Saving money can be an incredibly difficult affair. No sooner have you transferred that cash into your savings account than you’re moving it straight back into your current account, so that you can head out for a night with your friends. Sure, you’re only doing it once though, aren’t you? However, there are many things that can get in the way of saving money, and it isn’t just your weak willpower when your friends remind you that ‘you only live once’ on the weekend. Here are 5 ways to actually build up a substantial amount of savings.
#1: Budget well
OK, so this is hardly rocket science, but budgeting properly is one way to ensure that you’re not splashing the cash left, right and center. Knowing that you have a certain amount each month to spend on essentials and luxury items means that you’re likely to prioritize, and you won’t go overboard with your spending. Look into the budgeting apps out there if you want to make it as easy as possible.
#2: Round up purchases
There are many banks now that have developed easier ways to save, and one of these is ‘rounding up’ your purchases into a savings account. Let’s say that you spend $4.75 on a coffee or breakfast in the morning. The remaining quarter would be taken out of your current account, and put into your savings account. Before you know it, you’ve saved a lot of cash just by rounding up your purchases!
#3: Get the best savings account
Of course, we all know that there are many different types of savings accounts out there. However, cutting through the jargon can be difficult, and if you’re not well-seasoned in the world of finance then it can be a stressful experience. Check out Investments Explained if you’re not sure what the best account for you is, but generally look for high interest accounts, with flexibility over access.
#4: Have a goal in mind
Saving money is a lot easier when you have a goal in mind. Think about what you’re saving up for, and name your savings account after this. For example, seeing ‘Bali trip’ or ‘wedding’ on your account will remind you why you can’t just transfer all of the money back to your current bank, and it will really motivate you to keep going when it’s tough. Picturing yourself lying on the beach should make it a little easier!
#5: Reassess your spending
Whilst we always consider how we could put some money away for a rainy day, we rarely consider where we are overspending right now. For example, could you cut that morning coffee from Starbucks out and take a flask instead? Could you go a brand down in your shopping on some items, if the quality and taste is the same? These are small changes, but they make a big difference to your savings in the long-run.
Good luck building up the savings that you need and want for the future!