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I spent much of my adult life trying and failing to save 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. I really believe that creating a clear path to better saving behaviour is something anyone can do, especially with the help of tools like Chip! Here’s our 6-week guide to creating new habits and a better saving mindset:
Week One: Set 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 what’s realistic. You can then set a target and time frame accordingly. It’s fine to set more than one goal – maybe you want to build your emergency fund and save for a holiday – but try not to set more than three, as you might find yourself feeling overwhelmed.
In the Chip app, you can set a goal with the amount, target date and and even a picture to keep you motivated.
Week Two: Give your savings a purpose
Saving in one big pot 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 pot 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, and you can create multiple pots with Chip.
Week Three: Get to grips with your 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’ – depositing more than you can afford and then needing to withdraw it again.
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.
Week Four: 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 Chip’s Pay Day Putaway feature to automate your payday saving and start this habit this week, just before pay day!
Week Five: Automate as much as possible
Keeping all of your financial and life admin balls in the air can be really difficult, and it’s easy to forget to transfer money to your savings even if you have the best intentions. Use an autosaving feature like Chip’s to save consistently – those small amounts really add up.
Week Six: 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.
Chip’s Goal feature lets you know if you’re on track to hit your target, which is a great way to stay motivated.
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.
Kick-start your savings and set better habits – you can get £20 straight into your savings when you sign up to Chip here.