There’s never been a better - or worse - time to start saving in the UK.
On the one hand, interest rates on savings accounts are stronger than they have been in years, which means there is an opportunity to earn some extra cash.
But then we are also in the middle of a cost of living crisis, with rising bills and expensive essentials taking their toll on our finances.
Last month, research from the Building Societies Association stated that one in seven UK adults have no savings at all, meaning 7.9 million people don't have a safety net if they get an unexpected bill.
Interestingly in that same report, a third of adults with no savings said they were confident that they could start a regular savings habit.
If this feels familiar, then maybe it’s time to kick start your savings journey today?
The good news is that you are in control of the savings and can determine a realistic savings budget - a small amount is all you need to get started.
Once you’ve made this resolution, it’s time to start tracking the savings as this will help to stay motivated or make necessary adjustments if your financial situation changes.
Once you’ve worked out a savings plan and understand how much you can realistically save each month, then it’s worth considering a savings account. Most current accounts offer little to no interest, whereas savings accounts can give you up to 8%.
It’s important to compare savings accounts and do your research to determine what type of account would work best. For example, regular savings accounts are offering the top interest rates but you’ll only be able to save a certain amount each month. Alternatively, an instant or easy access account will allow more flexibility and allow withdrawals and deposits when needed.
Once a savings account is set up, consider the motivation for saving. Is it purely for a rainy day fund? Or maybe to save up for a holiday next year. Once you have a goal in mind this will keep you on the right track for saving as you’ll be able to monitor progress.
You can also break down goals into smaller, more manageable milestones and don’t forget to celebrate achievements along the way.
One of the hardest things about saving is to keep the habit when we might be faced with temptations to spend. To avoid this, it’s worth setting up a monthly standing order to a savings account as soon as you’ve been paid.
This method means you are almost treating saving like a monthly bill and it’ll ensure you are saving a fixed amount regularly. It’s also a good way to know how much you are saving each month as the amount won’t change.
If you struggle to save, then an app might be able to help. There are plenty of apps available that are designed to keep track of savings and they can even sync with bank accounts and credit cards to illustrate your financial situation.
Many providers also offer their own saving tools within online banking. For example, set up a ‘round-up’ pot which automatically saves money whenever you spend. It’s also worth seeing if the bank has cashback offers, as this extra money can be transferred into savings.
By following the tips above, you should be tracking savings successfully. However, it’s also important to keep an eye on bank statements to ensure you are still budgeting effectively.
You might notice an unexpected bill or that you’ve been charged twice for something, and this could impact the savings journey. You can also identify areas where you might be overspending and this helps to realign with the budget.
Regular saving is all about finding a system that works for you, so it’s a good idea to try different savings strategies. If you are still struggling to save and end up overspending on luxuries, try opening a different account with a monthly spending allowance.
By separating the money this should keep you on the right track and soon your savings will grow.
As a trained journalist, Lucinda has spent the past 10 years writing and editing content for regional and national titles, including The Mirror, WalesOnline and Manchester Evening News. She is now a personal finance editor and specialises in savings, helping people to make confident financial decisions so they can save for what matters most.