Who says saving money has to be boring? Discover fun and creative ways to build your savings in this blog.
Being a student or new to the working world can be tough on your wallet. But life is unpredictable and financial emergencies can crop up at any time, which is why it isn’t a good idea to consistently spend all of your money.
Saving can create a safety net for your future expenses as well as any unexpected needs. The more you save, the more peace of mind you’ll have because you’ll be better prepared for whatever life throws your way.
While saving money might not seem like the most exciting thing you could be doing, you might be surprised to know it can even boost your health*. Here are some approaches you can try.
Save a pound every day
You’re unlikely to miss one pound a day from your wallet. In today’s cashless world, you can make things easier by setting up a daily standing order from your current account to a savings account. Try this for a year for an easy £365 as a kickstart towards any savings goal.
Try the 52-week challenge
The 52-week challenge began online around 10 years ago, and has been gaining popularity ever since. This challenge is about increasing your saving amounts every week. Here’s how it’s done.
At the end of week one, save £1. Then at the end of week two, save £2, and at the end of week three, save £3 - and so on. Continue increasing the amount by £1 each week until week 52 (when you’ll be saving £52). This fun and different way to save will boost your savings by a massive £1,378 over a year.
Set a reminder on your phone each week to transfer the amount, and you can watch your savings increase weekly too.
Organise your belongings and find items to sell
It might take time and effort to organise items you haven’t used for a while, but if they’re in good condition, get selling. Try online marketplaces or find a car boot sale.
Do the no-spend month
Commit to not spending money on purchases that are an extra or a nice-to-have for one month. It could be your morning coffee, weekend takeaway or something else that isn’t an essential expense. You’ll not only save money, but you’ll also get a morale boost knowing you've stuck to the plan.
You can also try popping the cash you would have spent into a jar so you can see the amount of physical money you’ve saved by curbing your spending ever so slightly.
Save 1% of your monthly wage
Work out 1% of your monthly wage after deductions and set up a standing order for the amount to move into your savings account (if you’re a doctor and you receive uplifts from shift work, make things simple by using your basic pay).
If you set this up for the same day you’re paid, you’re less likely to miss the money. After six months see if you can stretch to 2% - or more!
You might find these two videos useful, where young doctors and dentists talk about how to survive and thrive financially as they enter the working world:
Consider accounts that help you save
When you’ve caught the saving bug, what are the options for where to put your money?
Banks have many different types of savings accounts available, from easy access to fixed notice (where you often get a higher rate but can’t get hold of your money instantly).
Think about your situation. If you’re comfortable with not needing to access your savings in an emergency, a fixed notice account may work for you, offering higher rates of interest as your money is locked in for a certain period.
Read through the small print as there could be upper limits on the amount you can deposit each month, as well as restrictions on when you make withdrawals.
Investing
Investing is another way to save your money and grow it at the same time. The best way to start is with an ISA, where you keep all the gains because they are tax-free.
There are a few different types of ISA, which is why it’s usually best to seek professional advice before you take your first steps. Investing can offer the opportunity for higher returns than saving, but it comes with risk and your investment could fall in value.
Please remember the value of investments, and any income** can go down as well as up and you may get back less than you invest.
** Where appropriate to the product
* How saving money could help your health
A new study suggests saving money regularly can even help improve sleep, which in turn could boost your mental and physical health.
Academics at Bristol University's Personal Finance Research Centre found that putting a monthly amount aside – however small the sum – helped people to relax and be more optimistic about the future. Those involved in the study said they felt less anxious about money, less likely to experience problem debt and better able to cope with unexpected events.
If you start your savings habit early, you could build up a healthy fund for personal goals – whether it’s for emergency spending, saving for a high-value item or paying off debt.