Advice On How To Save
Saving for a rainy day is something that many of us struggle to do, but by working on this, you will feel less stressed and worried about the future when you have funds that can tide you over. Many of our clients ask us for easy ways to save, and so we have put together some tips and tricks that you can use to get your finances looking healthier.
The first thing you need to do is understand the difference between short term and long term savings. Everyone should have savings, but splitting them into two groups can help you handle life in a more financially sustainable way.
Short term savings are typically used to provide back up when something needs to be repaired or replaced. It is accessible and will provide you with cash flow when you need a boost.
Long term savings are used to plan for the future rather than for an item. They should accrue over your working life and result in a nest egg that you can use in retirement or as an inheritance. These are the type of savings that many of us neglect!
Once you have understood the difference between savings types, you now need to set yourself some savings goals. Goals need to be achievable and logical to be successful. For example, you may decide that you want to save up to be able to retire early and so you will need to calculate the income you would need to make this a reality and then use that as your financial goal.
For short term savings, your goal needs to focus more on what you may need to cover as an emergency purchase or repair. One of the best goals for this is to save so that you have one full month’s income available at all times, meaning that you can dip into when you need to without disrupting your month. When you hit that goal, why not aim to double it and so on.
Making saving a habit will help to ensure that you are successful. By saving small amounts regularly, you will not notice the loss of money from your account and will learn to adapt to a lower income without even noticing.
It is also good to schedule additional savings payments to go out on payday as this is the day we often splurge when we really shouldn’t. By taking money out for savings on payday, you will have less to play with, which will help you to stop wasting money.
There are lots of different fun savings ideas out there that you can tailor to suit your needs. From saving a penny one day to two the next and so on or rounding up your purchases to put the spare change away – saving doesn’t need to be boring.
The other great thing about making saving fun is that if you have a partner or children, they can get involved too! Saving together towards a shared goal will not only motivate you more but bring you together in pursuit of something that everyone gets to enjoy.
If you are someone that sees spare cash and feels the need to spend it, then you need to take action! Avoid this negative response by having your savings account with a different bank to your current account. This way you won’t mistakenly see your savings balance every time you log in to internet banking.
If you are still unable to avoid temptation, then apply for a notice account instead. Notice accounts will only unlock with a specific number of days notices, meaning that instant gratification will be impossible to achieve. For larger sums of money, consider investments instead so that your money is tied up for a specific number of years and produces a decent return for you to enjoy.
If you need help to work out your finances, then getting some support is a great idea. You can opt for a financial adviser who will tell you what you could achieve when you save different levels of money. They will also be able to project the benefits of each saving solution they offer.
If you need help with the routine of saving or want motivation to help you get started then consider working with a life coach who can help you to work out what your goals are and the barriers that you are putting in the way. A coaching relationship is supportive, and you can look forward to being prompted to stick to the plans you make together.
It is clear that savings are important, but this does not always make it easy to do! Try some of our tips to get yourself saving properly and look forward to the sense of achievement you feel when you hit one of your savings goals.
As one of the UK’s leading coaches, Anoop Watts will help you to transform your business and your business acumen. Working together, you will develop and hone your skills as well as learning new ways to be successful. Anoop has many years of business experience and can support you to achieve the goals you have been dreaming of – get in touch today for a free consultation to find out more about what you can achieve with Anoop’s support.