How we manage our finances is something we’ve always had to focus on. From organising our outgoings to keeping on top of additional payments, developing money management skills that work for your household is crucial.
However, money management has been in the spotlight lately. This is largely thanks to the ongoing cost-of-living crisis, which has meant many of us are rethinking how we balance our bills.
While we need to make sure we’re accounting for the rising cost of energy and food, it’s also important that we try to set aside any money we can in a savings pot. Here, we look at why saving up can help, along with the best methods to try.
Why is saving important?
Setting aside savings can be hugely beneficial later down the line. You might need emergency funds if your boiler breaks or your car needs repairs, for example. These unforeseen events can be a huge blow to your regular outgoings. However, if you have some money set aside for situations like this, you’re in a good position to resolve the issue without it affecting your standard payments.
You might also want to have a savings pot for things like school trips that are announced halfway through term, or for activities and day trips with the kids during the school holidays. Or if you’re having another baby, savings could supplement maternity pay. Alternatively, your savings could just be there so that you have money available for a summer getaway.
How to save
Once you’ve established why you want to start saving, you can think about how to improve your saving skills. Whether you want to invest in a new car or you’re building your credit score so you can get a mortgage, having some top saving skills up your sleeve can be useful.
- Work out your cashflow
Our outgoings will have changed significantly in the last few years. While many of us aren’t in the workplace as much as we once were, the cost of fuel for the car and train travel have gone up in price. Therefore, we’ve had to rethink what we’re spending our money on.
If you’re trying to save, start by taking your bank statements from the last six months and working out your income against your regular outgoings. This will show you how much you’re spending on things like food and bills.
- Create a budget
Once you know what your monthly cashflow looks like, you can establish a budget that works for your household. By having the figures in front of you, you can see how much you have left at the end of every month. Is it possible to set the leftover cash you have aside for your savings pot? If so, start putting this into your savings account.
- Choose a savings account
If you don’t have a savings account, shop around to see what’s available. There are different accounts on the market, and you can research the one that suits you.
- Spend mindfully
Is it possible to swap to a cheaper supermarket? Are there any offers or discount codes at the shores you shop at? Look at cheaper alternatives and compare prices before you buy as this could help you set aside the money you save on the weekly shop.
- Check your debts
Make sure you’re accounting for you repayments and look at when you’re likely to have paid off any outstanding debts. If you clear your debt, you could try putting the money that would be going towards your credit card or car finance bill, for example, into your savings.
Will you start saving up? What methods will you try?
