Know what you’re saving for
Getting on the saving path is likely to be much easier if you know what you’re saving for, so stop and think about what it is that you’re aiming for. Whatever your ambitions are, write them down.
Once you’ve got a list of priorities you can divide them into long and short term and prioritise what you’d like to start saving towards first. It might be a good idea to pick off some of the low hanging fruit first and start with some of the easier ones.
Create a savings plan
Having something you’re saving for in mind is one thing; the next step is to have a clear plan in place to put it into action. A successful savings plan may break down exactly how much you need to save in what timeframe and show you what amount you need to put aside on a regular basis.
Find out more about creating a savings plan.
Pay yourself first
The cornerstone of a successful savings plan is how much you’ll put away on a regular basis. You could make it easy on yourself by setting up a regular payment into a dedicated savings account, just like you might have direct debits set up to pay your phone bill or electricity and gas.
You can also set it up yourself in online banking – just select a day that suits you to make the transfer, perhaps on the day you get paid.
Create a budget and keep an eye on your spending
It’s important to have a good understanding of what money you have coming in and what expenses you have going out. Some of these will be easier to monitor, as they’ll be fixed such as your mortgage or rent. But others might be a bit more sneaky, such as what you spend on entertainment or eating out. Try keeping a spending diary for a few weeks – that means writing down everything you spend, right down to your morning coffee. You might be surprised where your money goes and find areas where you can spend less and put more into savings.
Set up a savings account
Leaving your savings in your everyday bank account could make it easy to spend. Not only this, you’re not likely to earn significant interest on money in your everyday account. Some accounts may pay bonus interest if you meet certain conditions, such as making a minimum deposit each month and not making any withdrawals.