How to reach your savings goals quicker
Published Thu, Mar 3, 2016 Updated Tue, Feb 16, 2021
Everyone wants to save some money. Whether it be for extra financial security or to put cash by for a big-money purchase, it’s good to know that you have some money set aside for the things you want in life.
This can be easier said than done though – with the cost of living at an all-time high and the effects of the economic downturn still having an impact on people’s wages, finding the extra cash to put away into savings can be a very difficult task.
However, there are a number of things you can do to help you reach your savings targets, however much you need…
How to save money fast
First things first, you need to make sure that you are disciplined with your spending habits. There’s no way that you’ll be able to put money aside if you spend every penny of spare cash on going out, clothes and gadgets. Make sure you set yourself on the right path and only buy something if you really need to get it. Any ‘luxury’ purchases will need to be considered in detail, rather than be bought on impulse if you are serious about reaching your savings target. So the next time something catches your eye in the shops, just leave it and go back the next day to see if that impulse to buy is still there.
It’s important to evaluate your monthly expenditure and see where you can make cutbacks to help save you more money. Go through your direct debits with a fine-tooth comb and see whether there is anything you are paying for which you no longer need. When you go grocery shopping, purchase the supermarket’s own products rather than the well-known brands – a lot of the products come from the exact same factory but they’re just packaged differently. Can you save on getting to work? Is the bus cheaper than driving, or are you able to walk? It may not seem like much at the time, but the savings really do stack up over the course of a month or year.
Make use of ISAs
For those wanting to put a large amount of money aside every year then an ISA is a must-have. New rules brought in by the government in the last budget mean that savers will be able to add £15,000, with the interest gained up to this amount completely tax-free. Previously there have been cash or stocks and share ISA’s, but now there will be just one type where both elements can be merged. You may also be able to find that you can significantly increase your interest rates by taking on a peer-to-peer lending scheme alongside your ISA. You can also choose from a Help to Buy ISA or a Lifetime ISA if you’re looking to buy a house.
Open a high-interest savings account
Alternatively, there are now a number of high-street bank accounts that offer fantastic interest rates of up to 6.00% on their everyday current accounts. These are potentially better for those who have a short-term savings goal, such as a deposit for a car or another high-ticket retail item where you will need to access your cash quicker. Usually the high-rates only last for the first year of opening the account, but don’t be afraid to keep switching bank accounts so you can enjoy the benefits to your savings.
It may sound like a daunting prospect, but in fact making an investment is relatively straightforward. Investors purchase stocks or shares from a company – a good place to start is by looking at the FTSE 100, which is the top grossing 100 companies in the UK at that time. These are usually a bit of a safer bet than smaller companies, though your return could potentially be higher if an unknown business suddenly hits the big time. Either way, investments are usually a better way to grow your money quickly in comparison to cash interest.