It sounds like 2015’s latest fad, but the 50/20/30 rule is actually a handy way of knowing how much cash you ought to be allocating to different pots each month. I know, rules like this aren’t helpful on those days when you’d prefer to simply live in the dark and spend money on pizza and wine, but trust us on this one.
The rule goes that of your take home salary, 50% should be allocated to fixed expenditure; that’s your rent, bills, food, travel costs and anything else you’d go hungry or homeless without (no, your Netflix account doesn’t count).
The next 20% is where the grown up stuff comes in – it’s money to put aside to secure yourself, financially, over the coming years. That means paying off credit card debt, starting a savings account and paying into a pension.
The final the 30% is the good bit. It’s everything else you want to spend your money on including meals out, beers, cinema tickets and so on. Of course, if you really wanted to be an A* student you don’t have to spend the entire amount on luxuries, but what fun would that be?
If you’ve taken a few minutes to consider how your salary fits into the 50/20/30 principle, you’ve probably just realised that you’re spending too much on rent, not putting anything aside for a rainy day, haven’t even thought about paying into a pension and are spending money faster than it’s coming in the rest of the time. All is not lost – a bit of time spent assessing what you’re spending on bills each month and a few minutes of admin could save you hundreds of pounds a year.
Go comparison site crazy
We know the ads drive you mad, but there’s a reason these sites exist. Gather up recent bills you’ve had from all your energy, insurance and entertainment providers and start switching. Living in a shared house can make this seem like a lot of effort (especially if you’re the ‘lazy freeloader’, not the ‘uptight parent’ of the house) but you’re almost guaranteed to save by taking the time to reassess who you’re paying for utilities.
Sign up to cashback sites
For those occasions when comparison sites don’t offer up the goods, look to cashback websites. Sites like Quidco are free to join and partner with major retailers to bring you discounts or cashback when you shop through them.
Set up Direct Debit payments
Sure it can be a bit more hassle if you’re in a house share (at least shared living means cheaper living costs), but signing up to regular Direct Debit payments for your utility bills can mean discounts. It’s unlikely they’ll be massive, but a saving is a saving and, by paying regularly, you’re less likely to be hit with a big bill at the end of the year.
Check out your company benefits
It’s an easy one to overlook, but depending on the size of your company you may find you could save money on travel expenses (through a season ticket loan or bike loan) or on gym membership (or quit the gym altogether and try these healthy options).
Flatmates who eat together, save together
Cooking a few big meals throughout the week with your housemates rather than cooking separately can save loads on your food bill. If you’re not keen on the idea – start slowly (how about making pancakes – easy and cheap!). Try it once a week and see how you get on. You may find you have more fun, eat better, save cash and get to split the washing up. Who can argue with that?