Written by: Cally Worden
It’s a proven fact that those who set themselves a specific savings goal are more likely to achieve their target than those who simply save willy-nilly. And seeing your savings balance creep upwards each month is the ideal incentive to keep going. The start of a new year is the perfect time to begin your savings quest, so start today and fulfil your 2015 dreams.
What is Your Goal?
Before you buy into the idea of saving, you will need to decide what your savings goal is. Perhaps it’s a foreign holiday, a new car, or a deposit for a new home. Or it may be that your target is something more modest, but no less important to you such as the pair of perfect shoes you’ve had your eye on for ages, or the latest techno-gadget. If you are new to saving then start small – you’ll reach your goal faster and be inspired to save again.
How Much can you Save?
The amount of money you direct each month towards your savings goal will depend on your disposable income, the size of your savings goal and how quickly you want to reach it. First, work out how much you can afford. Then decide how much of that cash you are prepared to give up each month and that will tell you how long it will take to achieve your goal.
Make it Happen
So you have set your goal and worked out your payment schedule – the next step is to put your plan into action. The most successful way to save is to make the payments into your savings account a foregone conclusion each month. Set up a standing order. If you don’t, you are more likely either to ‘forget’ a payment or be tempted to use the cash for something more immediate.
Help your Savings Grow
Choosing the right account for your savings is key to making your money work for you. Short-term savings goals are unlikely to yield much in the way of interest payments, as the money will simply not be in your account for long enough, so select an instant access account that pays as much interest as possible and leave it at that. For longer-term savings goals you may want to consider an ISA or an account with a termed deposit and, for those with a taste for a little risk, shares, bonds and funds may look attractive. If you are uncertain of the best way to make your money work for you, then talk to a financial advisor.
It can be hard to remain positive during a long-term savings plan – it can seem to take forever to reach your goal. But keep your eye on the target. You can help yourself remain inspired by counting down time to the achievement of your goal, or leaving yourself reminders of your target around – a photo of your desired holiday destination as your laptop wallpaper for example.