Secret to happiness is 'saving £50 a month'

John Hay John Hay has been trying to find a variety of ways to save money

New research suggests that the secret to happiness is simple - save an extra £50 each month.

A survey of almost 2,500 people by NS&I found that savings success has a direct impact on individual's mood and state of mind.

With more than half of the UK unhappy with their savings and a third worrying about their finances, how you can be realistic with how much you squirrel away every month even if you're on a tight budget?

John Hay retired in June but even though he's on a company pension he's lost two-thirds of his income.

Realising the lifestyle he used to have had come to an end, he came up with a number of strategies to ensure that he's able to put money aside each month for a rainy day - from getting a more fuel efficient car to keeping his own chickens so he saves money on his breakfast.

Start Quote

Small amounts really make all the difference”

End Quote Gareth Headon NS&I

"It takes a lot of getting used to, I must admit," he says. "Now I've got this mobile I'm thinking about getting rid of the landline because we really don't need two phones.

"Two hours in the morning, two or three hours in the evening we have the heating on. The rest of the time we move quicker or we wear a sweater."

Of course, living on a tight budget can take its toll. When he was in work, he and his wife used to enjoy holidays abroad. Now he says they can't afford them.

"A treat for me is going down to the Oxfam and finding somebody has put in a whole set of pencils and paints so that I can buy them for a few pounds," Mr Hay says. "That's my hobby taken care of."

Skip coffee

His money-saving strategy might sound extreme but it's often the simplest changes that can make a big difference.

About two-fifths of Britons collect loose change. If you want to save £50 - the amount NS&I says will make you happier - it'll take just £1.66 a day. That can be as simple as not getting a coffee from a High Street chain.

"We find by making some small changes in your lifestyle you can help put a little bit to one side each month," says Gareth Headon of NS&I. "Crucially, it can help you get into a sense of behaviour and it will help make a difference."

For Jane Simons, of the Money Advice Service, saving money is about making a conscious choice to get a grip on your finances.

She recommends drawing up a realistic budget and then looking for ways to shave off just a small amount to save here and there.

"Do whatever you can to pay down debt," she says. "The next thing is savings, so we would say have some ready money available immediately, just in case."

For her, those extra pennies can be found by bulk buying and taking advantage of supermarket voucher schemes.

"Small amounts really make all the difference," agrees Mr Headon. "Look to see if you can cycle or walk to work instead of other types of transport."

For those looking to save up for a holiday, or perhaps even a house or a car, the pennies soon add up.

And like retiree John Hay, those changes can also help ease your transition and make you happier, should your income suffer a stumble.


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  • rate this

    Comment number 211.

    Interesting how the wealthy are always keen to point out that money doesn't bring you happiness. Perhaps not, judging by the levels to which you lot behave. At least if money were spread out more evenly, those at the bottom of society wouldn't be forced into choosing between winter heating and dental treatments

  • rate this

    Comment number 210.

    207.sandrae Sorry but I don't get people who provide for themselves then whinge about it when they actually have to use that provision! Benefits are for those in need not a bonus for clever savers. It kind of stinks, but get real!

    The disregard for JSA is £6000 & they only refuse to pay after £16000 - you're hardly on the breadline if you have that & once you get to £6k you'll get full rate.

  • rate this

    Comment number 209.

    Here are some ideas:

    Keep a salary float of a minimum months salary in your current account. You'll NEVER need a loan shark.

    Drive slower - 50 mph. Less journeys. Ask a technical friends advice to ensure garages do not rip you off for repair bills.

    NEVER pay parking to shop or work.

    Not more than £2.00 for coffee.

    Get rid of the TV. Do odd jobs. Earn money instead even for a small fee.

  • rate this

    Comment number 208.

    @204 Pleb Yorkshiremum @205 gives a GOOD example: never carry debt that charges more interest than you can make in savings, BUT make a systematic method of paying it off that you can translate to good money management in future.

    Clothes depreciate even more than cars, buying good 2nd hand is a better tactic, but stocking up on coats or other clothes is a lousy investment long-term.

  • rate this

    Comment number 207.

    Having done all that and managed to save a nest egg for our old age we are now being forced to use this to live on as we have too much in savings to qualify for any state help (I am retired and my husband is long term unemployed). The savings won't last long and we worry all the time about what will happen when they are gone and we need them in an emergency. Perhaps we were the foolish ones.

  • rate this

    Comment number 206.

    We as a Country UK are £1.3+ Trillion in debt.

    Ain't that a cheery thought.

  • rate this

    Comment number 205.

    A few years ago I was getting real interest [actual money] with my savings and it was worth saving for savings sake. Now I just put money on one side to cover bills. I have, however, paid my mortgage off and all debt off and that is a form of saving as I'm not paying interest. I am happy, not because I've savings, but because I've no debt.

  • rate this

    Comment number 204.

    @169 Pleb - Yes but let's be honest, how many people spend all their money now on things they'll need further down the line that will keep their value?

    losing external value doesn't matter provided they retain their value to you, a coat may lose external value but if you keep it & wear it when your current one wears out then it saves you the price increase since purchase regardless

  • rate this

    Comment number 203.

    201. Higgs bosun

    ' increase interest rates from 0.5% back to 5.0%. '


    Spanish and Italian bonds are an option.

  • rate this

    Comment number 202.

    200. Patrick_
    I'd like to challenge anyone intelligent reading this to go & learn about compound interest, and the rule of 72.

    I understand the above, however when the cost of living exceeds the saving interest this compound works in reverse, the loss is accumulative.
    3 years ago I spent my savings on what I needed in the future due to the fact it was more economical to do so due to inflation.

  • Comment number 201.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 200.

    I'd like to challenge anyone intelligent reading this to go & learn about compound interest, and the rule of 72, and to seriously analyse who actually suffers if a person doesn't save money, even if it's 5% of their pension or whatever. A lot of what's been said on here is wild inaccuracies touted as facts, but regardless of politics, the ONLY person who loses out from bad money skills is YOU!

  • rate this

    Comment number 199.

    Quite a lot of folk on here saying money doesn't make you happy, this may be true, but no money certainly makes people VERY unhappy, when the choice is heating or food, saving is not an option. It's easy to say money doesn't make you happy when you actually have any.

  • rate this

    Comment number 198.

    Not sure where you get having £16k in savings will cut off your Universal Credit. That was always the case. I lost my job and was only entitled to JSA contrubtion based i.e 72 a week for 6 months because i had more than 16k. No free prescriptions, no reduction in council tax etc. Sounds the same principal.

  • rate this

    Comment number 197.

    The secret of happiness in saving is the anticipation of a decent return when you retire.

    This is spoiled somewhat when banks batten down the hatches, reduce interest rates by 95% and keep all their promised bonuses to themselves.

  • rate this

    Comment number 196.

    @191 Michael

    No, savings do not disqualify you from benefits, different figures apply but usually under £6000 means you're eligible for JSA, ESA & housing benefit at least. My ex used to work on the frontline allocating benefits and those of you who think claimants are living it up need to take a walk down Real Street... but that's another topic!

    Anyway another excuse shot down by reality!

  • rate this

    Comment number 195.

    Clear debt. Establish a pension pot (the percentage should be the same as the age when you start it - maintain that). Use a weekly cash amount for food, and for each shop. Buy at local greengrocers, they have limited choice, so you spend less. Toast and marmite, is cheaper than fancy crisps.

  • rate this

    Comment number 194.

    It would be nice if we all had £50 a month to save. Thats not possible for all to do, and extremely unlikely that it will change under this sham of a government How do you save if you don't have enough to pay bills buy food. and all other expences. Some dont choose their lifestyle , some work very hard, and still can't make ends meet. But the rich will have more money to save. Lucky them.

  • rate this

    Comment number 193.

    How sad have we got if this puts a smile on our faces?

    What would put a bigger smile on them would be if we could find just one politician in this country who would make it worthwhile saving anything!!

    If we didnt have to pay tax fior wasting on them we'd all be far better off.

  • rate this

    Comment number 192.

    I'm a saver, and yeah, it pleases me to know that my utilily bills are about half the national average.

    But hang on - I'm one of those sad things on benefits - one of the sponging scroungers as we've been painted. Under Universal Credit I'll soon have to start living on what should have been my pension coz if you've got 16K you're cut off. Job? I'm a carer.


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