It doesn’t matter what your current financial status is, everyone should be saving money for the future. Sadly, as the cost of living increases and our salaries persistently stay the same, it’s not always easy to find that extra cash and put it away for safekeeping. Interestingly, the hardest thing about saving money is getting started – once you start adding to your funds, you’ll soon revel in all your hard work and watch your savings increase, month by month.
So, with this in mind let’s explore some significant changes we can all make, that may highlight the true cost of your spending and help you prioritise your saving goals.
Consider a high yield savings account
If you’re serious about saving, then the money you’re putting aside shouldn’t be placed in any old account. Placing your money in a traditional savings account and watching it accrue a small amount of interest over time is a common approach, however, if you want your money to work hard for you, then you may want to consider a high yield savings account instead. This kind of account comes with a higher rate of interest than a traditional savings account, paying between 15 and 25 times more than the average interest rate on a conventional savings account. When you open a high yield savings account, you’ll also be able to transfer money easily between your accounts via digital banking, even if you’re with different providers, making saving even easier.
Choose a savings goal
Not everyone saves with a goal in mind, some take comfort from simply having money set aside for the future. However, having a specific goal can give you the encouragement you need to take your savings seriously. Whether you want to get a foot on the property ladder, enjoy the vacation of a lifetime or buy a new car for your family, choose a goal and stick to it.
Evaluate your budget and make changes
You might think that you’re already living on a tight budget. However, there’s always room for improvement. Make a start with these simple approaches:
– Make a list of all your outgoings and your income. Prioritise payments for bills, rent and food etc.
– Go through your bank account and you may be able to pinpoint bad spending habits, such as direct debits that are no longer needed, or additional trips to the supermarket that you can cut out completely.
– Search for cheaper deals on all your utilities, including your broadband, insurance and consider haggling forcheaper TV packages – or you can even consider cutting certain things out altogether if you don’t need them or use them often.
Make your savings part of your budget
If you want to take your savings goals seriously, then saving should be factored into your monthly budget plan and “paid” just like any of your other bills or financial obligations. Once you work out how much you can afford to save, make it part of your savings.
And finally: make it automatic
Don’t get into the habit of transferring your savings over, once the month is up. This approach means you’ll only ever spend your real saving potential. Making your savings automatic by setting up a direct debit of a specific amount, will help you reach your goal quicker and make your savings more consistent.