Get to grips with your finances
Independent financial expert Alvin Hall gives us his top tips for kickstarting a savings habit
Get a clear understanding of not only your incoming and outgoing, but the exact amount of money you need to live on each week or month. (These are your non-discretionary expenses.) You can only set up an effective saving plan if you have a totally realistic picture of where your money is going and how you use it.
Pinpoint opportunities for savings
Many people blame a lack of spare cash as the reason for not saving; however, there are always areas in which you can cut back. Make a list of your fixed outgoings, like utilities or insurance payments, and investigate where you can get better deals. Next, pinpoint any areas where you overspend– taxis, meals out, magazines. Take a look at the tips on this site about how to reduce these and other expenses and therefore save money. For example, instead of an expensive meal out, invite friends over and have each of them bring a dish.
Pay off your outstanding consumer debt
Before you start building a nest egg, make sure you are paying off any outstanding consumer debt. Always pay off debts with the highest APR first because these are costing you the most in interest charges.
Start saving
Having a clear goal can certainly improve your motivation to save. Some people are saving for major life events, such as such as a house deposit, wedding or retirement, whereas others have shorter term goals such as a holiday or a new car. If you don’t have a tangible goal, set yourself a weekly, monthly, or annual target amount to strive towards.
Set a goal
Having a clear goal can certainly improve your motivation to save. Some people are saving for major life events, such as such as a house deposit, wedding or retirement, whereas others have shorter term goals such as a holiday or a new car. If you don’t have a tangible goal, set yourself a weekly, monthly, or annual target amount to strive towards.
Review regularly
Our lives and financial situations don’t stay the same; they can change. You may get a better-paying job or you may get a pay rise or receive some inheritance. As a result you may be able to save more and want to take advantage of other products, such as term deposits or stock-market-related investments. When you are making your decision, always be aware of your risk tolerance. Extra tip – Always make use of tax efficient products, such as cash or investment ISAs.