How to save money
Achieving your savings goals
Putting a portion of our earnings aside each month isn't always easy, particularly when there are a whole load of other expenses to deal with, and living costs are constantly on the rise. That's why it's crucial to have a savings goal in place, helping to focus on future plans and keep on the straight and narrow with everyday spending.
If you're unsure where to begin, read on for our guide to saving success.
Setting your goal
The first (and possibly most important) step in achieving your goal is deciding how much you need to save. Not only will having a clear figure in mind motivate you, it will also help you to reach your goal faster. Just having a target in place could speed up the saving process.
Once you've got the final sum, grab a pen and paper and write it down, pinning it up somewhere you know you won't be able to miss it as a reminder. You'll then need to break this figure down and work out how much of your salary you can put towards it each month.
Add up all your everyday costs, from groceries and fuel to household necessities and transport, and devise a realistic budget, cutting back on luxuries you could do without. Don't be too strict on yourself – you've still got to live – so set some cash aside for entertainment and the odd treat. You should also account for one-off, irregular payments, such as car servicing or birthdays.
Next, work out how many months you will need to be saving for, so you have a rough idea of when you might hit your target. This is particularly important for anyone who has a time constraint on their saving, such as with a deposit for a new house. Once your routine is established, you'll feel more in control of your savings and have a bigger picture of your finances.
Sticking to your plan
Setting a savings goal is the easy part. Sticking to it is much harder, which is why it's best to make sure your plan is realistic. If you've worked your budget out carefully and accurately, you shouldn't have too much trouble putting it into practice.
To keep you motivated, it might be useful to place some images about your home, reminding you of the dream holiday you're saving up for or the car you're hoping to purchase. Setting up a monthly transfer between your current account and savings account will also help you to stay on track, tying the money up and helping to prevent you from spending it on other things.
If, at the end of the month, you've spent less than anticipated, you could put the extra money straight into your savings pot and edge closer towards your target.
Sharing your goal
Once you've informed your close friends and family about your savings goal, you'll find that the challenge feels a lot more real. But this could be key to making sure you stick to your plan. What's more, your loved ones are bound to be a huge help in encouraging you to reach your target.
Perhaps you're saving up with a partner, in which case, the two of you will be able to support each other in your monthly budgeting and keep one another on track. Looking to the future together will also help you to feel more excited about what's to come once you've achieved your goal.