Getting into the habit of saving

Saving money is a bit like eating five pieces of fruit and veg a day – we all know it’s good for us, but it might not seem like a fun habit to get into.

Well, we’re here to help, with an easy four-step guide to why, what, where and how to save!

Step 1 – identify a goal

You might want to save just to have an emergency fund; for a medium-term purchase like a holiday, car or new phone; or for the long-term, such as buying a house or even retiring.

Whatever goal you choose, keeping it in mind will help you save: check out our advice on how to choose a savings goal and why it’s important.

Step 2 – work out how much you can save

Have you made a weekly or monthly budget to keep an eye on where all your money goes? If not, do that first – you can use our budget planner.

Once you’ve made a budget, it should be easier to spot ways to spend less, and to work out how much you have left once you’ve paid all your priority bills.

At this stage, it’s important to be realistic. If you currently get a takeaway every Friday night, you might think “I could save £100 every month if I stop getting takeaways!”…but that might be a tricky resolution to keep up.

Instead, what if you gave up just one takeaway a month, and put the difference into savings? It all adds up – and more importantly, you’ll be building a saving habit.

Step 3 – choose where to put your savings

If you’re giving up a precious treat, like a daily coffee or a weekly takeaway, you want to make sure you’re getting as much out of that money as you possibly can – right? So shop around! You can use comparison tools on sites like moneysupermarket.com to find the best savings account.

Step 4 – build your habit

• Move it! Once you’ve chosen a savings account and a sustainable amount to put in it every week or month, set up a standing order so it goes straight out of your current account when you get paid, before you’re tempted to spend it.
• Keep an eye on your money. The more often you check on your everyday spending, the less likely you are to overspend. And if you check on your savings account regularly, you’ll be motivated to keep adding to it – and you’re more likely to remember to switch accounts when a better interest rate becomes available. Switch to online banking to make it easier to keep tabs on your cash.

Good luck – and successful saving!