When it comes to saving, we Brits are terrible at it, putting aside less than 5% of our income on average.
If you never saw the point of saving, or you've got out of the habit over the years, don't worry, it's easy to get started. These straightforward tips will get you back on track and help you build up your nest egg in no time at all.
1. Pay off expensive debt first
It may sound counterintuitive, but repaying debt before starting to save makes sound financial sense. UK savings interest rates are at record lows - meaning that if you have high-interest debt like credit cards, loans or store cards, any interest you make on saved money will be more than outweighed by the interest you'll have to pay on your borrowings.
So, pay off your debt first, get a clean slate and save yourself high interest repayments.
2. Set yourself clear targets
Let's face it; saving is hardly exhilarating. It's easier (and more fun) to spend money. So, reposition your savings strategy by concentrating on the reasons why you're saving. Think about what you'll be able to afford if you have some money in the bank.
- Make a list of things you'd be able to do if you had savings - from taking a well-deserved holiday to putting a deposit on a car, starting a business venture or even retiring earlier.
- Put them in order of which you want to save for first.
- Research how much you'll need to save to achieve it, and place a deadline on when you hope to meet that target. Saving apps are a great way to keep you on track.
3. Cut back on unnecessary spending
We often spend on little indulgences without really thinking about it - treating ourselves to a takeaway after a bad day, or putting tempting groceries we don't need into our trolley because they're on offer.
But this can lead to your money 'trickling away', without you really noticing. By cutting out a £2 coffee on your way to work every day, you could save almost £500 a year. Are there other expenses you could also cut back on?
If you don't have a clue where your money is going, use a budget calculator or a budgeting app to help you determine your daily outgoings. You'll soon get a handle on where your money is going.
4. Use a standing order to save
Even with the best intentions, we let ourselves down when we don't move money to our savings account. To help you stick to your goals, set up a standing order to do the transfer for you.
By setting up a regular payment to happen right after your salary hits your account, you'll hardly notice the missing funds - making it less painful than manually transferring money later in the month (when you're lower on cash).
So that's that: you now have everything you need to become a successful saver. Pat yourself on the back!
Article was made possible by site supporter David Bailey-Lauring, CEO of Blu Mint Digital