When you are saving money, it is a good idea to set a realistic savings goal so that you can keep track of your progress. Whether you are looking to save for a down payment on a house or simply to build up an emergency fund, having some money in savings is always a good idea.
Saving $1300 in three months is a goal that you can absolutely achieve – it works out at about $100 per week. Below are some tips and tricks on how to save, although exactly which tips will work for you will depend on your lifestyle and current spending habits.
Methods of Saving money
While the basic principle of saving money – having more coming in than going out of your account – is obvious, there are some methods that people use to help them actively save money. While you can use just one, mixing and matching multiple methods will help you reach your goals faster.
No Spending Weeks
The first method is to have a period of time where you do not spend anything. This may be a day or a week or even longer, although obviously there are still bills that need to be paid if it goes on for too long.
The idea is that instead of buying groceries, you eat out of your cupboard or freezer, that you delay any social activities and don’t buy new clothes or anything else. This is a great way to start your savings journey as your determination will be higher at the beginning and seeing your savings rapidly increase will really make it obvious that you can do this.
The next method is the ’rounding up’ method. This is the idea that whenever you buy something, you round up the value to the nearest dollar and put the excess in your savings account. A few cents at a time will not be missed and you’d be surprised how quickly your savings grow.
This method works best if you tend to pay for things in cash. Then you can pay with notes and drop the change into a jar to be deposited in your savings account once every few days.
Another option is to deposit money into your savings whenever you would have spent money but decide not to. So, for example, if you would normally go to get a coffee, you can transfer the amount you would spend into your savings instead. This lets you see exactly how much you are saving by not buying non-essentials.
This method works really well if you are doing a no-spending week and can really drive home exactly how much you spend without realizing it.
Perhaps the easiest way to save is to set up a direct deposit from your main bank account into your savings account. Simply calculate how much you wish to save per month or per week and have that transferred directly, ideally shortly after you get paid.
This may be easier if you get paid a set amount rather than having a variable paycheck, as going into an overdraft accidentally would end up costing you money in expensive overdraft fees.
Step One: Take Financial Control
All of the saving tips in the world won’t help you, however, if you do not take control of your finances. This does not mean you have to get expensive financial products, nor cut expenses to zero, it simply means understanding your money and how you use it.
Work out where your money goes
The first thing to do is to work out where your money goes. You can do this by looking at your bank statements and old receipts. You should make a note of all your expenses, including your rent or mortgage, your utility bills, the cost of your car or transport, and the amount of money you use to socialize, to buy food or clothes.
Every expenditure should have a category that it fits in that makes sense to you. This will let you see how much you spend on essentials and how much you can save by simply not buying clothes, coffee, or other non-essentials.
Set a budget
Once you know where your money goes, you can make a budget. Look at the categories you made earlier, and use these to work out how much you need for each area, how much you can transfer to your savings, and how much money you need for a weekly budget for food, transport, and non-essentials.
It is often worth re-visiting your budget once you have begun to save money as you may find that certain categories have become significantly lower.
Get a savings account
Absolutely nothing in this article is more useful than setting up a savings account. This will allow you to keep track of your savings balance, will give a better interest rate than your checking account, and stop you from accidentally spending the extra money you have saved.
There are various types of account, and if you do not need instant access, an account that you must wait to access or not touch for a certain period of time tend to give a better interest rate than an instant access account.
Improve your Spending Habits
While some people like to have a weekly set amount for each of food, clothing, and toiletries, some people find it easier to have a weekly budget for things that need to be bought on a weekly basis. In general, this means less work for you as you do not have to log your spending habits with the same level of detail, and means you can sneak in the odd treat without blowing your budget.
Some people prefer to transfer this to a second checking account on a weekly basis, while others prefer to take it out in cash at the start of the week. The cash-in-hand approach works great if you are using the Rounding Up method of money-saving – especially if you find that getting a new account isn’t cost-effective. This also means that you could save twice – once in your budget and then again on your allowance for the week.
Reduce your debt
While it may seem counterintuitive to increase your outgoings to save more, paying off your debt will decrease your outgoings in the long run. Making a payment that covers interest only does not reduce the amount you owe, but if you pay above this, not only will your overall debt reduce, but your monthly interest will go down as well.
You should start paying off the debt with the highest interest rate, then the second-highest, and so on. If you have multiple small debts it may be a good idea to combine them into one larger low-interest loan that will be easier to keep on top of and will reduce your monthly payments.
Do keep in mind that some debts may have penalties for early repayment and you should check the terms and conditions of each loan before you pay the balance.
Step Two: Saving money
Unsurprisingly, a crucial part of a savings plan is to actually save. Saving on your monthly outgoings is not difficult, and below are some ways that you may not have thought of.
Save money on monthly bills
When you were looking at how your funds were spent, a large portion of your paycheck probably went on utility bills and monthly outgoings.
While you cannot get rid of these expenses entirely you can certainly cut them down dramatically to help reach your savings goal. Below are some tips for reducing these.
- Cut out unnecessary subscriptions such as streaming services.
- Use a comparison website to compare rates at different companies to make sure you are getting the lowest costs.
- Call up your current provider to see if they can reduce your bills.
Save money on groceries
While reducing spending on groceries may seem like one of the hardest ways of saving, there are a number of ways to do this without affecting your lifestyle.
A great tip is to create a meal plan. This will allow you to reduce waste, and every piece of wasted food represents dollars that you could have saved.
You should also keep an eye out for offers and reduce items while shopping. Do not buy things you won’t use, but if you know of a meal you can make with something that is half off, buy it and you can often freeze it until the following week.
Changing your diet to include less meat and dairy and more vegetables will also cut the expense of your grocery bill by a lot as well as improve your health.
While you should not expect to achieve perfection the first time you make a meal plan, over three months you should find this becomes easier and that the costs of your weekly food shops begin to dramatically reduce.
Save money on transport
While driving may be the easiest to get around, it is also one of the most expensive ways to travel as you have to pay for fuel, car insurance, car payments, upkeep, and tax. Instead of driving, see if you can walk a journey or cycle, not only are these methods free but they are also better for your health. Some jobs will have cycle schemes that will help you afford a bicycle.
If you cannot feasibly walk or cycle, look at getting a travel pass for public transport as this can reduce the expenses associated with your commute and other travel.
Save money while shopping
While it is impossible to not have any outgoings for an entire three months, with certain credit cards, you can earn points while you shop, which can often then be used to buy the goods and services that you need.
You will need to check what credit rating the bank requires, but if your current rating is high, this can be a good addition to your savings plan.
Bear in mind that these rewards do not help you save if you end up paying more because of them, so be wary of the limits they set. You should also ensure that you pay off the full balance of the credit card at the end of every month to avoid paying interest on it.
Step Three: Get More Income
The second part of maximizing the difference between your income and your outgoings is to attempt to increase the funds you have coming in. While this seems obvious, sometimes actually doing so can be a daunting task. Below are some easy ways to get you started.
Ask for a raise
A large part of your life is probably spent at work. If you have been at your job for a while and know you perform well, you could be due a raise. This would not only help increase your income while you are actively saving but will continue to do so after you have reached your goal.
However, this can seem terrifying, or be rejected, and so there are other options you can use.
Start a Side Hustle
There are many ways to bring in extra income that don’t involve your main career. While a side hustle may not be easy to achieve, neither does it have to consume your life.
For example, if you have extra space, you can rent out a spare room to make sure you have a source of passive income. You can find a website to help with this, although exactly which one is best will depend on where exactly you live.
Other avenues include monetizing creative hobbies such as painting or sewing, becoming a freelance writer, giving online tutoring or courses, or upcycling furniture that you find for free online and selling it for a profit.
Sell unwanted items
The chances are that you have many unwanted items lying around your house. Instead of letting these sit around to clutter up your life, you can sell them and add the profit to your finances. Using a website such as eBay or Facebook Marketplace makes this easier than ever and de-cluttering your home has even been linked to lower stress levels.
How to save $1300 in three months
Saving doesn’t have to mean cutting out every unnecessary expense and doesn’t have to have a negative impact on your lifestyle. While this article contains many methods of helping you save, which ones are right for you will depend entirely on your situation.
That said, the three key steps in any savings plan are to take control of your finances, increase your earnings and decrease your outgoings. If you make sure you have covered each of these categories, you will make good progress towards your goal.
Hopefully, this article will help you to make a savings plan and reach your goal of saving $1300 in three months. Good luck!