Spend and save at the same damn time with the ‘savings ladder’ money hack

Written by Leah Sinclair

The savings ladder hack has gained popularity on TikTok, thanks to user @jandralee, and allows people to treat themselves while saving at the same time.

We’ve all heard the saying, “If you can’t buy it twice, you can’t afford it,” but how many of us actually live by this?

While the idea of any money-related motto usually makes my eyes instantaneously roll counter-clockwise, there is something to be said about purchasing something you want and knowing that it isn’t breaking the bank or that you won’t need to make any cutbacks in order to make up for that one coveted purchase.

According to Monzo, 94% of women are concerned about the cost of living crisis getting worse in 2023, showing that money is truly on all of our minds – but we shouldn’t need to completely deprive ourselves of purchasing one or two things that we love – and a new money-saving trend could be the key to both saving and treating ourselves all at once.

Known as the ’savings ladder’, this money-saving trend has been making waves thanks to TikTok user Jandra Sutton (@jandralee).

In the TikTok, Sutton shares the method behind the savings ladder strategy.

“Instead of starting with the amount you want to save for, start with the reward you want to give yourself,” she says. “You find out how much that reward costs and then, depending on how much you want to save, you multiply that times two, three, four… whatever.”

Sutton uses the example of purchasing Apple Airpods (£119), multiplying that amount by three, leaving you with £357. This way, you’re able to purchase the Airpods and have £238 saved.

“Another example is if you want to buy a new jacket that costs £50,” says financial coach May Fairweather. “Your goal becomes ‘save for six jackets’, which is the amount you wanted to save plus the cost of the reward. When you’ve saved your six lots of £50, you buy yourself the jacket and put the other £250 towards whatever less exciting thing you needed to save for.”

Fairweather says the saving method is worth trying as it takes a “really abstract idea of a number and turns it into something fun and recognisable”.

“It also means you get a reward every time you reach your target without dipping into those savings,” she says.

The savings ladder is an interesting approach to saving money that deviates away from the traditional methods many of us grew up using.

While I was always taught to put a particular sum away each month, the idea of saving for a particular item and knowing that I’d ‘over saved’ using this method means I get to buy something I want, but I also know that I’m working towards something bigger with the additional money saved. Talk about a win-win.

“For people who find it hard to treat themselves because they’re so laser-focused on saving, this is a fantastic way to give yourself permission to spend some money on stuff you want. It will help your savings strategy be more sustainable, so in the long run, you end up saving more than if you go super strict and burn out,” says Fairweather.

“For people who struggle to save because there are so many things you want to buy, a savings ladder lets you enjoy your money while still stacking up some savings.”

The financial coach says people can start small, eg saving two times the cost of the reward, so they hit their goal faster and get that prize – then build up to bigger amounts saved once they’re used to the habit.

However, there is one risk with the savings ladder method.

“There’s a risk that you might end up spending just for the sake of it or buying more than you would otherwise have done,” warns Fairweather.

“It’s important to keep a close eye on what your motivations are and to remember that all savings are really just delayed spending.

“If your savings balance goes down because you used the money for its intended purpose, that’s great and isn’t a cause for concern.”

With many of us starting or continuing our saving goals for 2023, perhaps a new method like the savings ladder is the perfect way to help boost your savings for the year while rewarding yourself too.

Speak to a financial adviser registered with the Financial Conduct Authority before taking any financial advice, and think carefully before making any decision. 

Image: Getty

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