Friday, 26 August 2016

Tips for Saving for that Special Purchase

Saving for a special purchase can be pretty hard when you have regular monthly outgoings and not a lot of money left over after everything has been paid out. However it is possible to save up for a treat without feeling like you are scrimping on other things.

Of course, a loan is an easy way to get the money you need to buy whatever it is you want or need. It's also a lot easier to get a loan even if you've been refused before; you can even ask someone to be a guarantor and check out guarantor loan specialists such as Glo. I'm not one for borrowing money though; I prefer to save up for the things I want as then you don't have to worry about being tied to a monthly payment for up to 5 years.

Here are some of my tips I use to help me save up money:

Make some cuts/changes

When starting a savings plan, it's best to look at your current outgoings and see if you can make any cuts or savings. For example, I looked at our Sky bill recently and we decided to see if we could reduce our package because we hardly ever watch TV. We called and ended up saving around £50 per month by changing different things and going on to new deals.

Set up a spreadsheet

Once you've looked at your outgoings and made any cuts or savings, set up a spreadsheet with a list of all your outgoings, how much they are and dates they go out. If you do this on Excel, you can input your total income per week or month, depending how frequently you are paid, and have it automatically deduct your outgoings, giving you a total remaining expenditure, This is such an easy way to keep track of everything and you can adjust things without having to redo the calculations so if you save money on a bill or you have a bit of extra income from overtime, you can type it in and you're good to go.

Set realistic goals

After you've worked out how much money you have left over after paying out everything you need to, set yourself a realistic and manageable goal for putting money away. I was always taught to put away at least 20% of my monthly salary into savings. If you total everything up and have around £500 left over then aim to put £100 of that into a savings account. Set up a standing order with your bank so that the money is automatically deducted from your salary when it is paid in. The important thing to remember though is to be realistic because if you put more than you can afford away, you run the risk of dipping into those savings and never being able to reach your savings goal.

Open a savings account

If you want something that you can pay into on a regular basis, you might find that you won't get much of a interest rate. Look at a cash ISA that allows you to save a specific amount in the tax year and you won't pay any tax on that money. You could also look at "online only" accounts that don't allow you to have a bank card for your account.

Round it down

Another thing I do to save a little bit extra is to round my current account balance down to the nearest pound and put the change into my savings account. It's amazing how quickly that couple of pound adds up in a month.

What tips do you have for savings for a special purchase?

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