Saving money isn’t always about giving up everything you enjoy. It’s about understanding where your money goes and making a few sensible changes, and being consistent over time.
I’m not a financial adviser, and this isn’t investment advice. These are simply the habits that have helped me save money over the years, avoid unnecessary annoying debt, and become much more disciplined with my finances. (Discipline is key!)
If you’re trying to build an emergency fund, save for something expensive, or simply stop living payday to payday, these are the steps that have worked for me.
Step 1: Review Your Bank Statements
The first thing I recommend is opening your banking app and looking through the last three to six months of transactions.
Don’t just glance through them. Take the time to go through every payment and ask yourself a simple question:
Did I actually need this?
Make a note of anything that falls into one of these categories:
- Unused subscriptions
- Impulse purchases
- Takeaways
- Coffee and snacks
- Entertainment
- Shopping you barely remember
- Other non-essential spending
Most people are surprised by how much money quietly disappears each month without them really noticing. It flows like water into the ocean of life, cascading through our fingers if we don’t cup our hands.
The goal isn’t to feel guilty. It’s simply to understand your spending habits before trying to change them. Believe me, I’ve burned enough money myself over the years.
Step 2: Cancel Unused Subscriptions
Subscription services have become one of the easiest ways to waste money.
Streaming services, apps, cloud storage, gym memberships, gaming subscriptions, magazines and countless other monthly payments can build up without us thinking about them.
Go through every recurring payment.
If you haven’t used something recently, cancel it.
Even if you think you’ll use it “one day”, it’s often better to cancel now and subscribe again later if you genuinely need it.
Keep a note of everything you cancel and work out how much you’ll save each month.
Those savings soon add up… What is £10.00 per month? £120.00 per year. That’s one shift of work per year per subscription like this you cancel. It’s not a lot but we’re just starting!
Step 3: Work Out Your Average Non-Essential Spending
Now look back over those same three to six months.
Add together everything you’ve spent on things you don’t actually need to survive.
This might include:
- Meals out
- Cinema trips
- Theatre tickets
- Snacks
- Alcohol
- Takeaways
- Clothes you didn’t need
- Hobby purchases
- Entertainment
Once you’ve added everything together, divide it by the number of months you’ve reviewed.
This gives you a realistic monthly average.
This number is incredibly useful because it tells you roughly how much money you could save without affecting your essential bills. I’m not saying don’t have fun and be miserable like me, but it might help you think before going crazy on the spending.
Step 4: Open a Savings Account or ISA
Once you know how much you’re capable of saving, make it difficult to accidentally spend it.
Most UK banks allow you to create separate savings accounts or savings pots in just a few minutes.
Some people also like using Monzo because its savings pots make separating money simple and can earn a small amount of interest depending on the account you choose.
You could also consider opening a Cash ISA if you’re building longer-term savings.
The important part isn’t really which bank you choose.
The important part is having somewhere separate to move your savings automatically.
It’s also worth remembering that many people can earn some savings interest before paying tax because of the UK’s Personal Savings Allowance, although the amount depends on your income tax band. If you’re unsure how this applies to you, it’s worth checking the current HMRC guidance.
Step 5: Know When Payday Is
One of the easiest ways to save money is to move it before you have the chance to spend it.
As soon as you’re paid each month, set up an automatic transfer into your savings account.
Personally, I aim to move between 70% and 80% of the money I’ve identified as disposable spending into savings straight away.
If the money never sits in your spending account, you’re far less likely to waste it. Moving it out is a hassle, so I’d rather have a Pot Noodle or a can of tuna than order in.
Automation removes willpower from the equation, or at least tests it somewhat.
Step 6: Pay Off Debt Where You Can
If you have outstanding finance or expensive debt, make paying it off a priority.
Interest works against you. It makes life hard and it’s like having a leach sucking the blood out of your wallet.
Every month you’re paying interest is money that could have been growing your savings instead.
Start with the debts carrying the highest interest rates where possible.
Once they’re gone, redirect those monthly payments into savings instead. You’re unlikely to miss them, after all, you’re used to paying them anyway!
Step 7: Avoid Buying Things on Finance
This is one of the biggest rules I try to live by.
If I can’t afford something today, I don’t finance it.
Instead, I save specifically for it.
Finance often makes expensive purchases feel affordable because you’re only thinking about the monthly payment.
Before long, those monthly payments stack up and reduce your financial freedom.
Saving first means you have time to decide whether you actually want the item.
Quite often, by the time you’ve saved enough, you realise you no longer need it.
Step 8: Save Specifically for Expensive Purchases
Whenever I decide I want something expensive, I don’t dip into my existing savings.
Instead, I start saving from that day onward.
For me, it’s usually camera equipment. I love cameras, especially low light lenses. (Love my 12mm 2.0 from Olympus… It’s wide angle… Perfection!)
I’ll work overtime if it’s available.
I’ll cut back on unnecessary spending.
I’ll skip buying little luxuries for a while.
Eventually I reach the amount I need.
Interestingly, once I’ve saved enough, I often stop and ask myself whether I still want the item.
Sometimes I buy it.
Sometimes I decide I’d rather keep the money.
Either way, I’m making a deliberate decision rather than an emotional purchase.
Step 9: Separate Your Money
One habit that dramatically reduced my impulse buying was separating my finances across different accounts.
Years ago I was terrible for buying things on impulse. (I have more skins in league of legends than any man would ever need!)
When all my money sat in one account, it felt available to spend.
Now I keep spending money separate from savings.
I also keep separate money in a different account for travel.
Having clear purposes for each account makes it much easier to stick to a budget.
If the spending account is running low, that’s a clear signal that it’s time to stop buying unnecessary things.
Step 10: Budget for Regular Expenses
Travel is a good example actually, so let’s stick with that!
I know roughly what I spend travelling each month.
At the start of every month, I transfer slightly more than I expect to need into a separate account that’s only used for travel.
If there’s money left over after I’ve covered my travel costs, I move around 80% of the remainder into savings.
It means leftover money doesn’t quietly disappear on impulse purchases.
Step 11: Save Whatever Is Left
At the end of each month I check what’s left in my spending account.
Rather than carrying it into the next month and gradually spending it, I transfer around 80% of the remaining balance into savings.
I still leave a little flexibility, but most of the unused money continues building my savings instead.
It’s a simple habit that’s made a significant difference over time. It’s completely changed my life and I hope it helps you too!
Step 12: Increase Your Income
Saving money is sadly only half the equation.
The other half is earning more.
Whenever possible, I look for additional income streams.
That could be:
- Overtime at work
- Freelance work
- Selling unwanted items
- Online content
- Small side projects
- Any legitimate opportunity to earn extra money
None of these need to make thousands of pounds.
Even small amounts add up over a year.
The key is not increasing your lifestyle every time your income increases.
Instead, save a large proportion of anything extra you earn.
Overtime Is One of the Fastest Ways to Save
If your employer offers overtime and you’re able to do it, it can make a huge difference.
Rather than treating overtime pay as spending money, I try to save around 80% of it, and all of it if possible.
That allows me to enjoy a little of the extra income while making meaningful progress towards my financial goals.
Over time, those extra shifts can build a surprisingly large savings balance.
A Note on Fasting
One habit that has also reduced my spending is occasionally skipping one meal on days when I’m not doing physical work.
If I’m spending most of the day sitting at a desk or relaxing, I often don’t feel I need three full meals.
The money I would have spent on that meal goes straight into savings instead.
This isn’t something I’d recommend for everyone, and it certainly isn’t appropriate if you have medical conditions, dietary requirements or physically demanding work. It’s simply a personal habit that has helped me spend a little less while remaining mindful of my health. I recommend giving it a shot if you don’t mind the idea of skipping meals occasionally.
Consistency Beats Perfection
None of these habits are particularly exciting.
They’re also not complicated.
The biggest difference comes from repeating them month after month.
- Review your spending.
- Cancel what you don’t use.
- Separate your money.
- Save automatically.
- Avoid unnecessary finance.
- Earn more where possible.
The individual changes may seem small, but together they can completely change your financial position over the course of a few years.
Building savings is rarely about one big decision.
It’s usually the result of hundreds of small, sensible choices made consistently over time.
If this article has been useful, consider sharing it with someone who might benefit from it. Sometimes a simple system is all someone needs to start taking control of their finances.
