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1. Set a budget

Spending a little bit of time upfront working out your current situation and choosing specific areas where you can save money could save you hundreds of pounds in the long run.

Consider keeping a household budget, which can help give you peace of mind about your spending and enable you to spot areas where you could make savings. The Money & Pensions Service Link opens in a new window has a handy budget planner to help you identify what you have coming in and going out each month. It gives you a detailed spending breakdown, showing you where your money goes and suggesting next steps tailored to your results.

2. Spend less money

Little expenses can quickly add up – that daily £2 flat white, for example, could cost you over £700 a year. But there is a flip side: by making a small change in behaviour, you’ll be able to save that money. And little amounts, saved frequently, quickly add up.

Even with essential purchases there are ways to get a better deal, so be sure to follow our tips and get into good financial habits:

Top tip: Gas, electricity, broadband, mobile phone and water take up a large chunk of most household budgets. But there are plenty of opportunities to easily save money on utility and other household costs. The money you save could be put towards something more exciting, like a family holiday.

3. Manage debts

If you’re concerned about paying back money you owe, don’t bury your head in the sand – instead, take control of your debts and put a plan in place.

4. Set a savings goal

You don’t need to ‘save big’ or give up the things you love in order to make saving worthwhile. Getting into the savings habit is much easier than you think, and a savings goal is a great way to focus on longer-term financial ambitions – people who set one typically save £500 a year more than those who don’t.

Here are our top tips on getting started with saving:

Top tip: You could even set up a standing order each month, with the money being withdrawn just after pay day so you’re not tempted to spend it later in the month.

5. Encourage children to save

It’s never too early to start saving – research shows financial habits are learned from as young as seven years old.

Teaching your kids about money is one of the most important lessons you can give them, and there are lots of ways you can get your kids involved in learning about money Link opens in a new window and being money-confident.

6. Think about retirement

With the maximum basic State Pension being far less than the amount most people say they hope to retire on, it’s easy to see why experts recommend you save into a pension Link opens in a new window from a young age. And many people get into the habit of making monthly contributions to their pension, seeing their pension pot steadily increasing in value over time.

Pensions are a tax-efficient way to save because the Government tops up your contributions with tax relief – and with a workplace pension your employer will pay into the scheme too. Effectively this means your savings are likely to grow more rapidly.

7. Invest for the future

Once you’ve got any debts under control and begun to save regularly, you could consider whether investing Link opens in a new window could be right for you. Investing is when you buy an asset, such as a bond, a share in a company or units in a fund such as a unit trust, with the expectation that it will increase in value in the future and generate income through dividends.

Historically, investments have outperformed cash savings, which can have their value eroded over time by inflation – although of course the past is not a guide to the future and with investments you may get back less than you invest.

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