Save up to £550 more per year with a savings goal

How to Save Money Effectively

Did you know that if you have a savings goal, it could help you save up to £550 more a year?

We all dream about wanting more in life – it’s part of the human condition. The good news is, with a bit of effort and a strategic approach to saving, these dreams could become a reality.

Working out an effective savings strategy is an important part of how to save money. It may sound 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 you have read these ‘how to save money tips’, go and work out those goals!

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.

You should also be aware that in some investment conditions and depending on the savings product you have chosen, you may get back less than you have paid in.

Source: Money Advice Service – accessed January 2017

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