Here at Smart Money Cymru, we’re all about helping you become more financially aware and confident, and to empower you. Having a savings account and contributing to it on a regular basis is one way to achieve that.
Why should you have a savings account in the first place?
Being financially confident means that you will become aware of your finances, and set aside money for a range of reasons. One such reason might be for emergency funds like the boiler breaking down, or perhaps setting up a slush fund so if you were out of work for a lengthy time, you have enough money saved to carry you through. Of course, savings accounts can also be for those rainy days, summer holidays and dream trips!
Putting money aside on a monthly basis as a part of your budget if a great way to confidently save, without putting pressure on your monthly costs. It also means you know you have money put aside, for your own financial wellbeing.
If you’re not sure how to get started, or you’ve struggled before – let us help. Here are 5 ways to get into the saving habit this year.
1. Pay off your debts
First thing first, and it may seem like an obvious one, but you should pay off any debts you have before you start to put money aside in a savings account. You are very unlikely to earn more interest on your savings than what you pay on your borrowings. Aim to pay off expensive debts like credit or store cards before you save.
2. Start small
Don’t feel like you have to instantly be putting huge amount of money away into a savings account. The most important thing is to create a habit. Did you know, just £2 a day will save you £730 over the year? That’s £14 a week!
It’s more important to make sure you budget well, and have room in your budget to put money into your savings.
3. Separate your savings
Temptation will be there if you keep your savings in your current account. We would highly recommend setting up a separate savings account to keep that money away from easy access. That’s not to say getting an account you can’t access, but by having the money in a different account, it won’t be as tempting to spend it. You can find out more about our Savings accounts here.
4. Earn interest on your savings
Depending on your reasons for opening a savings account, you can shop around for a good deal on your interest. Especially if you know you don’t want access to that account for example. What we would say though is, compare the dividend payouts from credit unions like us, to interest. Did you know that our dividend payout in 2020 was higher than most highstreet saving accounts?
5. Set up a standing order, or pay in after pay day
By far the best way to get started on your savings account is to commit to a standing order, or pay into your account the day after pay day!
We hope that these 5 tips help you get started with your new savings account today, and if you have any tips to add, we’d love to hear them! Don’t forget to follow us on social media for more tips, every week.