Determine why you want to increase your savings
Having a clear goal in mind when you’re saving money makes it far easier to stick to your plans. Are you saving for a car or a big family vacation? Do you want to redecorate your house or pay off your student loans faster? Figure out what your goal is and write it down. You can then display that goal somewhere in your home so that you can be regularly reminded.
Set up a separate savings account
Having a separate bank account for your savings is important if you want to reach your goal. You’ll find it easier to track your progress and keep your money separated this way. Additionally, you could get better interest on your savings by shopping around for a high-yield savings account. You might also consider investing in stocks and shares with an ISA so that you get the highest payback possible from your savings.
Review last month’s spending
The next step is to print off your bank statements and carefully review your monthly spending. Categorise your spending into categories such as bills, household essentials, entertainment, groceries, transport, memberships and so on. You can then go through each of these categories and make note of areas where you could be saving money.
Set monthly goals
You have your yearly goal ready. Now it’s time to set achievable, monthly goals. When saving money, you’ll need to do one or both of the following: reduce your spending and increase your income. When it comes to reducing your spending, go back to those categories you set up and pinpoint where you could be saving. For example, you could switch smartphone plans, cut back on takeout food or meals out, cancel a TV subscription you’re not using, or even change your energy provider.
As for increasing income, this might be difficult if you already have a full-time job and there’s no chance of getting a raise. Luckily, there are ways you can make money online, such as filling out surveys, completing admin tasks, or freelancing. This list of the best websites to make money online is a good place to start.
Set up transfers to your savings account
It’s an obvious tip, but you’ll need to regularly transfer money into your savings account if you want to save. For this you have two options, you could set up automatic transfers or manually transfer money every month. Automatic transfers are great as you don’t need to think about your savings as much as the money will automatically come out of your monthly budget. Manual transfers are more flexible, so during months when you save a bit more money you can send more money into savings while during more expensive months you can send a smaller amount.
Celebrate your successes
The end goal of increasing your yearly savings will be a huge milestone, but it’s important to celebrate along the way too. Treat yourself at regular stages of your saving journey, perhaps taking some inspiration from this list of ways to treat yourself for free.