Evidence suggests many Britons accept that they are “spenders,” rather than “savers.” One poll asking UK consumers about their spending habits found nearly one-third have never even focused on reducing expenses and saving more. The haphazard approach doesn’t adequately account for future spending needs, so it isn’t realistic to think you’ll get by without at least some financial reserves to fall back on. Sadly, however, even if dedicating more of your income to savings is a personal priority, it isn’t always easy to find money in your budget to make it happen.
If you wish you had more set aside for the future, yet your saving remains underfunded, it may be time to get creative with your approach. With so many demands tugging at your monthly earnings, simply opening a savings account isn’t enough to build a proper nest egg. Proactive measures are also required, in order to jump start savings strategies and develop good habits putting by savings for your future.
Try a Savings Challenge
Motivation is essential for staying on track with your savings. It takes a great deal more effort to buckle down and save, than it does to simply spend your whole paycheck and wait for the next one to arrive. If you’ve grown complacent about your responsibility to save, a personal savings challenge can help refocus our attention.
Creating a savings challenge turns the responsibility into a game, or a personal competition, pitting your frugal self against that part of you that can’t resist spending. Adding some fun and satisfaction to the savings process keeps you engaged and steady making contributions to your savings pot, however small. Without a challenge afoot, you may feel as though small sums saved are not worth the effort, but time is on your side; if you stick to the challenge, savings add up.
Lower the Cost of Servicing Your Debts
When you borrow money or use your credit card, the cost of financing adds to the overall price of items you buy. As your credit balances grow, so does the amount you pay to service the debt. Unless you quickly repay a debt, interest and fees continue to pile up, until the full balance is cleared.
Credit cards are among the worst offenders, because balances are often rolled over from month to month. Loans also incur interest, but when you take a short-term payday loan, the money’s quickly repaid, so the interest doesn’t keep on coming, like a credit card. Loans haven’t always been as convenient as reaching for your card, but now you can compare lending options online without leaving home.
If you’re serious about saving more, debt reduction represents a prime opportunity to reduce your monthly expense. For fast results, focus on your high-interest debt first, and then work your way through your balances with spending discipline. Settling your overdraft, as well as personal loans – even paying ahead on your mortgage, are all steps in the right direction.
Return to Paying Cash
As if your credit cards don’t inspire enough temptation to overspend, contactless payments now make it even easier to spend money you don’t have. If you’re losing ground in the battle against unnecessary spending, why not return to paying cash at the till.
Studies show UK shoppers overindulge when paying with bank cards, often spending more than they otherwise would. The psychology behind the phenomenon is not assigning a monetary value to the card, because it’s just a piece of plastic. Paying cash, on the other hand, re-establishes the connection between currency and consumption, which can help you get a handle on overspending.
Though many Britons are satisfied being spenders, not savers, other want more control of their financial outlook. If you’re among the latter group, these are only some of the worthwhile strategies yo can use to save more of your paycheck.