Ever notice how most ‘saving money’ blogs basically tell you to give up every little thing that gives you joy? Don’t go out to eat, use what’s in the fridge. Forget about buying that lovely flat white and treat yourself to an instant coffee instead.
It’s a rubbish solution to a problem that has probably been written by an author who’s never had to scrape and save – or they’re a bit masochistic. Either way, it’s not for everyone.
So, instead of giving things up, how can you save money but keep spending?
How to save money without giving up things you enjoy
The good news is that it is possible to save money without giving up life’s little luxuries, but it always helps to make sure you have no high-interest debt first.
This is because the money you’re being charged on your debt might be higher than the amount you’re tucking away, effectively creating a loss despite having more savings. So, if you do have debt, consider making your budgeting stricter until you get it paid off.
But if you are ready to start saving, here are a few things that you could consider doing.
Unless you're struggling to pay your bills each month, don’t listen to anyone who tells you to just stop buying things. Firstly, it's so much easier said than done, and secondly, if it makes you happy, then that should be worth every penny.
What you could do, though, is look at how you shop. If you’re already a savvy shopper, then there’s no point telling you to check prices in different stores or try to find discount codes. But have you thought about using loyalty cards or cashback sites?
While they may not save you a fortune on every purchase, you could get a small percentage back and that can really add up – even if it's just a few pennies at a time. With most cashback sites you can ask for the money to be paid out at any time, so it might be worth setting a limit for yourself (say £50) to make it easier to leave the money alone and start building up your savings.
Have your cake and eat it
You know that occasional coffee and cake you treat yourself to that everyone tells you to give up to save money? Ignore it. It’s rubbish. Coffee is awesome and cake is even better. So if you want it, then go ahead and have it.
In fact, why not spend a tiny bit more by rounding your purchase up and putting the extra in savings? A lot of banks these days (including Monzo, Lloyds, and Halifax) offer a roundup feature on purchases and will do this for you as and when you make purchases.
This means that if you were to spend £4.25, you would round it up to £5 and the extra 75p would be put into your savings. And, if we’re being honest, you’d probably already think of it as spending a fiver anyway, so you’re unlikely to miss it.
Doing this every time you make a purchase could add up, and the more you buy the more you save – it’s a conundrum, but it has the potential to work.
Save first, spend second
Getting paid is a great feeling and it can be tempting to start splashing the cash straight away. But instead of heading straight to the pub or your favourite shop, take two minutes to tuck some money away. You could even do this on the walk to the pub!
It doesn’t have to be a huge amount, and you may see articles that suggest anything from 20-40% of your income. But for some of us, that’s a crazy amount of money (especially with the cost of things like food and energy bills these days). We actually need to afford to live!
Instead, just put away money that won’t be missed in the short term – that could be £5, £10, £25, £50, or even £100 or more. From my experience, starting small then being able to put more in later always feels better than starting too big and having to dip into your savings if you struggle to pay your bills.
Does it make you happy?
This is a personal rule of mine, but it’s one I love to share. Before buying anything, ask yourself: does it make you happy?
Obviously, this doesn’t apply to everything – things like your household bills, rent or mortgage, and groceries will still need to be paid for – but it could make you re-evaluate what you’re spending your money on each month.
Taking this approach could help you to stop spending money on things that are just ‘meh’ for a short-lived dopamine hit and save for that thing you really want.
So, for example, say you're after a new pair of trainers but the ones you really want are £80. Don’t buy ones “that’ll do” just because they’re cheap.
That might seem like a weird thing to say, as they’re double the price, but it’ll be what you really want. If you love them and you waited to buy them as you worked hard to save the money you needed, then you’ll probably keep them for longer. Also, you'll likely spend less money than you would buying more shoes that you think will just do.
Make your money work harder
If you already have some savings in a dedicated pot but are frustrated that they’re not growing much due to low-interest rates, then you may want to look at ways to make your money work harder.
This is where investing can really come into its own. With Wealthify, you can start investing from just £1 (£50 for Pensions), making it an affordable option for anyone looking to invest. And you don't need to be a stock market expert to start either because we'll build you a portfolio and manage it for you.
So, how does this work? Well, unlike traditional savings accounts, your investments aren’t pinned to a single point of return – like an interest rate set by your bank. Instead, your money will rise and fall as the value of your different investments change over time.
However, i’s important to note that when you invest, you’re taking a risk with your money and you may get back less than you put in.
Investing is an approach that tends to work best in the long-term. According to Bloomberg data, those who invested in FTSE 100 stocks for any 10-year period between 1986 and 2022 actually had an 88% chance of making a gain.
But not all of those years would have seen a positive return. So, if you’d just stayed invested for only a year or two, then you could have made a loss. But if you took a longer-term approach, ignoring market volatility, you could have a better chance of making a profit on your investments.
Not sure where to start? Well, a Stocks and Shares ISA allows you to invest up to £20,000 per tax year without needing to pay income or capital gains tax.
You may not be able to max this amount out each year, but everything you put in during the 2023/24 tax year will be tax-free going forward, and over time your pot could really build up.
It’s up to you
So, there you have it. These are five ways that you could save money and keep the things in your life that give you joy. It might be slow going building up your savings pot, but not impossible.
If you’re thinking about investing but aren’t sure where to start, then why not let us take on the hard work for you? You can start investing in our Stocks and Shares ISA with just £1 and there’s no monthly payments required – so pop money in, or take it out, whenever you want with no hidden charges. Find out about our fees here.
Your tax treatment will depend on your individual circumstances and it may be subject to change in the future.
Please remember that past performance is not a reliable indicator of your future results.
With investing, your capital is at risk, so the value of your investments can go down as well as up, which means you could get back less than you initially invested.