The end of the year is the ideal time to make some financial resolutions for 2020. One of the most common resolutions, when it comes to personal finances, is to be a better saver for the year ahead. This sounds easy in theory, but can be harder to achieve in reality.
With that in mind, here are five simple tips to help you achieve your saving goals in 2020.
Have a concrete goal
It’s basic but often overlooked — you’re much more likely to shift your spending habits and get better at saving if you have something to aim at. While the particular goal is up to you, it could be a holiday, a new car, or some new clothes, make sure it’s clear and achievable.
Budget wisely
A budget is also important. That’s because it allows you to see where your money is going and then allocate more to saving and less to spending. Once you’ve examined your income and expenses, you’ll be in a position to know how much income you have to work with at any given time, which will help you to save more effectively in the future.
What also helps, when it comes to maximising your savings, is to look closely at your budget and figure out how much you spend on discretionary items like clothes, holidays and eating out to see where your expenses in these areas can be trimmed.
Analyse your expenses
While reducing expenses opens up more opportunity to save, so does some lateral thinking. For instance, it’s a good idea to keep on the lookout for cheaper deals when it comes to banking, insurance providers or memberships on things like gyms and streaming services.
It also pays to stay on the lookout for cheaper brands of clothing and food as well as savings on utilities, like power or water, by switching providers or using services off-peak.
Get out of debt
It’s simple — debt is not your friend if you’re trying to save. Indeed, you’ll be amazed how much easier saving is when you’re not fighting against spiralling debt.
If you’re in this boat, try and get across how the interest on your debt is calculated and when it’s charged as this can help you manage your repayments and avoid paying unnecessary interest. It’s also a good idea — if you have several debts – to try and pay off the debt with the highest rate of interest first.
Phone a friend!
Even for the most disciplined person saving can get difficult at times, especially with brands constantly trying to get you to open your wallet. That’s why it can help to team up with a family member, mate or colleague who’s also got a saving goal and work together.
Still, if you do have to go it alone, think about imposing some hard spending rules on yourself. For instance, when it comes to impulse buys, one option is to impose a 24-hour ban on splashing cash after it hits your account. If you impose such a “cooling-off” period on yourself, you may realise that what you wanted to buy was not so essential after all.
Additionally, think about taking some of the pressure off yourself by automating saving for next year. It’s easy to schedule a recurring amount of money to transfer from your transaction account to a linked savings account. Doing this can be a convenient way to keep money landing in your savings account on a regular basis.
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