With so many people looking to save money, TikTok has become a huge resource for budgeting and spending suggestions – with over 500 million users on the platform, across every generation. However, while some tips and trends can be effective, others could be deemed nearly unachievable, which could put a stop to the saving journey before it even begins. Experts at Craft have delved into the top TikTok money-saving trends right now to see which ones could be worth following.
Craft’s Jenny Herbison commented: “With its easy-to-use short-form video format and addictively entertaining content, it’s no surprise TikTok has become a hot spot for discussions around a variety of topics, including personal finance.
“But with so many influencers creating bite-sized videos with money-saving advice, it can be tricky to discern what challenges and tips really work. Therefore, it’s important to do your own research and make sure the advice you’re getting is from a trusted source.”
No spending month
There is naturally no better way to save money than by not spending at all – and videos under the ‘no spending’ challenge have gained over two million views on TikTok. Essentially, the challenge sees savers cut out unnecessary spending habits and only spend money on essentials, such as bills.
Depending on the rules people set out for themselves, the aim is to save as much money as possible and avoid spending on things like clothes, dinner, or activities and items deemed not necessary.
Does this work?
Ms Herbison said: “If you are cutting out spending in most areas of your life, you are definitely going to save a big portion of your income. So while this challenge works, it can also be an extreme way to save money – especially over the long term.
“But if you are looking for a short-term solution to saving some money, and want to challenge yourself, it’s worth giving it a go.”
The ‘cash stuffing’ challenge has gained over 875 million views so far, which has seen Gen Z make the old-school money hack of saving up physical cash go viral.
According to Ms Herbison, cash stuffing is a technique that encourages people to budget by putting money into different envelopes based on different categories. This could include mini envelope budgets for things like food shopping, clothing, travel, or anything people are looking to save toward.
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The concept is that by having physical money and tracking spending this way, people can better control their finances and avoid overspending.
Does this work?
Ms Herbison said: “The cash-stuffing method can be a great way to visualise your spending and stay accountable. Although this challenge can be effective, it isn’t for everyone.
“While you can definitely set out and achieve saving goals, the rise of cashless stores, restaurants, and online purchases make the practicalities of only using cash a little less realistic.”
The 1p challenge
The aim of the penny challenge is to end the year (or the 365 days) with £667 saved. To take part, people have to start with 1p on the first day and then add another penny to the amount saved every day afterwards.
For example, savers will put away 1p on January 1, 2p on January 2, 3p on January 3, and so on. If the challenge sticks, people could amass a savings pot of around £667.95 in total by the end.
Does this work?
Ms Herbison said: “This saving technique is a great example of how a little can go a long way. And if you are someone that struggles to put aside money, this could be a tactic for you.
“While the biggest challenge may come with remembering to put aside money each day – you can keep track of this on your phone and set daily reminders.”
The 50-30-20 budget rule
The 50-30-20 rule is a simple and straightforward method for allocating income and budgeting wisely. The idea is to split spending into three categories: needs, wants and savings. Within these categories, 50 percent is allocated to needs, 30 percent is for wants and 20 percent is put aside as savings.
Needs are generally classified as bills and food, while wants could be clothes, dining out, and hobbies, among other things.
Does this work?
Ms Herbison said: “This is a simple and sustainable way to budget your income – meaning you can incorporate it into your spending plan across the entire year. As a general rule, it’s an excellent way to make sure you are taking care of your spending needs, while still putting money aside.”
However, money experts at HyperJar have pointed out that during today’s climate of high inflation and living cost pressure, swapping this rule to 70-20-10 could be more effective.
Mat Megens, finance expert and founder of HyperJar said: “As Britons have made sacrifices to compromise with rising expenditure, the spending power of the nation has weakened significantly, with outstanding payments on credit cards increasing by 10.1 percent.”
He continued: “The 70-20-10 rule can really help people get a handle on their spending and budget effectively, giving you a good understanding of where your money is going.”
The savings ladder
The savings ladder has gained popularity on TikTok, offering a new twist to saving for specific items. Instead of putting aside the exact amount of money for a certain item, multiply the cost by two, three, or four to accumulate a larger amount.
For instance, if someone is saving for an Apple Watch, they may need around £400 to purchase it. But if they wait till they’ve saved £800 before purchasing, they’ll be left with £400, meaning they can purchase it and have money saved over.
Does this work?
Ms Herbison said: “Using the savings ladder method is an effective way to reward yourself every time you reach your target without dipping into savings. For individuals that love treating themselves to big-ticket items, this is a great savings tactic.”
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