To want to know how to be good at saving money no matter what?

[ThisCheekyLemur]

It feels like every time I try to save, something unexpected comes up and the money I’ve saved goes right out the window. I’ve heard people say they can save no matter what but I’m wondering - what is their secret? Is it about discipline, having a set rule, or something else entirely? How do people make saving money a habit, no matter what’s going on in life?

OK, so you need to differentiate between

1. Long term savings (I want to get married/buy a house/make home improvements/retire early/cope if I lose my job)
2. Medium term planned savings (Christmas, birthdays, holidays)
3. "Emergency" savings (what if the boiler breaks, car is written off ...)

(2) is relatively predicatable.
(3) you build up a pot, accept it will get spent when things crop up (that's what it's there for) and keep constantly refilling it.

(1) to save regularly try making a direct debit to your savings as soon as you are paid. Then don't touch it.

A couple of things

1. Work out how much you can realistically save. It's no good planning to save £500 a month, if you actually need that money to eat
2. Work out what the "unexpected things that crop up" actually are. Are they predictable things (it was your partner's birthday) in which case you should budget for them? Are they really essential?

I think @RedSkyDelights makes a good point about 'unexpected' issues which can sometimes be predictable.

Also if your boiler is 15 years old, it's not wildly unexpected if it needs some attention. Similarly realistically budget for car maintenance. Take that out of your income each month as part of your "bills".

I think good savers are generally less optimistic about the likelihood of things going wrong.

However, you can't save what you don't have so regularly reviewing and reducing costs can be just as important.

Do a budget. What spending can you reduce? Can you earn any additional income? Overtime? Selling possessions? Side hussle?

Create a savings account to save money for yearly predictable purchases eg birthdays, holidays, Christmas, insurance (if you pay annually), car service/MOT. Add up these costs, divide by 12 and set up a monthly direct debit into the savings account as soon as you get paid. Use a savings account or cash ISA where you can get about 4.6% interest.

Now after this, you know how much you have left after living expenses and yearly predictable purchases available to actually save.

Set up a stocks and shares ISA (or a Lifetime ISA) for long term savings. The stock market is in free fall at the moment, but over the long term it will recover and historically has always been the best way to grow cash over the long term (+10 years). Set up a direct debit to go out as soon as you get paid into this. Make this at most around a quarter of the money you have available to save. Even if all you can afford is £25 a month. You can increase it in the future. Don't touch the money in this account untill you use it for your long term goal eg buy a house/retire early

Set up a savings account or a cash ISA (you can get interest rates of about 4.6% with trading212 or the post office) for savings that will be raided for emergencies, like car getting written off, loosing your job and for any medium term goals like a new kitchen. You want to maintain a minimum of 3 months living expenses in this account at all times. Do not empty it for a new kitchen, always leave 3 months worth of costs in it! Pay the remainder of your savings money into this by monthly direct debit as soon as you get paid

Keep an eye on interest rates and switch accounts as needed to get better rates.

What worked for us was getting ahead on bills. We started by assessing all annual bills, and when they were due, then broke down the likely cost into the number of months between our start point and the bill date, and saved this amount to start with.

Once the first annual bill was paid, we split the cost of that + 10% by 12, and saved this amount per month.

Once everything was being either paid or saved for monthly, we looked at maintenance costs coming up, and started savings towards those per month.

Evening out the outgoings in this way meant that we could then start actually saving regularly: the “buffer” we had created allowed for initial unexpected costs to be covered (recalculating the annual bills to however many months until next annual bill made the monthly outgoings rise slightly, but not uncontrollably).

Once you’ve got through that first bit, it does get easier…

Obsviously the big question is how much you earn: this will influence how much you save

You need to get into the habit of saving so it becomes second nature:

Eat at home
Cook from scratch
Shop around for stuff: do you need it, or just want it?

Etc.

Really good question and you've had good answers. For me good saving starts with a really good budget, and if you've truly got your budgeting right then you should very, very rarely have the sort of unexpected expenses that wipe out your long-term savings - like a PP said the sort of things that can take you by surprise usually are foreseeable with some planning, e.g. unless you have a very new car that's under warranty you know it's going to need an MOT and servicing every year, you know how much mileage you do so how often/when you would expect it to need to get new tyres, replace the brakes etc and I also try to put away in a 'car fund' approx 10-20% of the car's (new) value every year into my 'car fund' which will pay for more major repairs and/or a new car when the current one dies. I may get lucky and get more use out of my car than that (in fact current car is an 09 plate and still going strong but I know it probably hasn't got that many more years left, so I am building up the fund for the replacement). So yes although at some point soon my car fund will go to 0 I wouldn't get stressed about it because I've been planning for this for years. Same with white goods, boiler, the roof of the house, the pets and their ailments/vets bills, pretty much all those big expenses that pop up from time to time I take a pessimistic view and try to be always building a fund (seperate from my actual/long term savings to be covering).

For things like Christmas and birthdays and holidays which come around every year but still take some by surprise, again I try and dispassionately but realistically decide in advance what my budget is then set aside 1/12th of that into a separate fund every month (online banks like Monzo are brilliant for this as you can make labelled 'pots' for each expenditure), then when the time comes around be strict with myself not to exceed the budget (or if I do that it has to come from somewhere else e.g. my personal spends or clothes, not long term savings).

Basically budget, budget, budget. As a rule of thumb, 50% of your expenditure should go on 'needs' i.e. rent/mortgage, bills, food, petrol/travel, insurances and I would include building a fund to cover annual bills and white goods replacement in this, 30% should go on wants i.e. hobbies and leisure, children's activities, holidays and birthdays, and 20% then to savings (you could include things like saving towards bigger house maintenance projects, car replacement in this as well as pensions and building investments). Now of course the formula doesn't work for everyone but if either your needs or wants funds vastly exceed the %s then it may be the time to think about either seeing if you can reduce expenditure (especially in the 'wants' category) or increase income in some way. Like I say that absolutely isn't possible for all, some people can cut absolutely everything to the bone and still be left living payday to payday and not able to save anything like 20% of their income so not saying this is the only way forward but I still think the principle of map an accurate and realistic estimate of your actual annual expenditure in all these areas will help you understand how much you can 'actually' save.

Excellent advice so far - get that budget made OP!

What I'd add is - learn how to live on very little money.

When I had my first credit card, I put a large item on it and only later thought, 'now I'm £700 in debt.' What I had to do was work out my budget, as above, and then pay literally everything else against the debt.

I found that cheap meals were OK (jacket and bean and cheese), many of the things I like were free (reading, playing music, watching TV) and that, knowing I had nothing to spend, I simply did not browse the internet or go shopping. If I found myself wanting something I'd just put it out of my mind.

Therefore every month the debt decreased and my peace of mind increased. I was only 24 and I have never got into trouble again with my credit card. I didn't miss a payment or anything.

And I remember the feeling of paying the debt down and buying absolutely nothing whatsoever - no worries.

Good luck OP!

We have a budget which automatically pays into loads of accounts each month.

We have long term savings. Money we wouldn't touch unless we lost our jobs or house falls down

We have medium term savings for Christmas, kids birthdays, family holidays and school holidays. So we feed different accounts different amounts, £30 a month into an account is £360 after a year which makes parts of the year easier. We don't touch these apart from their specific purpose.

We then have our emergency savings which goes up and down all the time, as we pull out of it when needed. This is hardest to build up as it's easy to find an excuse why we need it.

Then we have bills in one account, annual or not monthly bills, like a boiler service in another.

Finally we have spending money in a Monzo. We split that even further with a bit of money into a pot for food, a bit into swimming lessons, even down to £20 into other peoples birthdays in case we have a kids birthday to attend.

This means on payday literally every pound is accounted for. You know months before if you won't have money for Christmas or that if you have to find £30 you know what you've giving up on down the line as you've taken it out already.

It takes a couple of hours to set it up. I'd really recommend different banks for the different accounts so you can forget about them a bit more. And using regular savers means you generally get a nice amount of interest and they don't actually let you withdraw. You'll almost certainly do it and find you don't have enough money each month and that's why it's been tricky.

Good luck!