If you’ve high hopes of saving, but find certain habits slow you down, we’ve got some top tips to boost your progress.
Saving anything is better than saving nothing. But if you’re trying to give your savings a boost, we’ve got five tips to help you reach your financial goals quicker.
Be realistic
Setting a budget is a great way to manage your money and help you achieve your savings goals.
However, a common mistake is creating a budget that’s so restrictive it’s impossible to stick to.
Not only does an ultra-restrictive budget make you feel like you can’t have any fun, it can lead to overspending, which isn’t great for your motivation.
The trick is to be realistic with your saving - and to build treats into your budget.
The 50/30/20 rule allocates 50% of your income to your needs, like rent or mortgage and bills, 30% to your wants, such as dinners with friends, takeaways and days out, and 20% to savings or paying off debt.
However, this is only a guide, so feel free to adjust the figures to suit your lifestyle.
Remember, the ‘wants’ part of budgeting is really important. Make sure you set aside some money each month for guilt-free spending to keep you motivated as you save.
Don’t ignore your bank account
Checking your bank account fills a lot of people with fear. However, knowledge really is power with money.
Understanding what goes in and out of your account on a regular basis is essential as it gives you an idea of what money you have to spend.
In addition, the more familiar you are with your bank account, the more quickly you’ll notice fraudulent transactions, payments you no longer need to make and where you can make cutbacks.
Set yourself a challenge to log in to your bank account daily for a month and in no time, the fear will disappear and you’ll know where every penny is going.
Forget loyalty
In many areas of life, loyalty is a great quality to have. However, in finance, it’s a different story.
Many utility companies and service providers operate on minimum term contracts that tie you in at a set rate for a year or two. Once it’s over, the price usually increases.
Unless you shop around or switch, you’ll almost certainly be paying more.
When you take out fixed-term contracts, set a reminder in your calendar for a month before the term ends. That way, you can negotiate rates or move to another provider in good time.
Pay yourself first
As one of the most successful investors in history, Warren Buffet, once said, “Don’t save what’s left after spending, spend what’s left after saving”.
A good way to do this is to treat your savings like a bill and always pay yourself first.
As soon as you get your monthly income - or weekly, however it works for you - take the amount you’ve decided to put towards savings and move it into a separate savings account straight away.
That way, you’ve already hit your savings target on day one by committing to it before spending anything.
Everything else left in your account is for bills and guilt-free everyday use.
Make your money work harder
You work hard every day for your money, so why not make your money work for you?
Saving money is a great habit to get into, however, when you leave money in low-interest savings accounts for years on end, inflation can decrease your buying power.
Make time to learn about other ways you can build your financial future. For example, over the long-term, investing can give your money the opportunity to grow.
However, before you start, it’s a good idea to make sure you’ve cleared all your high-interest debts, have an emergency fund, and some sort of protection or insurance in place.
Remember, your investments can go up and down and you could end up with less than you started with. Past performance does not guarantee future results. The information provided is financial guidance and should not be considered financial advice.
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