Be a savvy saver
Develop a savings habit you don’t have to think about day to day and you’ll soon find it makes a positive difference to your funds.
For a special pair of shoes…
• Pick one type of change – £2 coins, £1 coins, or even just 20ps. Every few days empty your purse of this kind of coin and put any you find in a jar.
• Set aside daily savings you make: if you don’t go for a coffee after school drop off with friends, pop £1.50 in a jar; if you walk instead of taking the bus, in goes £2; if grandma babysits when you have a night out squirrel away £10 of what you’d have given a sitter.
For a new car
• Consider how much money you can afford to put away on a regular basis. Even if it’s just £50 or £100, create a standing order to move this money into a savings account at the start of each month. This automatic ‘sweep’ gives you a solid savings habit.
• Make sure you choose a sum that’s not too ambitious – you will be less tempted to cancel the arrangement when a big bill comes along.
For a rainy day
• Have some money tucked away for emergencies if you possibly can. Ideally this sum should be at least twice your total monthly financial commitment.
• Look for a savings account where you won’t be penalised for taking the money out at short notice – this will make you more confident putting in lump sums as and when you might get them, because you know that if you really must dip into it, you can.
Savvy tip
Savings accounts where you guarantee to add a certain minimum each month (even just £25) usually have better interest rates if you can commit to them over 12 months. A year might seem a long time, but set up a standing order and it’ll grow before you know it.
Pass it on – get help doing your sums
Before you decide if saving for your dream buy is really manageable, use an online budget calculator like this one on the BBC’s website.