When it comes to saving, it’s often all-too-easy to see it as a chore or even a deprivation. But what happens if we reframe that way of thinking and instead view it as a challenge – a way to build your wealth to turn your dreams into reality? Embracing a more positive mindset might just make the idea of putting money away for the future a little less hard to contemplate.
No matter whether you’re saving for a rainy day, a big holiday, a house deposit, or retirement, it’s important to keep in mind that every pound you slot away is bringing you a step closer to your financial goals. If you’re worried about how you’re going to stay on track, investigate making the most of apps, tools and hacks designed to help you meet your targets.
Apps to help you stay on track
As a starting point, you might want to enlist the help of a money-saving app to help you stay motivated. With the intuitive Starling app, for example, there’s a feature which automatically swipes a set amount of money into what are known as ‘saving spaces’ for you. These spaces allow you to ringfence your money for savings goals.
Apps from Plum and Chip use technology to determine how much you can afford to save. That amount of money is then automatically transferred from your current account into a separate savings pot. Elsewhere, apps such as Monzo and Chase offer a round-up feature where your transactions get rounded up to the nearest pound. The change is then automatically moved into a savings pot for you.
Dig around a bit, and you’ll find many of the apps have a whole host of savings challenges you can sign up to.
Old-school challenges
If you like the idea of a challenge, don’t be too quick to dismiss tried-and-tested approaches such as the cash-stuffing method where you put actual hard cash into envelopes at the start of each week or month. And then there’s the 1p savings challenge where you start by slotting away 1p on day one, and then 2p on day two and so on. Keep it up and by the end of the first year you’ll have saved a neat £667.95 – proof that starting small can lead to big things.
Similarly, with the 52-week saving challenge, you start with just £1 in the first week, £2 in the second, and £3 in the third. Towards the end of the year, you are saving higher amounts, topping out at £52 in week 52. Stay disciplined and you’ll amass a decent £1,378 by the year’s end. Just bear in mind that with methods such as these, you won’t be able to earn interest, and that you’re likely to be better off transferring cash to a savings account on a regular basis, such as an easy-access account, regular saver or cash ISA.
Clever hacks
Another fun way to boost your savings pot is by tying it into another challenge. This might, for example, involve you quitting smoking and putting the money you’ve saved on cigarettes into a savings account. Or it might entail you going on a diet and then tucking away £1 for every pound you lose. Alternatively, you could set yourself the small vices challenge where you cut out your daily coffee or go without ordering a takeaway for a month – and then slot the money you would have spent into savings instead.
Eyes on the prize
If you’ve got it in your head that saving is boring then why not spice it up a little by taking a flutter on premium bonds. While you don’t earn any interest on money you have squirreled away, you will be in with the chance of winning a prize. These vary in size from £25 to a cool one million pounds.
What you get with premium bonds is a prize fund rate which currently stands at 4.4%. If you’re lucky, you might bag a couple of prizes and get a return which is much higher than the prize fund rate. But do bear in mind there’s also a good chance you’ll go years without ever winning a prize – meaning you get no return at all. This article explains more.
More psychological tips and tricks
Set up a direct debit
This can go into a savings account the day you get paid – that way, you barely notice the money leaving your account.
Be disciplined
Keep your savings separate from your day-to-day current account, so you don’t get tempted to dip into your savings for everyday expenses.
Set the right savings goals
Make sure the savings goals you set are both specific – and manageable.
What are the upsides of getting into good saving habits?
Getting into a regular savings habit can be a game changer; you might be surprised how fast a few pounds each month builds up, especially as rates have soared over the past couple of years. Making it a habit also reduces anxiety – knowing that you have money set aside for emergencies or unexpected expenses can help you reduce anxiety and stress. With a financial cushion of between three- and six-months’ worth of expenses in place, you’re better equipped to handle life’s challenges with confidence.
It boosts happiness too. With so much in your future that you don’t have control over, having money in savings can help you take back some control. Happiness can come from being organised with your finances.
The same goes for investing. If you’re looking for more growth from your money and you’re happy to take a bit of risk, stock-market based investments are the way to go, in addition to savings accounts. We explain why both saving and investing are important. One way to get into investing is through an investment platform, as we explain here. To find the best platform for your needs and circumstances, run your own comparison using the Compare+Invest platform calculator.
Photo by Matthias Speicher on Unsplash
