You may have been contemplating starting to save for some time, and could have even opened a savings account, only to find yourself dipping into it regularly. If saving has been an unachievable goal for you so far, take a look at these tips which will help you change your habits to secure funds for those rainy days.
Keep tabs of your spending
Sounds obvious, doesn’t it, but by keeping a record of expenditure on a spreadsheet, you are more likely to take note of what money is leaving your account and what excess cash you really have. Begin with establishing all of your income from yourself, and your partner, if you have one, then note all regular bills such as rent, utilities, car expenses, or travel costs, food, childcare, clothing, credit card bills, and your child’s extra-curricular activities. Seeing all the money that is taken from your income in black and white can be quite shocking, and it could also make you more aware of how much you are relying on credit to get by each month. By establishing the necessary expenditure before you have even begun to assess how much you spend on entertainment and days out, you will be far more likely to cut down on unnecessary leisure spending.
You need to be serious about saving for this to work. Once you have expenditure spreadsheets in front of you, realistically assess how you can make cut backs. Are you spending too much on clothing each month? Can you carpool with other parents taking your child to school and you returning the favour? Are you buying your lunch at work rather than taking a pre-packed lunch with you? If you have a smoking habit, now is the time to quit, and as research quoted in an article on Capitalotc.Com states, nothing beats money as an incentive to stop smoking. All these factors can impact your spending massively, so be brutal and cut out any excess spending, no matter how small it seems, as a little spending each day equates to a lot of spending each month.
Pay off your debts
There is a lot of preparation before even considering saving, and clearing any outstanding debts is a priority. There is no point in having savings in the bank when you have debts hanging over your head, so get these cleared first. Once you have eradicated the excess spending mentioned above, you can pay more toward repayments which will speed up the amount of time it takes to clear any loans or credit card bills.
Choose a savings account
It is all too easy to access money that is saved at home, and although you will be able to see clearly how much are saving, you won’t be accruing any interest. Set up a standing order from your normal account so that a portion of your salary goes directly into a savings account each week or monthly. Use a site like My Bank Tracker to decide which bank account would best suit your needs.
Although it may seem a difficult process at first, you will be glad you changed your habits once you see just how much you can save.