The Motley Fool

3 savings tips that could help you save £250+ per month

Wouldn’t it be nice to have an extra £250 a month or more to put away for a rainy day? If you’re managing to save this every month, you could build a savings pot of £3,000 after just one year which, if invested sensibly in a tax-efficient wrapper like an ISA, could grow to be worth more than £10,000 over 20-30 years.

If you repeat this process every year, you could quickly build a sizeable savings pot with minimal effort. With this in mind, I’m going to outline my three tips that could help you save £250 a month, or more than £200,000 if you keep at it for 30 years. 

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Go shopping

My first savings tip is to double check all your existing subscriptions and bills. Ask yourself, do you still need that magazine subscription or can you get a better deal on your phone and energy contract elsewhere?

According to Moneysupermarket.com, the average customer can save £331 a year by switching their energy supplier, a saving of around £27.60 per month.

If you think shopping around and looking for better deals on all of your subscription and bills sounds like hard work, think of it this way. The national minimum wage for workers over the age of 25 is £8.21 per hour, implying the average monthly saving on offer by switching suppliers is equivalent to more than three hours of work at this rate.

Don’t outsource

My second tip is to avoid spending money on items such as takeaway coffee and lunch. In London, it’s quite easy to spend £10 a day on coffee and sandwiches (although if you go bargain hunting, you can spend a lot less) and, over time, these small expenditures really add up. For example, £10 a day on lunch works out at £50 a week, or £217 a month. 

Preparing your own lunch and buying instant coffee could significantly reduce this expenditure saving you what could be hundreds of pounds every month. 

Government help 

My third and final tip is to make the most of the cash bonus offered by the recently introduced Lifetime ISA. For every £1,000 you contribute to a LISA, the government adds a bonus of 25% up to a maximum of £1,000.

You can only contribute a maximum of £4,000 every year, but that’s still £1,000 in free cash. This means for every £200 you provide, the government will add an extra £50, giving you £250 a month in savings.

What’s next?

The best way to get the most out of your £250 monthly savings is to invest it, according to my calculations. By investing your money, you can seriously improve your returns compared to just leaving it in cash.

Today, potential investors have a range of different tools they can use to get exposure to equity markets all around the world. And if you are just starting, I recommend buying a low-cost bond fund to keep your money safe while you learn about the market. Some bond funds on the market today offer yields of up to 5%. 

If you want to take on a bit more risk in exchange for higher returns, you could invest your money in equities. 

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US $12.3 TRILLION out of thin air…

And if you click here, we’ll show you something that could be key to unlocking 5G’s full potential...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.