3 Bookkeeping Tips to Help You Save Money

If you struggle to save money regularly, you’re not alone, as research in 2018 indicated around 10 million UK households had no savings. It’s very tempting to spend everything as soon as it comes in, and even to go over a bit on credit cards or loans. To get the best results when you’re trying to save, you need to know what your money is doing and figure out ways to control it.


Tip 1 - Monitor Your Spending


All you need to get going with this is a notebook. You can use a computer, of course, but a notebook can stay with you all the time in a pocket or handbag.


On a new page, make four columns (just draw three vertical lines down the page). Head these like this:


  • Date - this is the date you made the transaction.

  • Item - what you bought or what earned you money, for instance wages or salary.

  • Amount - how much you spent or earned.

  • Balance - subtract or add the sum in the ‘amount’ column.


You’ll need a bank statement or your banking app to get the ‘balance’ column started. Have a look at either, then write in that column your current bank balance.


You can start a new page as needed. Weekly or monthly works well for most people. For basic household expenses, you don’t need to do much more than this. It’s gets a little more complicated if you need to track business interests, or things like investments and stock or shares performances.


For those more demanding or challenging accounting needs, it’s well worth seeking professional accounting help. They can really dig into what’s happening with your finances and help you find ways to save money by streamlining your investments.


Tip 2 - Analyse Your Expenses


Once you’ve got a bit of a backlog of actual spending and earning figures, you’re ready to delve in and investigate what they can tell you. This is also a very simplified version of what an accountant can do with your financial affairs, especially if you run a business and need outsourced bookkeeping.


Look for spending patterns. By filling in the column for ‘Item’ you’ve created a list of spending categories. You can now find out exactly how much you’re spending in various areas of your life. How much do you spend on car fuel, entertainment, take-aways, groceries, mobile phone or Internet, or hobbies? There are dozens of others, including household utilities etc.


Having identified where money is going, you’re in a strong position to creatively find ways to cut corners. Maybe be a bit more frugal in the supermarket, shop around for better utility or insurance deals, and any other way you can think of to reduce spending.


The advantage of searching out ways to cut down on spending like this means you can start a savings plan without it causing too much pain. Nobody likes cutting out life’s little pleasures but they’re often the first things we decide to do without when we need to save a bit.


Tip 3 - Put Saved Money Aside


When you manage to squeeze a few pounds out of somewhere, stow it out of the way. Open a separate bank account just for savings, for instance. Online banks such as Monzo or Starling can be useful for this kind of thing, and it’s very easy to move money between accounts with a mobile app. Plus, being an ordinary bank account, you can access the money any time you need it.


If you can’t manage to save anything one month, let it go without feeling bad about it. Life gets in the way sometimes and things crop up to put a stop to plans. Just make sure you pick up the following month and carry on as if nothing happened.


Of course, if you can identify what caused the temporary blip in saving ability, you might be able to prevent it happening again. Some expenses are predictable, such as appliances needing repair or replacement, or car breakdowns.


Try and budget for these things in your savings, setting aside a small pot you can add to each month as a contingency against things going wrong.

As a final tip, be happy with small beginnings. It takes some willpower and discipline to start a savings habit if you’re more used to spending money as soon as you make it.


Even £10 a month will give you an extra £120 to spend at Christmas or while on holiday, and a bit extra is never a bad thing.