HOW TO START SAVING MONEY

I've been thinking about putting together a couple of money saving tips for a while, so here are a few of my favourite ways for putting ideas into action (rather than just spending less money). I don't want anyone to take these the wrong way - saving is hard! - but my motto has always been 'start small', so here we go...

1. What's important to you? Figuring out why you want to save money is the impetus to actually do it. I have two savings accounts - one is a tax-free ISA which I treat as a long term savings plan for...well who knows what, but I won't touch that one until I really need it. My other savings account is my 'extras fund': this one is for holidays and purchases that are out of the ordinary, like a winter coat or Christmas presents.

2. Save first. This is probably the number one tip that has helped me. I put money into my 'extras fund' and my ISA on payday. No excuses! Now it's a reflex to transfer money straight into my savings when I get paid: once the money is out of my current account, I treat it as if it doesn't exist anymore. If I want to meet a friend for lunch but I've run out of money, I won't go until I get paid again.

3. Be realistic. I try and put a certain amount into each account every month, but if I know that my friend is visiting and we'll be going out a few times or that I need some new clothes I'll put less into my savings. I'd rather be upfront with how much I can afford to save than be tempted to dip into it later in the month - sometimes I save £10. Sometimes it's nothing. Likewise, if I'm hoping to book a holiday soon, I'll up the amount and keep it safe in my 'extras fund' until I'm ready to spend it.

4. There's no such thing as 'too little'. Since I was old enough to take charge of my piggy bank and 20p pocket money, my dad has stressed the power of compound interest. Put simply, compound interest is the number one way that your money will grow if you put it into savings (without going into grownup things like stocks and shares). If you have £100 in a 1.5% interest account, next year you will have £101.5. Then, the 1.5% will be applied to the new total (as long as you keep it in the account) and year-on-year it will keep building. I know it doesn't sound like much, but over time it makes a big difference.

5. Start small. I read this clever tip in Glamour Magazine and thought it was a really good idea for the type of person who can live comfortably once their rent and bills have been paid for. If the thought of putting £50 into a savings pot at the start of the month is too much, but you're the type of person who buys a coffee every day or regularly takes taxis home instead of the bus, try this: set up a daily direct debit of £3 to go into your savings. The amount is small enough that you won't notice it, though you might need to cut out those coffees towards the end of the month, but you'll end up saving around £1080 by the end of a year and the direct debit means you don't have to think about it, it will just keep ticking over in the background.

I would love to know any of your tips, whether you're saving for a holiday or 'just because'.

{image is another one from Zoe's amazing Wise Words pinterest board}