Working out a saving strategy sounds like a lot of effort, but it needn't be - put simply, it's about looking at what you want to achieve and setting yourself realistic targets. Here's how to do it in four easy steps.
Step 1: Set savings goals
Those who have savings goals save faster - up to £550 a year more than those who don't, according to the Money Advice Service. Establish what your short, mid and long-term personal financial goals are. Are you saving up for a new TV or a holiday, or do you want to put enough away for retirement or a child's university fees?
Step 2: What's your priority?
Next, rank your goals in order of importance and think about how long you'll need to be saving for them. Sometimes it helps to set an actual date for this, especially for shorter-term goals - then you have something tangible to work towards.
Step 3: Find the right savings plan
Now you've established what you want to save for, it's time to think about what savings plan might be best for you. Important things to bear in mind here are:
- Will you want to add regular payments to your savings?
- How quickly would you like your money back?
- How much do you hope to save?
- Can you afford to accept some risk, which could result in a higher (or lower) return?
- Do you have a lump sum to invest?
Step 4: Tips for success
- Whatever your savings plans, it's a good idea to have an emergency fund in place that you can access if you need to.
- Pay off any debts as quickly as you can, as these will be incurring interest.
- Write down your expenditure every day, or every week, for four to six weeks to find out where your money goes and where you can make savings. If you do this at the end of a month, you're more likely to miss something.
- Be realistic - if you can't realistically meet your goals, you'll get disheartened and you're more likely to give up completely.
Now, go and work out those goals!
Source: Money Advice Service - accessed January 2017