We all know saving money is a good idea! First and foremost, having a safety net of savings can really help ease your worries and make opening that ominous urgent email or a sudden flat tyre seem substantially less terrifying. But savings can offer so much more than that – it can help you realise your dreams – whether that be home improvements, that holiday of a lifetime, or early retirement. Even better, savings can provide you with the ability to support those you love – think tuition fees, first cars, dream weddings, sound familiar?!
So that’s covered the ‘why’, now for the seemingly tricker side – the ‘how’!
Before you get into the detail, think logically – what are you saving for? What goal do you have in mind? Get that straight and then decide how much money you realistically need to make happen. That will give you the target and something clear to work towards. Your end goal is, of course, your long-term motivation.
With your sights clearly set, now is the time to be really honest with yourself. What can you realistically save each month? This is where your calculator will be needed – as you need to work out exactly what you have to spare after the absolute necessities are paid.
Top Tip: Remember to factor in some ‘free money’, ‘contingency’, a ‘cushion’ or whatever you want to call it. Even with the best of intentions, you will still want to leave the house even when you’re saving, and things do crop up. You don’t want those to derail your savings efforts.
Once you have all this information at your fingertips and more importantly very clearly laid out in your mind, it’s time to go shopping for the savings account that best suits your needs. This can seem daunting, particularly if you’re dipping your toe in for the first time. If that sounds familiar, ask for advice – why not pop to your local branch and speak to someone who knows about saving and can walk you through the types of products on offer? If you prefer to your own research online, visit a comparison website or two and see what’s out there. These sites are focused on helping you and will display accounts from different providers in a way which makes them easily compared. Think opening and maximum balance, rates on offer, paying in terms and access!
Once you’ve committed to your account and you’re all set to succeed, ask yourself is there a way you can take the hassle out of paying in? Having to contribute to your savings manually every month means you have to overcome that mental hurdle of completing that individual transaction every single time. This can be an especially large hurdle if you need to visit your branch to do so. Make it automatic – why not remove that hurdle and set up a standing order? You remain in control, and can tweak the amount if you need to, but your money is automatically sent without the need to lift a finger once set up.
Or perhaps your employer has a workplace savings initiative in place – meaning money can be debited from your wages before it even reaches you. Even better! A great way to remove the temptation to miss a month here and there. Speak to your employer about Workplace Savings and see if they have something in place – if not, contact us and we can arrange to speak to your place of work to get this set up.
This leads us neatly to the dreaded ‘barriers’ in life that can easily lead you to think it’s just too difficult to save:
- Money is tight.
There is no easy magic fix to limitations of income. Yes, we could all perhaps consider selling things we own and don’t want or need – good start. But it’s more a case of ensuring you’re not spending more than you need to. Could you buy a few less treats? Have you checked you’re getting the best deal on your insurance, your energy? Could you try a different food shop? Do you make full use of your subscriptions or memberships, or could you wave goodbye to that Direct Debit?
- I’ve not got the time.
Saving really doesn’t need to be onerous! The only real commitment is the planning, and if you are focused and logical that need not be lengthy. You can open accounts online; you can automate payments or factor in one walk to your local branch on your lunchbreak at the end of the month, or as we noted earlier your employer may even offer you solutions direct from your pay-packet.
- I don’t know where to start.
We’re not all financial experts – but you don’t need to be. Gather basic information as noted above, whether that be online or in person, and speak to staff in banks and building societies, they can and will happily help. And, if you really need advice, it’s there for the taking. Visit the Citizens Advice website.
- Temptations get in the way.
This is all about changing habits and rewarding yourself for resisting. Be very deliberate with your spending – work out if it really matters to you. Try to identify impulse purchases before they happen by giving yourself time to think. If you usually buy new clothes every month, do it every other to start with. Your wardrobe will thank you and your savings pot. If you can’t resist when you go into certain shops, give them a wide berth, a certain company always sends you the best deals – unsubscribe from their mailing list. Keep out of harm’s way – make refraining less painful.
- No set game plan.
If you’ve read the above, we hope you’ll agree we’ve got that one covered. Set a target, work out what you can afford each month, find a savings account that suits your requirements, focus on balance, rate, paying in and access. In order to succeed make it as easy as possible to stick to your plan with automation and habit building.
Finally remember you know you best – be honest, be organised and find what works with your lifestyle and make it as easy as possible to get into the habit. And don’t forget – keep checking that balance, watching your money grow will provide great satisfaction, every deposit is a step closer to realising your aspirations. Ready, set, save!
To find out more, visit our UK Savings Week page.