Money Saving Challenge - Can You Save £250 Each Month?

Money Saving Challenge Every year, people waste £1,000s of their hard-earned income by not managing their money and making ill-informed purchases, but with a few simple steps it is possible to make significant savings.

The Money Saving Challenge is an easy step-by-step approach to help you cut back on your spending and grow your wealth.

The aim of the challenge is to squeeze £250 of savings from your monthly spend (that’s £3,000 a year!), simply by reducing the cost of necessary expenses and reducing unnecessary spending. Money Saving Challenge
Just think what you could do with an extra £3,000 per year?

Pay off your credit card
Save a deposit for a new home
Pay off your mortgage quicker
Contribute the savings towards your dream wedding, holiday, car……

So are you ready to take the Money Saving Challenge?

The Money Saving Challenge Overview

The challenge takes place over a four week period, with various tasks to complete each week.

Here is a high-level overview, to show how the challenge works:

Week 1

1 – Understand how people waste so much money, without even realising it

2 – Download the Money Saving Challenge pack

3 – Create a budget

4 – Begin tracking your daily spending

(click here to jump to Week 1)

Week 2

1 – Continue tracking your spending and update your budget with any additional items of spend

2 – Using your budget, identify and implement two money saving ideas

3 – Make a note in your budget of the savings you have achieved so far

(click here to jump to Week 2)

Week 3

1 – Continue tracking your spending and tweak your budget if necessary

2 – Identify and implement two more money saving ideas

3 – Update your budget with the additional savings you have achieved

(click here to jump to Week 3)

Week 4

1 – Again, continue tracking spend, tweaking your budget, look for two more money saving ideas and note your savings

2 – Set up a savings account (or make use of an existing account) and transfer the savings you have made into that account.

3 – Arrange for the sum you saved to be moved to your savings account at the start of every month, so that you don’t get tempted to spend it.

(click here to jump to Week 4)

Remember, if you are able to consistently meet the target of £250 savings each month, then in one year’s time you will have accumulated £3,000 in your bank account!

Full Details Of The Challenge

Week 1

Understand how people waste so much money each year

Read the guide – Am I Really Wasting £1,000s Each Year? – to get a better picture of the ways in which we unnecessarily waste money.

Download the Money Saving Challenge pack

Budget Click here to download the pack, containing a budget template and spending log.

Create a budget

Your budget is the silver bullet that will enable you to achieve the savings goal. Using your budget you will be able to:

Understand what you earn each month
Clearly see what you spend each month
Determine whether your monthly spend is greater than what you earn, and if so, by how much
Calculate your total savings and your total debts
Identify ways to cut back on your essential and non-essential spend

The budget template in the downloadable pack is based on the one that I use to manage my money and is really simple & straightforward to complete, but you can just as easily create your own budget to suit your needs.

Whichever option you take, the How To Create A Budget guide will help.

Begin tracking your daily spending

Savings Log To create your budget, you will need to know where you spend your money and whilst you can get most of that information from your bank statements and online banking, it is also really useful to keep a record of your daily spending on small items and incidentals.

Most people will be surprised by the amount they spend each day on little purchases and this can be a useful place to begin making some good savings.

To keep a track of your daily spend, there is printable spending log in the downloadable pack, or you can just buy a small notepad to carry around with you and note each purchase.

As you continue to track your daily spending over the four-week challenge, you can update your budget with your expenditure, ensuring you have a very realistic picture of all your outgoings.

Week 2

During Week 2 continue tracking you daily spend and at the end of the week, update your budget with any additional information.

Identify and implement two money saving ideas

The main task for this week is to review your budget and identify and implement two money saving ideas.

To ensure you achieve maximum savings, focus on your two most expensive outgoings. These might be your mortgage and your weekly shopping bill for example.

Now think about how you could reduce these costs:

Could you re-mortgage and get a cheaper rate
Maybe you could use some of your savings to reduce the size of your mortgage

To reduce your shopping bill, you could try buying own-brand products or simply cut down on wasted food by being more organised with your shopping list.

These examples may not be relevant to everyone, but they are just two of the many ways that people can reduce their costs and save money. To help you think of more ways to save, click on to this page of money saving ideas.

Don’t bite off more than you can chew

I recommend that you limit the number of money saving ideas that you try to implement each week, as this will prevent you from being overwhelmed with too many tasks.

Changing your mortgage for example, is a relatively big task and you don’t want to be trying to change your broadband, gas & electricity suppliers all at the same time as this.

Successful task management is simply a case of prioritising your tasks, taking the highest priority, achieving it and then moving onto the next highest priority.

Note your savings

At the end of the week, make a note of the savings that you have been able to make and see how far away you are from the £250 target.

It is important to keep noting your savings throughout the remaining weeks of the challenge, for one of the final tasks, which I will discuss in Week 4.

Week 3

For Week 3 continue to track your spending and tweak your budget with any updates.

Using your budget, identify two more money saving ideas to implement. These can either be from your essential outgoings (such as rent, bills, travel costs, etc) or they could be from your non-essential spending (socialising, buying new clothes, music, gadgets, etc).

Shopaholics spending £100 a week on new clothes and shoes, could easily slash their outgoings to meet and exceed the £250 target, and still be able to continue buying new things that they like – just a bit more selectively.

And on this note, be careful not to go on a money saving crash diet!

Have you ever noticed how people who go onto extreme diets in order to quickly lose weight, always seem to end up putting the weight back on afterwards?

The real weight-loss winners are those who adjust their diets for the long-term, making sure they eat the right sort of healthy and sustainable food, balanced with the occasional treat.

The same goes for saving. Yes it is possible to purge all of your non-essential spending and deny yourself any fun – but how long will that last for?

A better approach is to be in control of your money – be sensible with it, but also allow yourself to have some fun too.

Update your budget

At the end of the week, update your budget with the savings that you have made to see how far from the £250 target you are.

Week 4

This is the final week of the challenge. As beforehand, continue tracking your daily spend and updating your budget.

Look for two further money saving ideas to implement to help ensure you meet or exceed the £250 target.

Total savings from the challenge

At the end of the week, add your new savings to your budget and tot up the total amount of savings that you achieved throughout the challenge.

Depending on factors such as income and existing financial discipline, some people may not have fully reached the target and some people will have exceeded it. The important thing is that by taking the challenge, you are now in control of your finances and have begun saving money.

Set up a savings account

Get in contact with your bank or building society to set up a savings account or a tax-free ISA, and transfer the money you have saved into it.

Next, set up a ‘standing order’ for that same sum of money to be automatically transferred from your current account to your savings account at the start of each month. This will ensure that the money is safely saved, before you have a chance to spend it elsewhere.

If for example you were able to save £250 a month (automatically transferred into your savings account and left untouched), this time next year you would be £3,000 better off!

Life After The Challenge

Once you have taken on and succeeded with the Money Saving Challenge, the big question is what do you do next?

First of all, don’t lose the good financial habits that you have developed during the challenge. You may not want to worry about keeping a daily spending log (unless like me you need to re-introduce it every now and again if your spending is getting out of control!), but I strongly advise that you continue using your budget.

The fact is that people who plan and control their finances are better off than those who don’t and a budget is the key tool for doing this.

I am in the habit of using my budget to review my finances 2 or 3 times a month. It takes less than half an hour each time and ensures that my spending is in control and that I am meeting my saving goals.

Keep finding and implementing money saving ideas

Don’t stop looking for new ways to save money. Bookmark the money saving ideas page and get my free money saving tips emailed directly to your inbox.

Set yourself a new financial goal

Goal setting is a really powerful way of getting things done. During the challenge, your goal was to find and implement £250 worth of money saving ideas. Each week you undertook different activities to reach that goal and you tracked your progress.

The same can be done for other goals, such as paying off all your debts and becoming debt-free or saving up a deposit for a new home.

There may be a number of financial goals that you want to achieve, but I’ve always found it more effective to prioritise my goals and focus on achieving them one-by-one, in order of importance, rather than trying to scatter-gun my resources across too many activities.

Earning more money and growing your wealth

You may have heard of the term ‘financial freedom’. This can mean various things to different people, but my interpretation of being financially free is that I am able to live a very comfortable lifestyle, able to do and see all the things that I want; safe in the knowledge that I don’t have any debts or mortgages to worry about, and that I have enough money in the bank to see me through.

Achieving financial freedom is something that people tend to do at a later stage of their lives and they achieve this by working hard to earn more money and saving & investing to build their wealth.

The journey towards financial freedom involves taking control of your finances, becoming debt-free and then looking for ways to earn more money and grow your wealth.

Using the Money Saving Challenge to take control of your finances is an excellent first step and here are some really useful links to help you take the next steps:

Clear Your Debts

Earn More Money

Grow Your Wealth

Take The Challenge