Managing our finances is something that takes up a significant portion of our daily lives. From organising our outgoings to keeping up with unexpected expenses, we must develop money management skills that ensure we are able to cover the essentials.
In fact, money management has been in the spotlight over the last few years. This is largely because of the ongoing cost-of-living crisis. This has meant many of us are trying to adjust to new ways of juggling our finances.
While accounting for rising costs is important, it’s also worth trying to set aside any money we can and put it towards our savings. Here, we look at why savings are helpful and how you can start saving.
Why is saving helpful?
Setting aside savings can seem tricky, especially right now when everything is expensive. However, if it’s possible to put some money in a savings pot once a month, you’ll be prepared for unexpected expenses.
You might need to replace your boiler, or your car needs costly repairs. These events can make a significant impact on your regular outgoings. But if you have some money set aside for unforeseen situations, you’re in a good position to resolve the issue without it impacting on your usual spending.
As well as being useful for emergencies, savings could be used for the school trip sprung on you at the last minute, for day trips with the kids during the school holidays. If you’re having a baby, savings could supplement maternity pay.
How to save
Whether you want to invest in a new car or you’re improving your credit score so that you can buy a house, extra savings up your sleeve could be useful.
- Pay off your debts
Before you start putting away money in a savings account, make sure you can pay off any outstanding debts first. This should be a priority as by not keeping up with repayments, you could find yourself in financial difficulty later down the line. Plus, it can negatively impact on your credit score.
Once you’ve paid off your debts, you can think about using that money that you were paying once a month for your savings pot.
- Work out your cashflow
Our outgoings have changed significantly in the last few years. We might not be in the workplace like we once were, therefore saving on the commute, but the cost of fuel for the car and train travel have gone up in price.
If you’re trying to save, look at your bank statements from the last six months and work out your income against your regular outgoings. This will show you how much you’re spending on things like food and bills. From there, you can see if you have any money left over at the end of the month to put towards savings.
- Start small
You don’t have to put hundreds away. Begin by putting away what you can and if you can increase this amount one month, pop the money into the pot.
- Choose a savings account
If you don’t have a savings account, shop around. There are different accounts on the market, and you can research the one that works for you.
- Spend mindfully
Can you get your weekly food shop cheaper elsewhere? Are there any offers or discount codes available? Look at cheaper alternatives and compare prices. This can go a long way towards helping you make savings.
How will you approach saving up?
