5 money habits to take up for the new year
Whether you’re a savvy saver or a super spender, follow these 5 tips to create habits that can boost savings and bolster your money management.
Habit 1: Know how much you have
By knowing how much you can spend you also find out how much you can save. These amounts will fluctuate over time so if you work your finances out each month, it’s easier to be in the know about your bills, spending and savings. It's quicker than you might think too. Creating a spreadsheet of your monthly incoming and outgoing cash and amending each month as you get paid is the easiest way to know exactly what you’ve got. For example, if your monthly incoming is £1,500 and your monthly bills are £900 you have £600 to save and spend.
Habit 2: Pay that savings bill
If you treat your savings account as a regular outgoing such as rent or the gas bill it becomes a lot more natural for those savings to start building up. Set up a standing order on your pay day that will automatically head into your chosen savings account without you having to think about it.
Habit 3: Start saving
First of all, set a goal or two. If you have something to aim for with your savings you’ll be more inclined to keep on top of them. Whether it’s financial security such as an emergency fund or a more emotional goal like a family holiday you’re more likely to stick to something if there’s a target in sight.
If saving into one big lump sum seems too daunting then smaller savings pots could be the way to go if you have specific things that you’re saving for. For example, you could have a pot at home specifically for buying gifts or an envelope tucked away safely for that new kitchen gadget you’ve been eyeing up.
Habit 4: Track your spending
To make sure you don’t dip into the red even when you’ve worked out your spending money for the month, keep that cash separate to your bills and savings. By having a separate account for ‘spending’ or even withdrawing a set amount each week, your spending money is kept safely away from the bills money and it’s easier to track how much you have left.
If you’re still finding that your spending money isn’t enough then it could be time to see what you’re spending that hard earned cash on. Check out our Saving Swaps to see where your everyday spending can be cut to make big savings (we’re talking over £2,000 a year!).
Habit 5: Round up
The process of ‘skimming’ your bank account or rounding up to the nearest pound is an easy way to get into the habit of smaller savings that add up over time. When you have ‘spare change’ in your bank account, wallet or purse - syphon it off into a savings account or jar and trick yourself it hasn’t happened! By thinking about savings as a gift to your future self and as a positive thing as opposed to money you can’t spend it’ll be easier to accept.
31% of 1,028 savers that we surveyed in October 2018 said that they thought they would be able to start saving on a regular basis within the next 12 months which is great news. From easy access savings accounts to the Lifetime ISA, use our website to get savings account savvy and find the best one for you.