Be the saver you want to be
If you already have some savings, how often do you check on them to make sure they’re helping you achieve your goals? Here are some tips to help you make the most of the money you’ve put away.
Take some time to think about your finances
Could you save more than you do now?
- Think about what money you have coming in and what you spend. Knowing how much you have to live off each week or month will help you understand how much extra you might be able to save.
- Decide what you really need, and what things are ‘nice to haves’. Think about which things really make you happy and which things you only buy out of habit. Do you really need them? Or are they extras you could live without?
- Are your savings sitting in a current account earning very little interest? Whilst it’s good to have some money available for an unexpected cost, you could put some of your extra savings into a dedicated savings account. A fixed rate or notice account, for example, will earn more interest and help your savings grow. Explore types of account here.
- Be realistic about how much you’d really need in an emergency. A good rule of thumb is to have three months’ take-home pay in an account you can access quickly.
- Different savings accounts from different providers could give you higher returns. Some investments offer higher returns but often involve a bigger risk and don’t allow you to withdraw money quickly. Make sure you’re weighing up all the pros and cons when choosing where to put your money.
Better returns?: It’s always worth checking if your existing savings accounts are giving you the best interest rate. Look at comparison websites, individual provider websites or pop in and ask in local branch.
Book a savings review: Many providers offer a free savings review service. They’ll help you get to grips with your current financial position and suggest ways for you to improve your savings.
Interest builds over time: The interest you earn on your savings goes on to earn interest itself. Add to this whatever you put away regularly, and the amount you have soon grows. Find out why interest rates are so important here.
Goals to help you go further
Having targets to aim for means you’re more likely to achieve them. Here’s some tips for setting new goals.
- The perfect balance is setting yourself a goal that you feel will be an impressive achievement but won’t be too much of a stretch for you.
- Make your targets specific, not general. For example, instead of ‘saving for a holiday’ say ‘saving £2,000 to go to Ibiza next June’.
- Make visual reminders that will help motivate you to save. For example, if you’re saving for a car, put a toy car somewhere where you’ll see it often, like next to the TV.
- Once you’ve built up a reasonable amount of savings, you’ve proved you can do it. Take confidence in knowing you can save and use it to be an even better saver.
Stay in control
Feeling like you’re in control of your finances is great for being able to push ahead with building your savings.
- There are some great apps and online tools to help you manage your money, whether it’s automatically saving for you, rounding up your spending or helping you calculate your budget.
- Allocate some time regularly to check in on your savings. For example you could set a reminder to do this every three or six months. It doesn’t need to be a huge effort, but there are benefits to making sure you know where your money is and when deals are coming to an end. It’s all about balance.
- Make sure you understand the terms and conditions of any savings accounts you are thinking about opening. Some limit the number of withdrawals, or reduce the interest paid if you take out some of your money early.
- Don’t beat yourself up if you forget about your savings for a while, or miss a few planned deposits. The work you’ve already put into getting on top of your savings gives you a great place to pick up from.
Can you beat your savings goal?
Think about getting there earlier.
How good would it feel if you got to your goal a few months or even a year sooner? Taking a few minutes a month to manage your finances could help you stay on top of your savings and reach your goal faster.
These ideas could help you speed up your savings:
The no-spend challenge
Avoid buying anything you don’t NEED (takeaways, clothes, days out, etc.). Instead, only pay for things that are necessities (bills, food, etc.). It isn’t one to keep up for long, but it’s a good way to prepare for any unavoidably expensive weeks or months in the future.
Step it up
Save £10 in the first month, £20 in the second, and so on until you save £120 in month 12. At the end of the year you will have £780, plus any interest you have earned.
Many banking apps can help you skim your payments by rounding up your transactions. For example, if you spend £2.75, £3 is debited from your account with 25p being added to your savings account.
What do I do now?
Finding the right accounts can be confusing but making sure you do can help you get the most out of your money. It gives you somewhere to set aside a pot of money that isn’t your day-to-day current account and can make sure your savings are earning a good rate of interest.
I’ve always had a passion for cars, specifically military vehicles, so when a farmer was selling an old military jeep for £150 I knew it was for me – even though it needed a lot of restoration. Since then I’ve put some money away each month in a Dudley Building Society monthly regular saver account, and any money I have received, such as for birthdays and Christmas, I have added to my ‘jeep restoration’ savings pot. These savings, which have grown over many years, means I am now getting close to the dream of having my jeep in full working order.
Simon Sage, Dudley