While most of the nation is looking at ways they can cut back on spending, a money expert has shared one of his top tips for making big savings. His simple budgeting hack could help a typical family save £5,000 over the course of a year.

The 50-30-20 rule:

Mr Megen said people need to know where their money is going if they want to get a grip of their spending. The 50-30-20 method splits money into different categories – 50 percent for needs, 30 percent for wants and 20 percent for savings. The guidelines are:

• Allocate 50 percent for needs, including all essential payments each month (for example housing, transport, food, education, childcare, bills)

• Budget 30 percent for wants, including non-essential spending (treats, gifts, restaurant, fast food, social events)

• Keep 20 percent for savings and debt repayment (emergency fund, savings goals, credit cards).

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Veronica continued: “They’d be surprised how much they spend on coffees and things like that which you can do without.

“Keep a record of what you spend and you’d be really surprised how much you spend on things.”

Another tip that may help people stick to their budget is to draw cash out once a week and use that instead of debit cards.

A single mum from Bristol recently told Express.co.uk how she saves £250 a month by doing this.