Starting out with saving is easier said than done.
When you feel like you’re surrounded by people who are more financially independent, it can be difficult to talk about your challenges and doubts about saving money. But since more than 11 million Brits have less than £1,000 in savings, you’re not alone.
Saving money gives you more confidence and control in your future. No matter your age or circumstances, it’s worth knowing how to get started.
Four simple ways to start saving money
1. Know how much you’re spending
Firstly, taking note of your outgoings is key to every other step.
You should try to keep track of each coffee, household product and impulsive online order to get a better idea of exactly what you’re spending. Try to cut unnecessary spending too, whether it stems from café trips or neglected subscriptions.
You can record it in whichever way works the best for you. Whether that’s with a purpose-bult app or a notepad and pen, you’ll oversee the data. Keep every receipt and mobile banking notification to make sure that nothing slips the net.
2. Set a budget
Next, you’ll need to think of a budget. Once you’ve got a solid idea of how much you’re spending in a month, you can create a budget that includes regular expenses, relative to your income. You’ll then know how much you can afford to save too.
Try to include a specific savings category – and think about your disposable income entirely separately. You should also factor in those expenses that only recur occasionally, such as getting your car serviced or visiting the dentist. Aim to eventually increase how much you’re saving by around 15% of your earnings.
3. Open a savings account
Planning to save without digital means to get it done might feel difficult and more time-consuming than necessary. That’s why it’s so important to do your research and open a savings account that aligns with your personal goals.
You’ll need to choose between fixed and flexible options. For example, fixed rate bonds offer competitive rates over a set period, but you’ll need to commit to a set amount to save every month, often for at least one year. An instant access savings account could be better suited if you’d like that little bit of flexibility in case of anything unexpected.
4. Figure out your priorities
Lastly, it might be tricky to stay motivated when you’re only just starting out on a savings journey. It’s crucial to make sure you know why you started in the first place – so when you start to feel disheartened, you can quickly refocus and look to the future.
Whether it’s to put towards a deposit on a house or a new car, your savings goal should be meaningful, personal, and realistic. With the result in mind, you’ll be able to save faster than you’d expect.
