A lot of people struggle to save money, but it’s not that difficult and I’m going to show you why in this blog.
Tip number 1:
Make your savings automated. What do I mean by this? Well, you can use a standing order to transfer money from your current account to any account you want i.e. savings account. All you need to do is set thus up once and decide on what date the money will be transferred each month. By having it automated via standing order, it makes the whole effort side of saving money easier. This is because you don’t need to keep transferring the money each month, you don’t need to have the will or discipline each month because the standing order will do it automatically for you.
Most people fail at saving consistently because of this reason. So if you do this, you’re already a step ahead of everyone else.
Tip number 2:
Have different savings pots and name them. This strategy requires slightly more effort but it is very effective when followed through properly. So what I’d recommend is – set up several different savings accounts and give them all different names for different purposes. For example, have an account for holidays, have an account for Christmas presents/birthday presents. The younger you are the less pots you’ll need but the older you are you’ll probably have more pots.
The whole reason behind naming pots and separating them is that you are much less likely to dip in to the savings if each savings pot has a purpose and name. You’re not going to take money out of your holiday fund if you know its your holiday money, whereas if its just a pot of money with no name or purpose you’re much more likely to take money out of it.
Tip number 3:
Have several savings accounts spread across different banks. This is good for two reasons. One, Risk. The more spread out your banks are the better for risk. If one bank goes insolvent and you have all your accounts are in that bank, you’re only covered up to £85,000 per bank. So if you have the accounts spread across several banks, you’ll be covered up to £85,000 in each bank.
Reason two, if you have savings in another bank it becomes more of a faff to dip in to, so it acts as a deterrent.
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