How to Increase your Savings

Many of us would like to have more savings available. There are great advantages to having money in a savings account. It means that we will be able to have some money to fall back on in an emergency and it also means that we can save up for items that are too expensive for us to buy immediately which may mean that will be able to avoid getting a loan for purposes such as this. It can be difficult to increase savings though.

Pay yourself first

Many people save by putting any money they have left at the end of the month into their savings account. Although this is better than not saving at all, it can mean that not so much money is saved. This because, as you check your balance during the month, you will see there is money there and you will spend it. So, by the time the end of the month comes, there may not be very much there. The idea of paying yourself first is that you will put money into a savings account at the start of the month. Then the money will not be available for you to spend and you will have to budget your purchases without using this money. You may still have money left at the end of the month and you can also put this in your savings account, but by paying yourself first, it should mean that you will be able to save up more quickly.

Compare prices

In order to have more money available to save, then paying less for what you are buying could help. To do this it is worth comparing the prices on everything that you buy and thinking about whether you feel that you are getting good value for money. This might mean that you will need to shop at different places so that you can buy cheaper products. It is easy to compare prices using online comparison sites so it should not be too much work for you. Comparing prices on things like insurance, utilities and things that we pay on contracts can also save a significant amount of money. It is worth looking at prices every year or so and then switching to cheaper companies if you can save a significant amount. You will often get exactly the same service but end up paying less. You may want to read reviews of companies and find out what other peoples experiences are so that you can decide whether you feel that you will be getting good value for money by swapping.

Buy Less

It may also be wise to buy less things which will leave us more money available to save. We often buy more things than we really need. Some will add a lot of value to our lives and we will feel that they are really worth it. However, we can sometimes buy things and then not really use them very much or perhaps not enjoy them that much. These items could probably be left unbought and we would not really notice much difference apart from having less clutter building up in our home.

Earn More

If we do not want to buy less and spend less or we are already spending a minimum amount then we will need to look at ways to earn more so that we will be able to save more. Or consider taking out a short term loan. This can seem pretty hard, but it may not be. If you want a lump sum of money to add to your savings, then selling things that we no longer need could be an option. You might be able to sell in a social media group or on an auction site or even at a car boot sale. There are a lot of options for you and it could mean that you will get a sum of money that you can pop into the savings account.

If you want a more regular increase in income then you will have to look into work. You may be able to increase your working hours or get a better paid job. It could be that you will be able to work some overtime or do a second job, perhaps evenings and weekends. You will also be able to pick up freelance work, temping or contract jobs that could help. Of course, it may be that you have family commitments and cannot easily work outside of the home. Even if this is the case, there are still options available to you. You could do some online work, for example or you might be able to rent out a room in your home or some attic space, for example. You may even be able to start a business where you could earn some money. There are a selection of options which could help.

How to set up a Successful Budget

We will often hear people say that we should set a budget so that we can afford the things that we need. This might be so that we can pay off a loan more easily, build up our savings or just make sure that you can cover all of your bills each month. However, there is more to setting a budget than some people think and it is important to make sure that you set one up that will work for you.

Decide on Goals

It is important to start with thinking why you are setting up this budget and what your goals are with regards to the budget. This will not only help you to set the budget up so that it fits in with this but it should also help to motivate you. It can even be good to write down these goals so that you can see them. Put them in a prominent place where you look at it each day, perhaps on a bathroom mirror or the door of the fridge so that you do not fee like the hard work seems pointless. Knowing why will help to spur you on each day, especially if you are feeling that you are not progressing well or that you are feeling deprived as a result.

Check out Current Situation

You then need to be aware of how your current finances are looking. You need to note down what sources of income you have such as salaries, income from shares, interest on savings, benefits and any other income that you get. Note down whether these are always the same and whether they are regular payments and this should allow to get an idea of the average amount of money that you have in each month. You also need to do the same with the money that you pay out. Some months will be dearer than others and averaging out across a year can give a general impression, but you do have to be careful with averaging as if one month is significantly dearer than it will be hard to manage if you have the same budget for every month.

Separate Luxuries from Essentials

It is also important to split up your payments out into luxuries and essentials. Firstly, look at all of the things that you have to pay for. This will include rent or mortgage, utility bills, loan repayments, insurance, contracts, fuel/transport to work, food and things like this. Luxuries will include things like holidays, entertainment, eating out and things that we do not need. It can be hard to put some items into one box or another, but it is wise to do so. Try to think about how much you need the things that you buy and whether you could go without them and this could help you to categorise it. 

Assign Budget

Once you have done this you are in a position to start thinking about how to assign your budget. You will need to start by making sure that all of your essentials are covered. Take this amount away form your earnings and see what is left. Then you can allocate what is left to different things. This is where you need to think about why you are budgeting. If you want to repay a loan, then you can use what is left towards this. If you want to save more you can put it into savings or whatever. However, it is worth leaving some money for yourself to spend on some luxuries. Going without all luxuries will be really difficult to do and you may find it very hard to stick to this for very long. Therefore, it can be much better to allow yourself a small budget to treat yourself with, even if it pays for a bottle of wine, a take away meal or a new pair of jeans, it can all make things feel a little easier. If you are just working on making ends meet, then you could potentially spend all the remaining budget on luxuries. However, it could be wise to put some into a savings account, even if it is just a little bit. This will allow you to be able to have some money to fall back on if you get an expensive month or an unexpected expense of some sort.

Every so often, perhaps yearly, it is important to review your budget. Prices will have gone up and so you may need to rethink things. If your income also goes up then you will have more money to allocate and you will need to decide where you are going to allocate it. You may decide you want a few more luxuries or that you want to save more or pay more off a loan if you have higher income. If prices have gone up then you may have to reduce your luxuries budget or cut back in other way.