6 simple ways to boost your savings
A 7 minute read
Whether you’re looking to increase your disposable income, pay off any debts or just boost your savings, here are six easy ways to improve your finances, with just a little bit of effort:
1. Make your money work harder
Your money probably isn’t working as hard for you as it should. Let’s face it, we’ve been used to poor returns on savings accounts for so long, but with interest rates rising, there are better saving deals available for our money.
According to Coventry Building there’s a whopping £268 billion* sitting in easy and instant access accounts paying no interest. Time to act!
There are plenty of websites available that will do the legwork for you. Money saving Expert or Money Supermarket are just a couple. Once you find an account that you’re comfortable with, all you have to do is contact the provider and open it. Most of the time this can be done online.
Don’t forget that banks are still offering incentives to switch current accounts too. Some banks will pay you cash or vouchers worth up to £175 - £200 to switch your current account – extra money for minimal effort – yes please! Just be aware of the pros and cons before you do anything. For most people, switching bank accounts won’t make much difference but it can lower your credit score temporarily. The more frequently you switch, the more this can have a negative impact on your credit score.
2. Pay off expensive debts first
Before you start saving, it’s a good idea to try and get any expensive debt under control first —or to even pay it off completely. Most debt has high interest rates and usually cost more than savings, so tackling debt first is the most logical step.
If you have different debts, sort your credit card interest rates from highest to lowest, then tackle the card with the highest rate first. You can consolidate the debts – which means you merge a number of debts into one, usually by taking out a personal or consolidation loan but be careful to check the interest rate and the terms and conditions. Make sure that you won’t be adding to your debt or taking longer to pay it off.
To make a dent, you’ll need to pay off more than the minimum balance and if you find that you keep spending on your credit card it might be a good idea to destroy the card, so that you’re not tempted to use it again.
Remember, it’s good to talk, so if you’re worried about money or if you’re struggling financially, there’s lots of help available. We recommend Money Helper or a debt charity like StepChange.
3. Keep track of your spending
Sounds obvious but many of us aren’t fully aware of what we spend our money on. Take some time to review your outgoings – bills, weekly food shop, transport, etc. If you're serious about saving money, your monthly bills need to be the first place you look.
Writing down all of these expenditures can help you to work out where your money goes. Go through your bank accounts and track all of your subscriptions and direct debits. Once you’ve got a good handle on what you’re spending your money on, you can work out if you can make any savings.
Quite often, people have direct debits going out of their accounts for things they don’t even use, things like gym memberships, entertainment subscriptions, magazine subscriptions. If you’re not using them, why pay for them! Once you’ve been stricter with the pennies, have a look at what else you may be spending your money on – do you buy a daily coffee, takeaway lunch, snacks, newspaper/magazine? Can you cut back on any of these without sacrificing your lifestyle too much?
4. Make saving a priority
You may have heard of ‘Pay yourself first’ but what does it actually mean? Well, it’s a popular savings technique that helps you to prioritise paying your own savings first and treating saving like a bill that should be paid no matter what.
So, as soon as you get paid, you pay a portion of your salary into your savings account - like you would an essential bill.
To do this, you need to work out how much you have to spend on the essentials, like rent/mortgage, utilities, transport, groceries, etc and then work out how much income is left over. Your next priority is to allocate a proportion of this money to move into your savings. The remaining money is then yours to spend on what you like.
If you can arrange for money to go into your savings as a direct debit, then it’s much easier to get into the savings habit.
5. Find a side hustle
There’s plenty of options available to make some extra money on the side, which is probably why 5.2 million workers in the UK* now have a second job.
If you’re considering a side-hustle, it’s best to make it something you’re going to enjoy. Think about your hobbies or interests that you can tap into to earn a bit of extra income. Do you enjoy being around animals for example? Dog walking or a stable hand could be an enjoyable way to boost your income. Could you help young people flourish by becoming a tutor? Or do you have a talent for crafting or painting? You may be able to make some extra money by selling your creations online or through local businesses.
Whatever you decide to do, make sure you have enough time to manage it and that the money you earn is worth the loss of free time. If you already have a busy, stressful first job, adding a second job to the mix may not be right for you.
6. Check on benefits
A lot of people assume that they're not entitled to benefits and it’s a common misconception that benefits are only available if you’re out of work. You might be surprised at the help that is there once you start to delve a little deeper.
Even if you’re earning a high salary, you could still be eligible for some help, it all depends on your personal situation.
To make sure you’re not missing out, the website EntitledTo is a good place to start and you can also head to the Government's website to browse any financial support that may be available to you.
10 January 2023
* https://www.independent.co.uk/life-style/cost-of-living-second-jobs-b2176041.html
27 September 2022
DO NOT EDIT THIS BOX UNLESS YOU'RE NOEL
