When you want to make the most of your income and make your money work for you, you need to get on top of your personal finances. However, this is easier said than done, and we all know a couple of those annoying people who always seem to be able to save thousands every year. So, how do they do it? Read on to find out…

Budget Monthly, and Stick to It

The monthly budget is not there to constrain your fun and make it impossible for you to go out and see your friends. It’s there so that you have plenty of options and flexibility going forward. It’s what enables you to have the freedom to make those big purchases such as a home and a nice car, and to go on holiday every year. If you think about it like this, then you’re already halfway there.

Drawing up your budget is really an iterative process in the sense that you’re not going to get it perfect the first time around. And you also need to factor in the fact that your expenses and living situation will vary from one year to the next. As long as you’re realistic and disciplined, you’ll be able to end up with money to save at the end of each month.

Speak with a Retirement Planning Professional

If you want to be able to retire with a comfortable nest egg, then it really does pay to speak to someone who knows that they’re talking about. You’ll have to pay for their expertise, but it will be more than made up for by a much better standard of living when you clock off for the final time.

Make it a priority to get it sorted out, and you’ll be able to approach your middle years safe in the knowledge that you’ve already got everything in order. There really is no substitute for making the most of the time you have at your disposal, because as you get towards the end of your working life, it won’t be on your side to the same extent.

Set a Monthly Savings Goal

Monthly savings goals are really just part of the monthly budget, but they’re so important we thought they warranted their own standalone section.

If you set yourself a target that you can quantify, you’ll find that you make much more effort to achieve it than with something qualitative. There’s plenty of psychology to back it up, and you’ll soon see that you’re starting to embrace the challenge of meeting it every month. Little changes in your mindset such as this are exactly what you need when you’re looking to build your savings over the long term.

Book Your Holidays Early to Save Money

One of the major expenses people have each year are their summer holidays. Now, whilst you don’t want to always be holidaying out of season to save money, you can book out of season. By this we mean book early, or even book last minute. Do whichever of the two will get you the best price.

It might not be the first thing you think of, but you still need a holiday and some time away from it all each year. If you cut it out altogether, then you’ll soon get stressed and burnt out. That’s no good for your personal finances, and it’s certainly no good for your health and enjoyment. Shop around for the right deal, and then get it booked before anyone else can snap it up.

Wait 7 Days Before Making an Impulsive Purchase

Impulse buys are fun, but the problem is that they can quickly become the norm. In the plastic economy where you rarely have to hand over physical money anymore, it’s even more of a problem. You realise how fun it is to get something you want with a quick swipe, and then you do it over and over again. Before you know it, you’ve spent your entire savings target for the month on stuff that you’ve grown tired of in a week. Have a 7-day cooling-off period, and you’ll be amazed at how often you can barely even remember last week’s must-have.

Keep Your Quarterly Outgoings in a Separate Account for Peace of Mind

Last but not least, it’s really important to split your money. Once you build up your savings, open a separate account where you can deposit enough money to get you through 3 months of no income. That way you’ll be able to sleep with the peace of mind that you’re protected against the need for high interest loans if you’re suddenly made redundant. And because it’s sat in a separate account, you won’t be tempted to pinch a bit here and there until you wake up one day and half of it’s gone.