How to save successfully | The Financial Wellbeing Forum

• How to save successfully | The Financial Wellbeing Forum How to save successfully, even if you’re not a ‘saver’ by Clare Seal | Nov 11, 2020 | Articles , Saving Practical *This article is not sponsored, but contains a referral link For many of us, the coronavirus pandemic has highlighted the importance of having a financial safety net. We were hit with something completely new and unexpected, with no control over how it would affect our lives or financial wellbeing. Some people found themselves better off, with travelling to work no longer necessary, and socialising off the cards, while others saw their income reduced, or lost it all together. It exposed the financial precariousness that many of us live with; just about scraping by from month to month, overstretched by our outgoings. I spent much of adult life trying and failing for a multitude of things, which is part of the reason I accrued so much debt. I would transfer money to a savings account at the start of the month, but living without a budget meant that I would need to transfer it back by mid- month in order to get by. I genuinely had no idea how other people managed to have money left to save at the end of the month, and at one point I had resigned myself to never being able to save successfully. As I started to re-evaluate my relationship with money, I realised that my saving behaviour was almost as damaging to my financial wellbeing and confidence as my spending was. I was consistently setting myself up for failure – setting targets that were far too ambitious, but with no actual plan to get there. No wonder I was feeling disheartened. Here are a few ways that you can make saving easier, even if it doesn’t come naturally to you, or if you’ve struggled in the past: Have a (realistic) goal Goal-setting is really important for motivating yourself, so don’t skip this step. Think about what you want your savings to do for you, how much you’ll need, and then set a target and a time frame accordingly. Give your savings a purpose Saving in one big, homologous blob is not necessarily the best way to ensure that you meet your target. You might have several savings goals on the go at once – for example, an emergency fund, a holiday fund and savings for something big like a house deposit – and if that’s the case, it makes sense to have a separate savings account for each of them. Especially because the levels of access or growth you want will depend on how soon you’re going to need the money, or how much you’re aiming to save. You may have seen these designated ‘pots’ of money referred to as sinking funds before. Live with a budget Not having a budget that works for you can be lethal for your saving intentions. Until you know what’s coming in, what’s going out and what you’re planning for the remainder, it’s very difficult to know how much you can afford to save, and you may end up ‘yo-yo saving’. Even if the amount you can afford to save is only small, it will grow over time, and you’ll soon find yourself proud of how much you’ve managed to set aside, not to mention more financially secure. Not sure how to budget? Check out our budgeting content. Pay yourself first Once you’ve worked out how much you’re going to save, it’s a good idea to set up a standing order to your savings account(s) on the day that you get paid, or on the same day each month, to ensure that you don’t fall into a habit of just saving ‘whatever’s left’. Use digital tools If you struggle to save, the new generation of digital tools available can be a great help. Automating your savings with an app like Plum *, Chip or Moneybox can gradually build savings by siphoning off small amounts of money every few days. Monitor your progress Sometimes saving even a relatively small amount can feel like a bit of a slog, but I find that keeping tabs and monitoring my progress in a very visual way is motivating. I’m a big fan of a super-simple method, where you draw a 10 x 10 grid, and colour in a square each time you’ve saved 1% of your goal. So, if your goal was £500, you would colour in an extra square each time you add £5 to your savings. Saving, like everything to do with money, is personal. The method and amount that feels right for you will depend on your own goals and circumstances, so don’t measure your progress by anybody else’s yardstick. *This is a referral link. I earn £5 for each successful referral.

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