First save, then spend

If you find it difficult or impossible to save money, here's an approach that will enable you to divert some of your monthly spend into a savings account. From the book 'Detox your Finances' by John Middleton, available from Infinite Ideas as part of their '52 Brilliant Ideas' series priced £12.99

Let's be clear - building up your savings is a very good thing to do and an excellent habit to get into. Not least of all because we all find our wallets or purses ambushed at short notice by sizeable bills coming out of left field at us. You know the sort of thing: the central heating breaks down, the roof springs a leak or the car starts making a noise like a Tuvan throat singer.

As well as warding off emergencies, savings can enable us to plan for the future. It might be something coming up relatively soon - your next holiday, upgrading the computer or replacing the car (that Tuvan throat singer thing is not good news, believe me). Or there may be a more distant blot on your financial landscape - children going to university perhaps.

When these things happen, you have three basic options: (a) draw on your savings; (b) go into debt; (c) write a snappy begging letter. If option (a) isn't available because you have little or no savings, you're left with unpleasant option (b) or unlikely option (c).

You might be thinking at this point: OK, obviously having savings is a 'good thing' but what if there isn't anything left over at the end of the month to put into a savings account.

Don't get suckered into a 'not today, maybe tomorrow' attitude to saving. This may be an accurate description of your current situation but what I'd suggest is you could be experiencing a monetary version of Parkinson's Law (you know the one - it states that work expands to fill the time available for its completion). Most of us spend what we earn; if our pay goes up, we upgrade our lifestyle and we're soon spending what we earn again.

Against this backdrop, you can see the flaw in looking to save whatever is left over in your account at the end of each month. Chances are the sum involved will always be a big fat zero (and that's in a good month).

So spending and then saving what's left over will get you next to nowhere. Here's an alternative: try saving and then spending. In other words, set aside a certain amount each month as savings, and then make the remainder your budget for the month.

It's Parkinson's Law in reverse: reduce the amount of money you have available to spend each month and then adjust your lifestyle accordingly.

Is this possible? Well yes, when you consider that, on average, around 20 per cent of household expenditure goes on leisure. Think of the thousands a year that we can fritter away on lattes, newspapers and magazines, pricey sandwiches, DVDs, chocolate and so on.

If you don't have a savings mentality, try setting yourself a goal. It might be to have three to six months? salary set aside for emergencies, or maybe to get hold of a plasma monitor in the next 12 months. Whatever you plump for, having a goal gives a bit of meaning and purpose to the idea of saving. It comes in handy when you next walk past Starbucks to remind yourself that passing up a take-out coffee is not just wilful self-denial, it's helping to bring that 42-inch screen just a bit closer.