The following are some very simple strategies you can put in place today that will have a positive impact on your finances.
We all want to see immediate results in whatever we put our efforts into but perhaps no more so than when it comes to boosting our finances. Money is earned, spent, invested and even gambled away but how much of your hard-earned money is being saved. Savings are vital whether it be for an unexpected bill, a holiday, a first mortgage, wedding…… the possibilities are endless.
No matter how hard you try it can seem like saving is an impossible task. Rent, credit card bills, rising costs of food and entertainment are all things that eat away at your budget every month. There is no doubt that with the numerous outgoings you have it can seem that there is just no way your budget has any room left for savings.
The following 5 simple ways to boost your finances, when implemented, will prove that you can save money. I will share these 5 simple steps and the easy ways in which you can implement each of them, which will help you save hundreds if not thousands every year. Imagine having enough money each year to take that holiday abroad or just have a little extra ‘under the mattress’ for a rainy day. You don’t need to use your imagination any longer, instead start by implementing these 5 simple strategies and begin your saving lifestyle today.
1. Pay Yourself First
It may sound strange and if you’re not used to saving it may even seem a little silly but stay with me it’s the number 1 strategy that works!
If you’re not already paying yourself first, then like most people who try to save you wait to see what little is left over at the end of the month to put aside. As a strategy this is the worst way to go about saving yet it is what many would be savers attempt to do. In the end most people fail to save the amount they hoped for or even anything at all. Let’s be honest we’ve all been there.
Paying yourself first as a strategy will change all this and instead set you up for successful saving. The whole concept of paying yourself first is very simple but will have some profound consequences for you. Firstly pick a realistic target amount to save each month and set it aside as soon you receive your pay check.
By doing this you have-
- Already achieved your financial savings target for the month.
- Created a mindset that you’re the most important person to pay each month.
- Mentally established saving as a priority.
This strategy works as it establishes saving as the number 1 priority for you and will help you decide which areas of your spending is necessary. You may even surprise yourself how quickly you learn to live on your pay check after setting aside your savings.
If you implement nothing else shared in this post today be sure to start paying yourself first, you won’t regret it.
This strategy leads us neatly on to my next top tip to boost your finances.
2. Keep Your Savings Safe From Yourself
The biggest threat to your savings doesn’t come fraudsters or bank robbers, yes you guessed right, it’s you that poses the greatest threat to your savings. This is especially true if you are prone to impulse buying. It can take months and even years to reach your financial goal only to see it disappear because of one poor decision through impulse buying.
Protecting your savings from yourself is a common-sense approach to boosting your finances through savings. There are several ways to do this and you can evaluate which is the best approach for you.
Open a Savings Account
The most obvious and commonly used method is to open a savings account. With this strategy your options are quite varied depending on your country of residence. Generally, it is a good idea to weight up interest rates and if the bank will charge monthly fees before picking a savings account. A good option is to choose a bank that offers a dedicated savings account with limited or no access to ATMs or cash cards. This way it makes it difficult to withdraw your savings on an impulse but will always be there available to you when really needed.
There are several options in the USA and UK that offer exactly this type of savings account with interest rates of up to 2.25% and no monthly fees.
It’s also worth considering a fixed rate savings account that will give you the option of a higher than average rate of interest. This will come with the condition that you do not touch your savings until it reaches maturity. This is a double win as it makes your savings work a little harder and protects your savings from yourself.
Open an ISA
In the UK there is another highly effective way of saving and protecting your money from yourself. This is an ISA or Individual Savings Account which gives UK residents tax free interest payments and a very effective way to save securely. ISAs come in a few different forms, such as cash ISAs, help to buy, stock and shares etc. One of special interest for savers is the Lifetime ISA, this allows savers to put away up to 4000 pounds each year which the UK government tops up by 25%.
Sounds awesome, right? However, it does come with several big conditions. We have already mentioned the limit of 4000 pounds annually. The big kicker is you cannot retrieve your savings until you turn 60 without incurring a 25% penalty! There are two further exceptions to this condition one being if you are diagnosed with a terminal illness and secondly when buying your first home. This makes a Lifetime ISA a very solid choice for saving to purchase your first home.
Save with Your Smartphone
New to the saving scene are money saving apps that allow users to save money from their smartphone.
With many different options out there, how you want to save and how much automation you want in your personal finances is up to you. More traditional style saving is available through apps such as Starling Bank and Monzo which allow users to open bank accounts and start saving all from your smartphone.
Other options include apps such as Qapital which allow users to set up a saving goal and automatically transfers savings from your bank account to a savings account. Similarly, an app called Chip monitors your spending and income through preapproved access to you bank account in order to work out an affordable amount which is automatically saved on your behalf.
Automatic saving bots could be right for you if you want to take the hassle out of budgeting.
Tip Yourself is a really good choice for those that wish to integrate their saving goals with other everyday goals such as going to the gym or getting up early. It works by linking directly with your bank account and allowing users to tip themselves at their own discretion with the tips going into a Tip Jar which acts as a separate savings account.
Tip Yourself is one example of a money saving app that can be a very effective way creating a healthy saving habit rather than a damaging spending habit. Turn your impulse buying into impulse saving!
3. Cash is King – Stick to a Budget With Cash
Switching to cash may not be something you think is very convenient or necessarily that good for saving. However, research shows that switching to cash over paying with cards results in significantly less spending.
The reasoning behind this is largely psychological as holding the cash in your hand and parting with it has a much greater meaning than tapping your bank card for contactless payment.
Of course, it is neither always convenient or safe to carry around large amounts of cash on your person yet carrying a small amount for everyday purchases can be a significant first step to reducing spending.
Leaving your cards at home on a night out or keeping one on your person for emergencies only can help stop yourself overspending. Try it yourself and see how paying in cash even on a night out can make you that little bit thriftier when it comes to splashing the cash.
4. Cancel Unused Subscriptions and Direct Debits
It’s amazing terrifying how much money is wasted on old and unused subscriptions that could otherwise be saved. You could be paying hundreds every year for subscriptions or in direct debits you don’t use or have forgotten about. If this is you, stop!
To begin with look at the subscriptions and direct debits you know you are paying for. Then ask yourself these two questions…
Do I use it? Is it worth it?
Unless you can honestly answer Yes to both these questions then take immediate action to cancel future payments.
The second thing to do is go through your outgoing payments in your bank account going back 12 months to ensure you cover any reoccurring annual payments. This task is made very simple using online banking.
Some of the most common outgoing payments people find are forgotten gym memberships, old cell phone insurance and digital subscriptions that auto-renew.
When you add up all these outgoings they can come to a pretty penny all of which are flushed down the drain. Don’t make the mistake of letting unused and old subscriptions drain your finances. Chose to boost your finances and start saving that money instead.
One caveat to all this is to check that you’re not in a contract before cancelling. Ending a contract midterm can sometimes prove more costly due to cancellation fees.
Use Cashback Sites / Banks
You’ve probably already heard of or even signed up to cashback sites such as Quidco, TopCashback or Swagbucks. But have you been using them consistently? As with saving money by setting it aside, using sites such as these is all about forming positive habits.
Join Cashback Websites
If you haven’t heard or used a cashback site before, we strongly advise that you give them a try. Basically, a cashback site works by providing links to retail sites which pay you cash back for a purchase when made via the cashback site.
If you do shopping online anyway why not take advantage of this simple way to save a little money and add it to your savings account.
Open Cashback Bank Account
Fancy saving money for paying monthly bills or spending on your debit card? Of course you do! Many banks are offering customers the chance to earn cashback on monthly utility and household bills. Some even offer cash back for using your debit card.
With household bills and debit card spending something everybody does anyway getting a little back from your bank is something worth considering. Many banks also offer further cash rewards when switching accounts to them. An extra bonus that might make switching to a cashback bank account even more profitable.
No matter what your saving for, implementing the strategies outlined above will set you on a path to successful saving. These 5 simple ways to boost your savings take very little time or technical ability, yet you will begin to see the positives results from very early on. A year from now, you will look back and be glad you took the time to follow these 5 simple steps today.