If you have debt like i do, then the concept of saving can seem like an alien one. A thing to do should you ever be free of debt, and not a moment before. But there are still different ways to save even if you have creditors to pay each month. We took a look at some of the best methods.
Giving yourself a challenge is the key to making something work for a large number of people. At the end of each day, empty your handbag and deposit all of your change in the savings jar.
Save 1p on the first day, 2p on the second, and 3p on the third. This adds up to almost £650 per year, although it becomes increasingly difficult later. Many individuals choose to print out a chart, then save and mark off what’s left in their purse each day. Alternatively, don’t set target,s but just put loose change in a jar.
I did this for all change up to an including 10ps, and amazingly last year cashed in over £140! Unfortunately, the events of the past 18 months has seen society move more towards a cashless system. Thus, this may be harder and less rewarding to do in the future.
Many banks, including Lloyds, TSB, Halifax, Monzo, and Starling, allow you to round up debit card payments to the closest pound and deposit the difference into a savings account.
Halifax and Lloyd’s Save the Change are two examples. You can’t tell how much money you’ll save with these, but if you use your card frequently, it might add up to a significant sum.
If your bank doesn’t have this feature, you can use the Plum savings app. Plum is best known for its “hidden savings,” as shown below, but round-ups are a new feature.
Every day, you check your bank account and, if it shows £156.45, you “skim” the 45p and put it into a savings account.
You can make it more difficult by rounding it down to the nearest £5, in this case shifting £1.45. Alternatively, round down to the closest tenner.
This is relatively little work if you check your bank app every day, and it can be satisfying to see how small amounts accumulate up.
This isn’t always the case, though. For some people, this is a bonus since it gives them a sense of control. Others discover that they forget or refuse to do it too frequently, and as a result, it does not work properly.
The first three methods all took modest amounts at random, assuming you wouldn’t notice.
Chip and Plum, two apps, adopt a more scientific approach. They keep track of your bank account and spending, comparing it to what you regularly spend and what you expect to pay in the future. They take a tiny amount . This might happen several times a month. If you are ahead for the month, and shift it to a savings account. You can instruct the apps to be more ambitious or cautious in their saving.
Many people find that saving money each month is relatively painless. If you’re unsure, give one a shot!
The government has established a savings programme for persons receiving Universal Credit or Working Tax Credit.
For four years, you can save anywhere from £1 to £50 every month, up to a maximum of £2,400.
Instead of interest, after two years, you will receive a very large bonus equal to 50% of the maximum amount you have saved during that time. So, if you had saved £300 after a year, had an emergency and had to withdraw £250, and then only managed to add £1, you would receive a £150 bonus.
You can either close the account with the bonus after two years or keep it open for another two years and receive another bonus.
This one only works if you have a lot of money to begin with. However, it quickly evaporates due to unforeseen clothing purchases, takeaways, and minicab rides, among other things.
It’s self-evident that refusing to purchase anything benefits your finances, but the difficulty is to turn “saving money” into genuine “savings.” When you decide not to buy something you might afford, pull out your phone and transfer the cash you “saved” to your savings account.
This way, the funds aren’t sitting in your account, waiting to be spent on something else.
People who prefer this choice report that shifting the money over gives them a psychological boost. It’s like giving yourself a big hug for being financially responsible.
When you have a large savings goal, it’s better to start putting money into your savings account as soon as you get paid.
You might simply wait until the end of the month to deposit any extra funds into your savings account. Some banks, such as HSBC and First Direct, will automatically set this up for you. However, if you set aside the money you want to save when you get paid, you are less inclined to spend it!
Don’t get carried away with your standing order. It’s depressing to strive to save too much and then have to deplete your money every month. It’s better to set aside a reasonable amount of money every month and then use the other methods listed above to supplement your savings at the end of the month.