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For many, the events of 2020 have provided a different viewpoint on day-to-day life. Aside from having to change routines such as working from home and not being able to go to the pub, it has forced people to alter their spending habits.

Redundancies, furlough, and other restrictions have all played their part in causing plenty to re-evaluate their finances. Yet even if people are earning a wage as normal, they can be placed into 'forced spending'. This means they cannot splash the cash as they normally would, resulting in them saving money during the current pandemic.

This is not a solution for most, however. So how do you start to save money in 2021? Whether you aim to put together a deposit for a new home or build up an emergency fund for a rainy day, we have put together a few tips that can help you achieve your financial goals for the year and beyond.


Refine your budget analysis

Do you currently keep track of your incomings and outgoings with a manual budget? While this is a good start, you should put down the pen and paper and utilise specialist budget software.

Not only does this help to save time and eliminate the possibility of human error, but the powerful analysis this software provides can open the door to potential savings. For that added convenience, there are various budget apps available. This means all you need to do is whip out your phone to see your budget's latest status.

Finance software functions by putting together your bank accounts, income and expenditure, credit cards, and investments all in one place. Whenever there are any changes to these elements, they are automatically updated to give you the full picture of your budget.
Plus, if you choose a high-quality software package, you can gain useful insights like when a subscription service goes up in price or if certain recurring bills can be found cheaper with an alternative provider.

Don't throw away your change

When you have a few coins kicking about in your pocket, it can be all too easy to waste this on everything from a fruit machine to a Starbucks Frappuccino.

Instead of throwing away your change in a frivolous manner, it could be the start of putting together a substantial savings pot. Throwing £10 or so into a piggy bank each week might not sound like much, but it can quickly add up. Within a year, you could build up £500 - and this is just from that spare change you had no plan for previously.

What if you do not use physical cash anymore in your day-to-day life? You may feel this point does not relate to your situation, but do not be too hasty. A growing number of banks - including Revolut, Monzo, and Starling - present the opportunity for customers to round-up their purchases. Say you buy a sandwich for £2.50. Your bank can then round this up to the nearest pound, placing the £0.50 into a separate savings pot.

Prep your meals

Buying meals and drinks from restaurants, cafés, takeaways, etc., is a quick way to eat into your budget - pun intended. For example, say you spend £5 each weekday for your lunch while you are at work. That is £25 a week for a start. Now add-in a takeaway each week, which would be around another £25 for two people. If you also go with a restaurant visit during that period, you could be splashing out about £100 each week - or over £5,000 a year!

Even though this is an extreme example, it is certainly not too far off from the norm for those who eat out.

Now imagine coming close to eliminating this expense in full. This can be done by simply prepping and cooking your own meals. You can make your weekly grocery shop go further with careful planning, reduce waste, and batch cook meals to spread out across the week.
Of course, you do not have to sacrifice all of your current dining routines as part of your 2021 saving adventure. Yet even if you just cut out a daily visit to Starbucks, this could save you over £1,000 annually.

Obtain another credit card

Now we know what you are thinking - why would I want to sign up for another credit card when I'm trying to save money? However, there are a couple of reasons:

First of all, consider the scenario where you have debt on your current credit card. Right now, you might be paying a high level of interest on this debt, which is going to take you longer to clear your credit card. If you were eligible for a new interest-free credit card, however, and could transfer your balance over, you have the chance to eliminate that costly interest within an instant.

Secondly, a second credit card can help you to get something back when making purchases. At least this is the case if you use a credit card that features cashback or rewards points. Regarding the latter point, you can trade-in your points for everything from gift cards to air miles. When buying with a credit card, remember always pay off your balance in full each month.

Consider your transport

Is it possible you are not maximising your expenditure when it comes to transport? Whether you drive your own car or use public transport, there are methods to cut down on the amount of money you spend.

If you drive a car, you can start by shopping around for car insurance cheaper than your current provider. Along with finding the best-priced fuel available, there are also steps to take to ensure your tank of fuel goes further than ever. These steps include:

  • Avoid driving too fast
  • Avoid over-revving the engine
  • Avoid using the air conditioning
  • Have the right pressure for your tyres
  • Avoid keeping heavy items in the boot
  • Get the car serviced as soon as it is due

When you depend on trains or buses to get around, skip purchasing individual tickets each time. You should fork out for an annual card if possible. Yes, this is more expensive initially, but you will save money over time - particularly if you go the same route for work each day. Also, invest a small fee (£30) for an annual railcard. This can save you up to a third off the large majority of rail fares. If possible, you may even decide to cycle to work and avoid any costs beyond buying the bike and completing any potential repairs.
Plus, even though it isn't as convenient, would it be cheaper to sell your car and use public transport? However, there are various points to consider before you decide to go through with this change. For instance, you would lose the possibility of acquiring a logbook loan if you required funding for a financial emergency.

Unlock your phone

How much are you spending on your monthly smartphone bill? £30? £40? More? Well, according to statistics, the average phone bill sits at £45.60 per month. That is almost £550 each year. As you would expect, a bill this high is one that can be avoided entirely - and no, you do not have to give up on using a phone altogether.

The perfect time to change up your mobile phone situation is when your contract is coming to an end. You can unlock your phone at this stage - most providers will supply this service free of charge - and use a Sim card with any network you want. This means you can search around for a Sim-only deal that features the best combination of service and price.

A Sim-only contract can be as cheap as just a few pounds per month. Plus, with an unlocked phone, you have the added perk of being able to utilise local Sim cards when abroad. This can save you a significant amount in roaming fees.

Indeed, you will likely be tempted by the latest smartphones on the market, but by sticking with your current phone for a year or two longer, you could save hundreds each year.

Shop around for the best deals

Even if you are trying to be as frugal as possible, you will still need to purchase certain items every now and again. This could be to replace an appliance, buy a birthday gift, or you may want to enjoy a small treat.

When making a purchase, however, never settle on the first price you see. It is important to shop around to find the best deal possible. You might be surprised at the price difference between one retailer and another in that regard.
In addition, make sure you factor in the possibility of discount codes. Most major online retailers have some sort of discount code flying around at any one time. This could be everything from free delivery to 30% off an order. Even just a few pounds off a purchase can make a big difference.