Nationwide explains little-known £1,500 rule customers must follow

Nationwide has issued a reminder to customers about a savings "rule" which could earn members an extra £1,500. In its November MyNationwide newsletter, Nationwide - which is the UK's biggest building society - encouraged customers to adopt "smarter spending" habits.

"It's that time of year again. There's often a lot going on, which can make it tempting to spend more than you meant to," the newsletter states. Nationwide urged customers to review their budgeting tips to help maintain control of their finances and identify when they can afford "those little extras."

"Doing this can keep you enjoying the things you love whilst living within your means," Nationwide said. "The 50-30-20 rule is great way to plan out your spending," the building society explains in their newsletter. The idea is you'd aim to spend your income:

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• 50% on musts – your fixed outgoings and essential living expenses
• 30% on wants – your day-to-day spending and the things you enjoy
• 20% on savings or debt – paying more than your minimum payments or putting money into savings account, pot, ISA or investment

Nationwide provided a practical example using a monthly income of £1,500 after tax and deductions. According to their breakdown, this would mean allocating £750 to needs, £450 to wants, and £300 to savings or debt payments.

Your wants cover things you enjoy but may not need, like your Netflix subscription, eating out, personal treats, hobbies and memberships like the gym. The financial provider went on and said: "Understanding your spending habits can help to identify the treats you don't really need."

It added: "But budgeting is meant to help improve your financial well-being. If giving up your Spotify subscription or Friday coffee will make you unhappy, maybe keep them. It's about balance and cutting back on things you feel you can give up comfortably."