Regularly putting aside money can be the first step to mastering your personal finances. Having a clear target, even if small, can help build the discipline needed to reach any financial goal you set yourself.
Here are a few tips to get you started with your plan!
1. Understand your outgoings
If you don’t understand how you spend money at the moment it will be far harder to set anything aside to reach your goals. Set yourself up with a simple spreadsheet (psst, here is one you can download for free to help you get started) and keep track of what leaves your account monthly – everything from rent and travel, to groceries and entertainment, map it out to see what you can cut back on and what a realistic timescale would be to reach your target. Which brings me neatly onto…
2. Set a realistic target
As with any goal, if the target is unrealistic, chances are we won’t reach it and lose motivation along the way. Look at how much you normally spend and think about where you can realistically cut back in order to hit your savings target, and over what time. Remember to factor in occasions such as Christmas and Birthdays so you don’t find yourself with a larger outgoing than you anticipated.
3. Put it where you can’t touch it!
Tempted to dip in a little? Having the discipline to not touch the money you’re putting aside can be tricky, so remove that temptation altogether by putting it somewhere you won’t be able to. This doesn’t necessarily mean putting it into an account where you’ll be charged for taking some out, especially for shorter term savings, but moving the money into a separate savings account can stop you dipping in unless you really need to. If the account comes with a card, hide it! You won’t need it, you saving superstar!
4. Make it happen without you thinking about it
Automating savings can be a great way to ensure money gets put aside without having to even think about it. Set up a direct debit to move money into your savings account so you don’t have to manually move it each month. This way, not only will it definitely happen, but you won’t even have to see it. Instead you can just look at the nice growing figure in your savings account!
5. Remind yourself of the goal
Saving for a holiday? A car? A house? Remind yourself along the way the reasons why you are saving. Name your savings pot after your goal, include a picture if you can, at the very least, reference the direct debit you set up with your goal – New car, here we come!
6. Saving doesn’t mean misery
Setting a realistic goal means you can still factor in money for fun, it just means cutting back not going without. When setting up your savings goal, a little treat goes a long way to help motivation. Make sure you have money for entertainment and treats along the way, you’re far more likely to reach your goal if you can still do the things you love. And remember, little setbacks can happen, don’t let them put you off reaching your target – Pick yourself up, brush yourself down and get right back on that bike.
7. Save in groups
Did you know that saving in groups can increase your chance of success by 300%? Imagine training for a marathon alone, you drag yourself out of bed early, put on your running gear and open the front door to a cold wet day… Not the best motivator, now imagine you open that door but a group of mates are there ready to join you. See? Far more inviting. Social saving is a great way to work together to reach your goal. You can download the Squad App to start saving with friends, or if you’re looking to get on the property ladder, you could join StepLadder to work together to raise your property deposit.
No matter what your saving goal, big or small, getting into the regular habit of setting money aside is the perfect way to build the discipline needed to reach your financial goals. It may feel tough along the way, but reaching that goal will make the whole journey worth it!
Michaela is the Head of Communications at StepLadder and is passionate about helping people be at their best!