Good habits that take you from being a borrower to a saver

Relax. This is not an article that will suggest that drastically cutting your spending is the only path to saving more.

Constantly saying 'no' to yourself may work for a few weeks, or months, but eventually you get frustrated, and give up. That's not being weak, that's being human! Even worse, denying yourself for so long might make you swing to the other end of the saving/spending pendulum and give up entirely.

There are better ways to nudge yourself into becoming a saver. Adopt a few smart financial habits, and chances are that saving more (and maybe spending a little bit less) will become second nature.

Make it Automatic

The best way to start saving is to not have to think about it at all. As humans, we're pretty lazy. So, if you spend a little bit of time setting up your savings now, chances are you won't mess with it after that.

If you don't have a savings account, open one. Then set up a standing order, which will regularly transfer money from your current account into your savings account. The best time is straight after you've been paid - that money will get safely stashed away before you've been able to think about spending it.

How much? The more the better, but the real win here is just getting in the habit of consistently saving and watching your account grow.

Don’t forget to check if you have access to Salary Finance Save as an employee benefit, as it could help you save directly from your pay, making it completely hassle-free. 

Name your saving account(s)

Labelling a savings account 'My Emergency Stash' or 'Next Year's Holiday' can make it easier to keep focus on that goal. It'll also help you remember what that money is really for, so you're not as tempted to use the account for unrelated spending.

Talk about it

Sharing your savings project with friends or family or colleagues can provide both motivation and support to keep at it. Who knows, you may become the founder of a circle of like-minded savers?

Keep spending

If you don't allow yourself to spend money you will likely lose your savings 'mojo' fast. The trick is to spend smart. That requires having a plan. Consider this strategy:

With any money left over after covering your bills each month, try the 80/20 or 70/30 formula. Commit to saving 80% or 70% of the extra money. The 20% or 30% leftover is for judgment-free spending.

You can, of course, come up with your own saving to spending ratio.

Make the most of raises and windfalls

You're probably spending more now than you did 5 years ago, and a big part of that might be down to lifestyle inflation. While it's nice to have an improvement in our standard of living, we quickly become used to our new 'norm'.

Make the most of raises by utilising the 80/20 strategy again. For example:

If you get a 3% raise, calculate what that comes to each month. Then apply the 80/20 or 70/30 formula to boost your savings.

This also works on any one-time pot that lands on your doorstep. Maybe your pal finally repays a long-ago loan, or you receive an inheritance. You probably won't miss money that you never had, so see if you can put most of that pay rise into savings (while still celebrating with a small amount), rather than getting used to your new level of income.

Hit pause before paying

Spending smart also requires conquering the urge to impulse buying - whether that's in store or online.

Before you commit to a purchase, stop for a sec and ask yourself: Will I be happy about this purchase tomorrow? A week from now?

If you can't answer, or the answer is a straight-up “no", then you've just saved yourself some money.

When you're browsing online for wants (not needs), slow down and leave potential purchases in your shopping cart for a few days. If you still want it after that, it's more likely to be something worthwhile.

Remove the temptations

We're all human - and it's hard to constantly say no. So just make it easier for yourself by reducing the amount of times you have to say 'no', even if it's subconscious.

Turn off any shopping alerts and unsubscribe from retailers' email lists. Delete shopping apps from your phone. If your temptation is a physical place, see if you can create a new routine that avoids walking past.

Reducing the amount of times you have to say 'no' to a temptation, reduces the risk that you'll crack and buy something you don't really want or need.