5 easy tips to help you to save
Saving is a really important area of personal finance – it basically helps you prepare for the unexpected. For example, if you have savings in place, you might not be knocked off balance by your car suddenly breaking down, whereas if you didn’t have savings you could end up in debt in that situation. Some experts say that, ideally, you should have the equivalent of at least three months’ income saved up – just in case.
Saving can be easy too, so here are 5 really easy tips to help you save.
1. Make a budget
Planning a budget doesn’t have to take ages. Just note down how much income your household earns each month, remembering to include things like benefits. Then calculate how much you spend each month on your essentials – things like your mortgage or rent, bills, food and petrol. You’ll then be able to see what’s left over, and hopefully you can see how much you could put into savings each month.
There are smartphone apps and software out there that will practically draw up your budget for you. In fact, check if your bank account keeps track of your spending so you can see whether you can cut back in any areas.
2. Have a goal
Whether it’s a holiday, a new car, or just an emergency fund that has enough to support you if you lost your income, it helps to keep a goal in mind. If you have children, encourage them (and yourself!) to be enthusiastic about saving, perhaps by drawing a large ‘gauge’ (like a big thermometer) that you can fill in as you get closer to your goal.
3. You won’t miss what you never had
Set up a direct debit into your savings account that will deposit a certain amount of money – even if it’s just £5 – from your current account just after payday. That way the money will be gone before you even knew it was there. You could also try the traditional ‘penny jar’ approach, where you can deposit loose change whenever you walk past it.
4. Make a game of saving
Make a challenge for yourself – how little can you spend each week? Figure out how much you spend each week (after your essentials) and try to spend less. For example, if you would usually spend £100 a week, try to only spend £80 – or even less. It might help to withdraw cash and tell yourself that you cannot spend any more after this cash has run out. See how far you can go without spending, and consider having ‘spend-free’ days where you try to get by without spending anything.
5. Get out of debt first
It may not make sense to save if you have unsecured debts to repay, so you might decide to deal with these first. Take as much money as you can – the money you would be saving – and put it towards your monthly debt repayments to pay them off more quickly.
Sometimes, however hard you try, you just don’t have enough to keep up with your debts – let alone save. If you’re a resident of Scotland, and you don’t think you’ll be able to repay what you owe in a realistic amount of time, there are debt solutions available that could help you. If a Trust Deed is right for you, it could help you clear your unsecured debts in three years. This link and this link provides more Trust Deed information.