If you’re not already a saver, getting started might be a little daunting. So this video and article will hopefully give you the motivation you need to begin putting money away - and keep doing it.
1. Name your goal
Rather than just having general savings, it can really help to have a savings goal. People who name their goal are more likely to reach their target and keep going.
So what are you saving for? It could be something big like your first home, perhaps the arrival of a baby, or you want to get a new car.
Or it can be something smaller. Is it Christmas? Your holiday in the summer? Even just a new coat? You can think more abstract too. Perhaps your goal could be saving for a rainy day? You can of course have more than one goal.
Sometimes people like to find a photo that represents their goal and stick it somewhere they’ll see it everyday. This can help remind them why they are saving.
2. Find the money
Now you’ve identified what you’re saving for, you need to start. Work out how much you can afford to save, or how much you need to save to reach your goal.
So if you want to get £1,000 within a year, you’ll need to save just over £83 a month.
You might be able to do this without cutting back, but if not building a budget to get a real sense of your finances will help. With a budget you can look for areas you’re possibly overspending, or see where you could perhaps cut back to you’ve cash to save instead.
3. Make it a habit
It’s all very well setting a goal and identifying the money you’re going to save, but to quickly reach your target you need to think of your savings pot as a something separate to your spending money. If you keep the savings in your everyday current account with your other funds you might accidentally dip into it.
Instead look for a separate account - this could be another current account or a regular saver account to get the best interest rates - and set up a standing order to move the money every month.
With this fixed amount leaving on a regular basis you’ll quickly get into a savings habit.
Alternatively if you want to visually measure your progress and keep motivated, you could keep your money in a jam jar at home - though you won’t be gaining any interest on this cash.
4. Check your progress
Every few months it’s worth checking your progress. Make sure you’re keeping to target, but also review if your savings goal is the same. There’s no harm changing what you’re saving for, reducing or increasing the amount you want to save, or even add in new goals.
Plus, make sure the money is working harder for you but checking the interest rate you’re getting on your savings. If it’s low, think about moving the money elsewhere to get a better rate.