How to start saving for the future

We love to treat ourselves once in a while, whether it’s the handbag we have wanted or splash out on our dream holiday, but what about the future?

In the last tax year, 14.6 million ISAs were opened, which means that 15.4 million taxpayers didn’t open an account and missed out on building on their savings.

Follow our guide to find out how you can save for the future, so you can enjoy the finer things in life without breaking the bank.

Budget

Check how much money you get each month and begin making a list of all your outgoings. Whether it’s the dreaded bills or a payment instalment for a big purchase, make a note how much each thing costs until you’re left with your disposable income.

Break down your income by dividing it by four (if you are paid monthly) to give you the amount you can spend on a weekly basis.

Once you have deducted food and other things you consider ‘essentials’, any money you have left you can be put into savings.

Be realistic

Make sure the money you want to put away is a comfortable figure financially. If you over estimate how much you want to save each month, you could find yourself dipping into what you’ve put aside and feel tempted to spend all of it.

Of course there are times we all have to dig deep to fund for unexpected bills, such as paying excess on your car insurance following an accident or footing the cost of property maintenance. If this should happen, only see it as a minor setback.

Set your own goal

If you’re looking to save for a big holiday, wedding or the ultimate shopping binge set yourself a savings target over a certain amount of time.

Whether you’re hoping to save £100 or £1,000, calculate how much you can put aside and work out how many months it will take to reach your goal.

Working towards something can make you feel more in control of your finances and you’ll reap the rewards once you’ve reached it.

Don’t touch!

No matter how tempting it is to go on a spending spree, try to distract yourself from touching your savings.

That handbag you’ve seen in the shop window or the game console that has just come out will more than likely still be there when you’ve built your savings pot. If it isn’t, you never needed it anyway.

Avoid using your debit card

It’s always easy to pay small amounts on the debit card, but this can prove to be costly if you frequently do it.

Try and pay with cash as much as you can, so you can see exactly what you’re spending. If you feel uncomfortable carrying a large amount of cash with you for a necessary big purchase, pay using your card but keep the receipts to remind you how much you spent.

Also check to make sure you’re withdrawing your money from a free ATM.  Avoid expensive fees that are incurred on some machines as this is can really add up.

Look for the right savings account or ISA

To boost your savings even further, shop around for the latest interest rates and deals that UK banking providers are offering on their savings and ISA products.

By keeping your finances in an account where you can earn interest, you’ll be saving more than you put in, meaning you can reach your goal sooner.

If you want to be really strict on yourself, choose a fixed-rate ISA account that doesn’t let you withdraw any money for an agreed period of time.

For savers who have a little bit more will power, easy access ISAs let you withdraw any money you have put in. Only withdraw money if you’re really need it, otherwise you may find you don’t qualify for the interest.

Finally, think of the things you could do with your savings!

We all love to think of the things we would buy if we won the lottery, but think about the things you could do with the money you save.

Treat yourself to a luxury holiday abroad, buy that fancy car, a deposit on your dream home or just carry on building on your savings. Whatever you decide, saving money can help you feel secure financially. 


Category: Money

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