3 Steps to Stress-Free Saving

Saving is an essential part of money management and yet all too many people fail to build their savings in a sensible way.

While putting money aside for the future may not be as exciting as going on holiday or buying expensive clothes, if you do it right, you won’t even notice the saving process as it happens.

Saving should always be approached in a methodical way so that you build your savings steadily without putting yourself under any financial stress.

While taking the Summer Savings Challenge is a great way to see where you can do better, regular savings should always form the foundation of your financial planning.

1) Create a Savings Account (or 2!)

Where you keep your savings is the first thing to deal with.

An ISA is usually one of the best ways to save as they usually offer higher interest rates than regular bank accounts.

You can also find ISAs that tie your money up for a set period of time in exchange for a higher interest rate.

This is great if you are willing to say goodbye to the cash you put in during that time but for many savers, access is more important.

If you are saving for a particular thing such as a holiday or a piece of furniture, you could also set up an account to save up for this.

Having separate accounts for separate things is useful as you can see exactly where you are up to with your savings. However, do be aware that you can only open 1 ISA per tax year.

2) Automate Your Savings

Once you have your saving account, you should automate the transfer of money each month.

Automating your savings takes the pressure off you to decide how much to put away each month. If you automate your savings to go out the day after payday, you probably won’t even have time to miss the money.

Before you set up your standing order, you need to set a reasonable sum to save.

Often, the 10% rule is applied here but really, any amount of savings is a good thing so don’t worry if 10% seems a little high!

As long as you are saving regularly and not stressing your finances, this is a good way to save.

And, as you progress in your career, you can always boost the amount going to savings accordingly.

3) Save Your Windfalls!  

One last part to stress-free saving is deciding what to do with your windfalls.

A windfall is a relatively large sum of money that comes unexpectedly and could be an inheritance or a lottery win.

While blowing a financial windfall is an exciting idea, the most sensible course of action is actually to look at your overall financial health and work from there.

For example, using a windfall to pay off your debts is an ideal way to sure up your overall financial health.

Putting a windfall into savings is also a good idea as the extra cash injection could give your interest rates a boost. Whatever you do, think it through carefully before spending it all at once!

Fancy checking out another post? Just click here!

Pin it!