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Like many people in the UK, one thing I struggled with for quite a while was:
- Saving money.
- Keeping the money I've saved kept tucked away.
Over the past year I have developed a few little ways that are effective for me, and if you are reading this article, then hopefully my tactics will help you.
So why do I need savings? Everybody needs savings for one reason or another. You're saving up for a holiday or a new car. But whatever the reason, it's important to have a safety net.
For myself I've been saving for a deposit on my house to get my first mortgage. I have been saving money for the past year but a few things have got in the way of my ultimate goal. So what did I do to change that?
Fortunately for me I'm one of the rarities that have a salary but are paid weekly, which to me, is easier to save.
The first thing I did was I looked at my spendings. Yes I know everyone says to do it but I mean take a look. Really take a look at what you spend. Get your most recent bank statement and go through every transaction. You would be surprised what you find. For me I found out that I spend a lot of money on food. I can go out shopping and turn my nose up at a new pair of trainers or a new jacket or a new game etc. But what I can't do is go for lunch and not buy the whole restaurant. I'm the type of person that orders a burger for £5, which isn't bad, until I add 10 extra toppings for a pound each.
And it's not just when I go out. I can easily without releasing buy food for my lunch at work when I could easily of made it at home to take with me. So step 1 for me was eliminating my biggest cost, which on an added bonus, has made me eat healthier as well.
Step 2 was taking savings out of my hand. Each payday I would sit down and say I will save x amount this time. Now I have set up a standing order. So just like a bill when payday comes around I instantly have the money come out of my account and you learn to live with it, like I said, just like a bill. And then surprisingly your life adapts around this.
Now you would think that these two steps alone would be effective. We have eliminated expenditure and have a savings plan in place. So let me ask myself the question. Did this work? NO. Well technically yes. But let me explain.
The savings side of it works fine. So why don't I have the deposit for my house yet? Because other things get in the way and that's when it clicked. Whenever I needed to do emergency spending or something went wrong with the car, it would come out the savings. Many of you are probably thinking, "Isn't that the idea of savings?" Well yes it is. But not when you are aiming for one thing in specific.
So how did I battle this? I opened a second savings account and I set up another standing order for just 25 pounds a week, which really isn't a lot, but what that means is whenever I need to spend a little money I have a separate stash that won't take away from what I'm reaching towards.
I hope that this article can help some of you out there to get closer to your dreams, whether it be that new car or new home.