The small habits that can bring big savings

Seven habits to build a savings pot

Building up a savings pot seems like a huge mountain to climb. How can you ever hope to put aside hundreds of pounds in an emergency fund if you are scraping together the pennies at the end of every month? However, starting a savings pot doesn't have to mean radical change, it can mean introducing small, sustainable habits, that will automatically save you money every week.

See also: Could you be saving more?

See also: Why an interest rate rise won't help dire savings rates

If you implement these seven habits, you'll be sitting on a nest egg in no time - without ever feeling you had to work for it.

1. Make a 30 day list for things you want
If you're an impulse buyer, then you don't have to give up shopping, just create a 30 day list, and when you have an impulse to buy something, put it on the list - next to that day's date. You're not allowed to buy the item for 30 days - by which point you can decide whether it's still really important to you or not.

2. Implement shopping blackouts
We all have spending triggers that have nothing to do with actually needing to buy specific things. We need to recognise them, and implement shopping blackouts - avoiding shopping when they are triggered. If, for example, you tend to reward yourself after work on a Friday, buy a sweet treat at 3pm every day, or go shopping when you're bored on a Saturday afternoon, then make a rule that at these key times you need to do something else - you're not allowed to shop.

3. Have a 'one in-one out' rule
Nobody needs more stuff, so if you want to buy something, then you need to think about the item you'll be getting rid of (ideally selling) to make way for it. This will force you to evaluate each purchase more carefully - and if you're selling the item on, you can recoup some of the cost too.

4. Spend in cash
This can help in two ways. You can set yourself a daily or weekly budget, and only withdraw the cash you have for that week - which will help stop you over-spending. Even if you find yourself overspending, you'll be surprised of the impact of just handing over the money instead of tapping your card: it feels more painful to spend money this way, and will help you cut back without trying.

5. Stick a picture of your goal on your wallet
Every time you spend, you'll see a photo of the holiday you're saving for, the wedding, or the car. You'll subconsciously start weighing up the purchase against the goal, and may put yourself off the spending that's not doing you any favours.

6. Make a list
You'll need to be realistic about the role lists play in your life. In the best case scenario you can develop the best habits - where you plan the meals for the week, check what you have at home, make a list of the items you need, and then only buy those items. At the other end of the spectrum, when you're dashing to the supermarket for the fourth time in a week, make a list - even if it just says 'milk' - and don't let yourself buy anything that's not on the list.

7. Spare 2 hours a week to cook
Cooking from scratch for every meal, and bringing your own lunch to work, can save a fortune, but not everyone has space for it in their lives. If you're struggling, then set aside 2 hours a week to cook up a huge batch of something, then freeze it in lunch and dinner portions. That way, any time you can't be bothered to make a packed lunch or home-cooked dinner, you'll have something homemade and cheap waiting in the freezer.

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Eight celebrities who hate saving

“I am a spender,” the former Formula 1 team owner Eddie Jordon told The Telegraph. “I've always been like that. Have I got worse as I've got older? Probably, though I'd like to think I'm not irresponsible, but if there's something I see and want, then I'll get it. My mum has a great expression: "There's no hem in that garment." What she meant was that you can't put money in the hem of the garment as it was the place that little old Irish ladies would hide their money. Whatever money I've made, I want to use, while not dying in a poor house. I don't want to leave money littering the place when I go, where people have rows with each other.”

Advice from Jo Gornitzki, a spokesperson for MoneySavingExpert.com:

“Eddie is right when he says that leaving cash behind when you pop your clogs can cause family feuds - but only if you don't plan who you want to leave your money too. A bit of forward thinking - gifting money away before you die and drawing up a solid will - and the former motor racing boss can make sure his wife and kids won't come last in the money race.”

“I’m definitely a spender,” the footballer Robbie Savage told The Telegraph recently. “For me if I’ve got it, I spend it. If I’m broke in five years, I’ll have had a great time. It’s the most difficult lesson I’ve had to learn about money: you can’t take it with you. I like spending on cars, clothes, food and wine – the nice things in life. Even though I’m a spender, I’m also a grafter and I work exceptionally hard to keep it coming in. I’ve had people have a go at me for this, but I’ve had some unforgettable experiences because of my work ethic.

Advice from Kirsty MacDonald, spokesperson for accountancy practice Jackson Stephen LLP:

“There is no doubt that Robbie is one of the hardest working sports professionals in the UK. He is rarely out of the media spotlight what with his punditry work, newspaper columns and lycra clad manoeuvres following his SCD appearances. But relying on always being able to work to maintain a lifestyle is dangerous. Robbie should know that it only takes one false move in the media and he may never work again. Such a risky strategy should be balanced with a contingency plan to cover some income for a period of time in the event of catastrophe.”

“I’m a definitely a spender,” the former Status Quo guitarist Rick Parfitt told The Telegraph in January. “ I’ve never been one to save. I live for the moment and I’m fairly extravagant when it comes to people around me. In the past, I could not resist buying cars. I had a stable full of them – American cars, sport cars, limousines, everything. I spent hundreds of thousands on them. I had about eight or nine at any one time. The cars were just strewn all over the drive. I’d come out every morning, look at the weather and think, what car should I drive today?

Advice from Jasmine Birtles, founder of moneymagpie.com:

“Rick and other ageing rockers wouldn’t need to keep touring if they cut back on their spending and put the money instead into solid investments that grow over time and give them a regular income. It’s nice to be in a position to spend on the things you love but it’s a bit pointless spending so much that you have to keep working just to feed your spending habit. I always tell people to think about what they love and spend on that but save on things that don’t matter so much so that you can put money into savings and investments to work for you.”

“I am an unashamed spender,” former Blue Peter presenter Janet Ellis told The Telegraph. “I love shopping and I love the idea of a bargain and will shop online or in stores. We have a good lifestyle and don’t deprive ourselves of good holidays. I have in the past maxed out on credit cards and store cards, which I wouldn’t advise anyone doing. It was fun at the time, but in terms of how much you have to repay, it is ludicrous how much they charge.”

Advice from Jo Gornitzki, a spokesperson for MoneySavingExpert.com:

“As any girl knows there's nothing better than a bit of retail therapy every now and then. But the former Blue Peter presenter should be wary of maxing out on her cards. Credit cards are great - used in the right way. Used wrongly and they can end up costing you a fortune and in a mess that sticky back plastic just can't fix.”

“I’m definitely a spender, although I’m not an impulsive spender,” the James Bond actor Roger Moore revealed to The Sunday Times. “If I go shopping, I usually know what I want before I go out. I’m not a very good saver because the lessons my father tried to instil in me about taking care of money had the opposite effect. I carry cash in my pocket as I always like to have it to hand, which means it also disappears easily as I spend it more quickly.”

Advice from Kirsty MacDonald, spokesperson for accountancy practice Jackson Stephen LLP:

“As James Bond, Roger Moore became iconic as a smooth operator. But there is nothing smooth about the way he is handling his cash here. There seems to be no control over it at all. Whilst it’s hard to be sympathetic with multimillionaire film stars, Roger’s cash leakages are probably losing him a lot more than he realises.“

“I've got some savings for a rainy day, but I don't bother looking to see if I might get a better interest rate elsewhere,” the comedian Justin Lee Collins revealed in an interview with The Telegraph. “I don't have the time or the inclination to shop around at the moment.”

Advice from Jasmine Birtles, founder of moneymagpie.com:

“The sad thing is that Justin is at an age where even relatively small amounts of money put into a good investment like stocks and shares will grow into something really impressive in later life. The younger you are, the more time your investments have to grow and so the bigger they will be when you retire.

“The earning-power of a comedian can be volatile so it’s helpful to have a serious cash cushion to dip into in the bad times and help invest in your career to push it one when it seems to be faltering. It’s true that shopping around for a better savings rate right now can seem pointless but if you’re willing to tie your money up for a few years there are some good deals to be had, particularly in the peer-to-peer companies like Zopa, Ratesetter and Funding Circle. You can get, on average, between 4.5 and 5.5% with those at the moment, which is significantly better than ordinary savings accounts.”

“I’m definitely a spender,” the international playboy Howard Marks recently told The Telegraph. “When I was growing up I wondered what it would be like to win the pools. The prize money was something like £75,000. Later I had much more than that, with cardboard boxes of cash under my bed. I was very, very flash with my spending. I would fly first class, stay in five-star hotels, buy fast cars, big cars. I don't regret investing more wisely - I enjoyed it all.

Advice from Jo Gornitzki, a spokesperson for MoneySavingExpert.com:

“While I don't blame Howard for splashing his cash, the former drug smuggler and author should make sure his fortune won't go up in smoke. Yes, you should enjoy your money, but also make sure you have enough to last in old age.”

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