Saving Tips For The Year Ahead

Saving Tips For The Year Ahead

OK, so we haven’t even got to Christmas yet but given that this time of year puts all sorts of pressure on the wallet, we want you to be ready to recover your finances in the new year.

According to recent research, just under a third of families have less than £500 set aside, and nobody is immune from emergencies – from the car breaking down, the boiler packing up or worse, losing your job.

Savings are also there for good things as well – a home or a holiday for example. It’s been proven time and time again that those who set a savings goal end up with over £500 more then those who don’t. So here are 10 top tips to saving up.

Pay Off Your Debt – before you even start saving, it’s nearly always the case that debt costs more than saving can earn. Therefore try and clear your debt as best you can from credit cards, overdrafts etc before you try and save. This will make your saving far more effective.

Daily Savings – a year is a long time in terms of putting a small amount away. £3 a day will give you over £1,000 at the end of the year, so consider a small cut-back such as that coffee on the way to work.

Keep Your Savings Separate – spare change in your pocket and left over funds in your bank account will more likely get spent. Try and get your savings away from your everyday spending.

Get Interest On Your Savings – open an account specifically for saving, preferably with a decent interest rate and depending on how you want to use your savings, with either full access or long-term access to boost your interest rate or maintain flexibility to access them when you want.

Compare The Rates – remember to shop around. Your current bank may provide a good offer to current customers only but at the same time banks are focussed on new business, so new offers are generally the better on the market. If you aren’t going to go for a savings account then consider a separate current accounts for your bills etc to keep the money separate.

Setup A Standing Order – get regular payments going between your accounts to ensure that there is a constant flow of cash going into your savings account. This also means that you are less likely to forget to move money, as well as not focussing on it every day. When you check your savings balance you’ll be pleasantly surprised!

Save When You’re Paid – set aside your savings as soon as you get paid – you will be less likely to miss the money. If you wait until the end of the month you’ll be thinking about other expenses and spending.

Check Your Tax Status – if your income is less than the lowest threshold then not only do you not pay income tax but you’ll also be exempt from tax on your savings. You can calculate if you qualify on the HMRC website and if you do qualify, you can fill in an R85 form when you open your savings account.

Emergency Contingencies – if you are saving to cover yourself from any emergencies, a good rule of thumb is to save for 3 months of expenses, so if you have £1,000 a month of expenditure, look to aim at £3,000 in total savings.

Follow Your Progress – Set yourself a target and measure your savings each month to track your progress. It will encourage you to succeed.

 

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