According to new statistics, around 1.1 million UK households have savings that are under £1,000. With savings numbers like this, if you have more than £1,000 in savings, you are showing that you are good at saving money. Saving is something that Brits are trying to get better at but if you are one of the lucky people who do well with savings, this is the perfect guide to help you manage your money and to build on what you have achieved so far.
Step 1: Assess your savings goals
You need to think about how you want build on your current savings. If you have passed your £1,000 threshold, you should focus on getting your savings to £1,500 instead of £2,000. By dividing your goals into smaller bits, you will be able to reach them. Do you have short-term goals or long-term goals? You should have an idea of whether you are saving for the short-term or the long-term. Short-term goals can be anything from saving for a holiday that you want to take in three months to buying a new car within three months. Long-term goals include buying a home. Long-term goals are harder to save for, such as saving for your retirement but they are also the most financially rewarding because they put you in an enviable position.
Step 2: Make a budget that enhances your saving personality
If you are excellent at saving, create a budget that builds on this so that you can save more while still living the life that you want for yourself. If you are single without children, consider creating a savings cycle where the money comes straight from your wages every month. This way, you do not need to think about the money at all, and you will not be tempted to use the cash when it does come out of your account. Your budget can also include fun things that you like to spend your money on, but you can still make saving at the centre of what you do.
Saving money is not just for single people. If you are in a relationship, married or with children, you can definitely create a budget that suits you. For families with children, it’s critical to save for yourself and for your children. You could create a bond for your children that they can access when they are older. This is a good way of keeping your children’s future safe, without being close to money that is that liquid.
Step 3: Use spreadsheets and apps
The rise of smartphones has meant it has become so easy to manage your spending. If you are constantly on your phone just like the rest of the world, you can download many free budgeting apps that let you see how your budget is treating you. You can also track daily spending. Understanding how much money you spend every day is excellent way of understanding how you can save more money. If you love drinking expensive coffees, you can make small adjustments here so that you can save more money for the things that are important to you.
Step 4: Create a special emergency fund
Emergency funds have never been more important than in recent years, after the recession ended. A survey from the Department of Business, Innovation and Skills found that more than 4 million UK households do not have any savings at all. This highlights how difficult it has become to save in Britain, in addition to the constant temptation to spend money. You can avoid this by creating a separate emergency savings account that you do not touch only if you fall under hard times. For example, if you mix your emergency savings with your general savings, it will become even harder for you to avoid dipping into all of your savings. An emergency fund keeps you safe because it is in another account.
Step 5: Buy what you need
Excellent savers will want to save as much money as they can depending on what their goals are. This is good but you should also enjoy the fruits of your labour as long as it fits into your budget. If you can go on a holiday and still save, you should do this so that you can see what the money can do for you. The most important thing to do is to avoid reckless spending that can affect you.
Step 6: Change your goals regularly
Once you achieve your goals, don’t be afraid to try new savings goals. By the same token, you could decide that you want to revamp all of your savings goals instead because circumstances in your life have changed. Taking a fresh look at your goals will help you understand where you can make changes so that you can be happy with your personal finances.
Step 7: Save money for retirement
When you think about saving money, you should always have retirement at the forefront of what you do. By saving money for retirement, you instantly help yourself in your future. It is like you are paying yourself without even realising it. Saving money is critical, so look for professional financial advice if you want to incorporate this into your future.
Step 8: Create a special savings fund to pay for your student loans
Student loans can seem like a big thing to pay off but they don’t have to be. Every month when you are saving for your emergency fund, or a holiday, be sure to put money aside to pay off your student loans. People who are good at saving money can do this because they are already used to the rhythm of saving money, so this is just another thing that they can add to save even more money.
If you are amazing at saving money, you are way ahead than others. Build on your excellent saving skills with these top tips, so you can save even more money for yourself and your future. Savers should always continue to look for new ways to save money that suits their lives without giving up on things that are important to them.