If you’re not a seasonal saver then saving can be little bit daunting and it may take some time to get into the swing of it. According to the Money and Pensions Service, a quarter of UK adults have less than £100 put away, while one in six have no savings at all! We all know we should save, but how do you get started and keep going to make sure you save consistently? To help you kick-start your savings habit, we’ve put together some top tips to help you get on track.
Budgeting really is your first step to start saving. It allows you to track all your spending, create spending limits and identify areas where you can cut back, so that you can put money into savings each month and avoid debt.
A budget sounds scary, but it is actually easy once you get going. To start your own budget, make a list of the household income and then make a list of all the outgoings – this includes bills as well as everyday spending such as the odd take-out coffee.
Once you’ve got your list, if your outgoings exceed income or you don’t have much to save, then you need to start making cutbacks. Ditch all unnecessary spending – this could mean making simple changes such as taking lunch from home instead of buying sandwiches. Plan ahead to make it easier.
To help you understand your spending, take a look at six months of bank statements, keep receipts and write everything down. Be honest with yourself.
Once you’ve budgeted, try and allocate a set amount to savings if you can.
Set a goal
Without a goal in mind, there is sometimes little motivation to save, so think about what you want to save for. For example a holiday, a new car or to build an emergency fund (if you don’t already have one) to help with unexpected costs, such as a broken boiler or a leaking ceiling.
Set up a dedicated savings account for each goal you have — a goal can make you determined and help you prioritise your money.
When you get paid, set up a standing order so that money leaves your current account immediately and goes into a savings account. Consider this your ‘pay’. Most people just plunge into spending their monthly pay cheque without actually ‘paying’ themselves first.
A monthly standing order is an easy way to save, and after a while you won’t even notice the money coming out — and you’ll be surprised at how fast your savings grow.
Set up a savings account
If you don’t have an ISA, then make the most of the annual £20,000 tax-free savings allowance. If you have a long-term savings goal (more than five years) then consider stashing your cash into an investment ISA to maximise your returns. If you think you may need your money sooner, then make sure you shop around for the best cash ISA rate.
Some fixed-rate accounts are also competitive and allow you to save for a fixed period with a guaranteed interest rate.
It’s ok to a have a number of saving pots if you want, just make sure you review all the accounts regularly to ensure you are always getting the best rate for your money.
There are also a number of apps to help you save and budget such as Plum, Chip, Chase and Mondo.
Photo on Canva.