Once all of the presents are bought and wrapped and the Christmas period is over, it’s time to look to the new year. The festive period can really make a dent in your finances, and depending on how ambitious your new year resolutions are, it’s good to get back to saving as soon as possible. If you’re saving for something big like a new car, house or even baby, it can seem like you’ll never get to your target. With some clever tricks and dedication, you can reach your target in no time. Logbook loan company, Auto Advance, have some great tips to help you along your way.
Spending too much
One of the major pitfalls of saving is spending too much money. If you haven’t got a strict budget and spend on too many frivolous things, it’s easy to fritter away money that would be better off being saved. Make sure your savings account is separate from your everyday spending account. This will ensure that you aren’t eating away at your savings. You can also get savings account which don’t have cards which makes it harder to access your hard saved cash!
After a long week at work you might feel like you deserve a treat but if you’re really serious about saving, it’s time to prioritise. Every time you find yourself reaching for the takeaway menu or buying a new pair of shoes, ask yourself if you really need them and think about what you are saving towards. It’s also important to have different savings set aside for any unexpected costs.
Not getting the best deals
If you are saving into a specific savings account, it’s always best to shop around every so often to make sure you’ve got the best deal. Some accounts charge you for using the service but there are plenty out there which can be used for free. You also need to check your interest rates to ensure you have getting the most out of your money. Sometimes, you could be better off with a bank account that specifically suits what you’re saving for. Such as Help to Buy ISAs if you’re looking to buy your first home.
Not knowing how much you need to save
The third and final savings pitfall is not knowing how much you need or what you’re saving for. It’s always great to have some money set aside but knowing exactly what you’re saving for can give you a boost in motivation. It will also give you a good idea of how much you actually need to reach your target.
Once you know how much you need, you can plan how long you want to save for and how much a month you can afford to put away. Set out exactly how much you have for bills, food, rent and any other everyday expenses and how much you can comfortably afford to save. This will help keep you focussed and you’ll know exactly when you can expect to have the money you need.