How to start saving?

[hoops997]

I'm quite ashamed to say that I'm the ripe old age of 33 and have not a penny in savings, how on earth do you go about starting to save money?

Tis easy - you start with your income at the beginning of the month and calculate all your expenses - housing, food, etc and a sum for luxuries and put the remainder in a savings account - ie save at the beginning of the month. Do not wait until the end of the month and save what is left as there is normally nothing to save!

What account would anyone recommend? I don't really want to have access, otherwise I would know I had money stashed and want to spend it on crap essentials

Which bank are you with? Most banks offer simple savings accounts varying degrees of access. Cash ISAs are a good way to save money as the interest is tax-free. If you want a postal account to deter you from dipping in too much, comparison sites like www.moneysupermarket.com provide tables showing which banks and building societies are paying the best interest.

Fully agree with the idea of paying yourself first i.e. putting spare cash in the savings account at the start of the month using a standing order. What also helps is if you make savings part of a bigger budgeting & personal finance exercise. Keeping track of your spending either via a notebook, spreadsheet or software like the free MS Money Plus Sunset Edition makes it very easy to spend less and save more.

If there's nothing to save you're in a bad way but if you can put away even as little as a fiver and budget around what's left, it's a start.

at the moent I'm with co-op bank and their savings accounts aren't very good, Ive been looking at a regular savings account where you get 4% if you don't touch it for a whole year, also I squander around £300 a month on rubbish, it literally just fritters away and I have nothing to show for it

It sounds like you arr spending all the moiney that comes in, so rather than searching for savings account, I think your first step neeeds to be to see where it is going.

Keeo ALL your receipts and note them down, at least monthly, preferably weekly. When you know where the money is going you can consider what to cut down.

Be aware that you will be tempted to classify your Tesco receipts as "groceries" but when you look carefully you may see it shows something like this

Potatoes £1.60
Turnips 80p
Bread £1.40
Chocolate biscuits 4 @ £1.20 = £4.80
Wine 4 @ £5 = £20
Cigarettes £18.50
Gin £12
Brandy £12
Chocolate £4.00
Pains au chocolat £2.50
Bakewell tart £3.99
Tin sardines 50p
Curry readymeal £6.00
Grapefruit 80p

Agree with the 'put it into savings on payday' approach.
For a lot of people, if it's there- in your wallet/purse or account, then it is available for spending. If you have a standing order going out of your account on payday, then you "think" you only have the 'net' amount coming into your a/c each month/week (bit like most of us know how much we earn net of tax & NI & pension each month, but not what the gross figure for the month is). You need to do that to yourself... "tax" yourself, so you never really have that amount in the first place.
Start with something like £50 maybe, whilst you are doing your budget as PigletJohn suggests. You may well find you can actually up it to a lot more.
Why not have 2 or 3 savingas a/cs ? - 1 for something you want to treat yourself to, that you can reach a goal of in a few months.... maybe a holiday (?) and one for longer term savings.

backforgood that's exactly how I see money, if it's in my account it's for spends, if I set up a standing order it'll have already been spent so I won't think about it, piglet I do group everything under groceries, so need to stop that, at the moment I spend £40-50 on groceries for me and DS, I need to half it or even get actual food shopping down to £15........I really am awful with my money, it's a shame really because I have no debts and have an income of £2K a month

cogito I have downloaded that software so will be inputting all my money, outgoings and income :)

If your just making ends meet at the moment, you need to free up some cash.
Have you looked at switching phone, sky, broadband, gas, elec?
If you can make any savings on those, put the difference into a savings account.
Got any subscriptions you don't use (gym?)?
In the years of pay rises, DH and I have put half our pay rise into savings. Its quite a big sum now getting transferred across each month, and we also get to benefit from the payrise.

Knowing where your money is going is the most important step.

Because when you work out that you have a £20 a week latte habit, its quite sobering.......

And you take a jar of instant to work instead. Voila - £17 quid a week into a cash ISA.

I think i am paying over the odds for gas and electric, just moved broadband from BT to o2, that has saved me £187 a year apparently, apart from that only normal bills, I don't smoke or drink that often, ride my bike to work, most of my outgoings are rent and childcare, that equals £1200, will look at all other bills, see if I can squeeze them down....

It's well worth spending an afternoon going through each one of your regular payments such as utilities, insurance etc., and using comparison sites to see if you can get a better deal. Also - and this may sound daft - make sure you know what each DD pays for. It's quite common to set up subscriptions to services which rumble on for years without question.

Other suggestions. If you use a credit card to pay for purchases you can make money by switching to one that offers cashback or other bonuses. Set up a Direct Debit to pay it off in full each month so that you never get charged interest.

If you have a current account into which £1000+/month is deposited regularly, some banks, like Halifax, offer a cash reward each month. Banks can also offer financial incentives to switch to them. Avoid being lured into special 'premium' accounts which charge a monthly fee for various benefits. They are rarely worth it.

Comparison sites show tables of savings products, cashback cards and current accounts offering rewards. If you can save £5 here or make £5 there it quickly adds up to quite a lot.

BTW... £40-£50/week on groceries is not excessive. £15/week would be miserable. Plenty of places you can save money before you compromise on the quality of food you eat.

Not an expert by any stretchbut, do you have a save as you earn (SAYE) scheme rhrough your work. Money comes off before tax, you save for 3 years, at the end you get your money plus bonuses or in some cases the opportunity to buy shares at a midprice from the start of the scheme. So, usually less than at redemption. Then you can hold onto the shares or take the cash. You can get hold of your money at any time with no penalty and, if long enough into the scheme, usually with some of your bonus, if you had an emergency. This is why it's good to have a few on the go. So start off with £50, put £50 in the next one, & so on till you reach your max. If you keep them up, after the first 3 years you'll get a wee windfall every year.

I love it. I save the maximum £250 a month and just got used to not having the cash over time. I have 4 schemes on the go atm adding up to £250 - not £1k .

I am not well paid. Neither is dh really. But this is our only savings after having 2 kids almost back to back. We managed to keep up the payments even while I was on ML when all our other savings disappeared.

Or sell the shares immediately and get even more cash.

in my example till receipt, I had put in some samples that are meant to trigger the thought "I've got no money... just a minute... I spend £100 a week on booze and chocolate...could that be why I have no money?"

It could just as well be games, gambling, takeaways, glossy magazines, fags, coffee shops, TV sales channels - anything that, when you look at it, you realise you might want to change your spending pattern. I'm told that a lot of people in financial difficulties avoid keeping and looking at the receipts because they don't want to address the problem spend. If all your money goes on bread, milk and poatoes, obviously this doesn't apply.

Start simple, for eg

I have a pot, i put all of my 50p & £2 coins in it. I have small bank account with a book (no cards)
I saved £500 last year doing this.

I meal plan, make my shopping list according to this, i do not deviate.
I shop at Lidle/Aldi for fresh fruit & veg, home bargains for cleaning products and shampoo etc, i get the rest from Tesco. Spent £40-£50 per week.

I save Tesco club card points all year, saved £100 last year whcih paid for Christmas.

Sandwiches for lunch, never shop bought in fact i leave my purse at home so i cant be tempted.

I put £50 per month away from my wages.
Small steps.