average UK household was overpaying on bills by a shocking £2,500. The same goes for car insurance, with an estimated six million motorists overpaying by £675million each year by not shopping around for new policies when their cover comes to an end.

It’s important to ensure you’re getting the best deal from all bills and services. Simple things such as looking on comparison sites when it comes to renewing energy providers or changing where you do your weekly food shop can make a big difference to your spending habits.

Ready to overhaul your finances?

Feeling empowered and ready to become a savvier spender? It’s time to take control of your spending habits and master your money mindset. Fancy getting ahead with your savings? Check out our savings support page and range of savings accounts designed to suit your long and short-term goals.


Sources:

  1. https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/expenditure/bulletins/familyspendingintheuk/april2018tomarch2019
  2. https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/expenditure/articles/familyspendingexplorer/2020-03-26
  3. https://newsroom.mastercard.com/press-releases/new-mastercard-advisors-study-on-contactless-payments-shows-almost-30-lift-in-total-spend-within-first-year-of-adoption/
  4. https://www.thisismoney.co.uk/money/cars/article-7447137/Motorists-overpay-675m-year-car-insurance-not-switching.html

This Money Matters post aims to be informative and engaging. Though it may include tips and information, it does not constitute advice and should not be used as a basis for any financial decisions. Sainsbury's Bank accepts no responsibility for the opinions and views of external contributors and the content of external websites included within this post. Some links may take you to another Sainsbury's Bank page. All information in this post was correct at date of publication.