2023 has not been an easy ride for anyone – financially it has been a struggle. The cost of living has very much risen, with little, to no proportionate increase to wages. And to add to that, there is much uncertainty in the global economy. So, as you prepare to enter 2024, I think it is about time to focus on ways to maximise your savings and really ramp up how much you can set aside. Whether it is for a rainy day, a big purchase or a retirement fund, there is no better time to start than now.
Here’s how:
Let budgets be your best friend
The key to saving as much as possible is to first spot where all your money is going in the first place. From here you can establish where you can make changes to turn your outgoings to incomings.
You can do this by using budget tracking tools or simply using your own basic spreadsheet template to note down and monitor your monthly transactions. Categorise those transactions into ‘leisure (entertainment activities)’, ‘food (weekly grocery shops)’, ‘housing (any house related spends)’ , ‘utilities (bills such as rent or electric)’ and ‘personal maintenance (nails, lashes, skincare) . As you spend and note down the amounts, you will start to see how your spending is split. It can be quite a surprising activity for sure!
Once you have noticed your activity, take a step back and ask yourself. Can I make any changes? Do I really need to spend X on entertainment each month? Or can I cut back in order to save more?
If you set yourself some goals from the budgeting activity you have done then you can implement some lifestyle changes such as shopping from Aldi rather than Waitrose in order to meet your newly set goal of £60 a week for groceries rather than £120.
Do you really need those subscriptions?
As you enter the new year, take a look at all of the subscriptions you are paying out that are up for renewal. Do you really need them all? How much are you using your Spotify account? Do you still need a premium account for YouTube?
Refresh your life, refresh your spend and refresh your activities. If you aren’t making the most use out of something, get rid of it – a tip in all aspects of life!
This could enable you to add that subscription money to your savings for the year instead. Every little really does help!
Opt for savings accounts with high interest rates
After many years of low interest rates, one benefit has come from the rocky ride of 2023…we experienced a comeback in higher interest rates! A benefit for savers. Providers of today are offering between 5.5% and 5.95% for a fixed-rate account.
So, when you open a savings account, you leave your money in the account whilst obtaining interest which is paid tax-free (the amount you can save tax free depends on the rate of tax you fall into). In other words, you get money on top of your savings, and for what…literally just putting it into the account!
To make the most of your savings and really maximise how much you can earn, opt for a fixed-rate account. For such accounts, the amount you will earn is set for a fixed period and rate. You are unable to access the funds during that time. However, the benefit is that the fixed rate tends to be higher than that of an easy access account. So, if you can afford to leave some money in an account without needing access, this really is a smart option!
Explore different current accounts
To maximise your return on smaller amounts of money you wish to put aside, open a current account. Not for all, but for some banks, their current account options have a higher rate of interest than a savings account. However, note that this is only really suitable for smaller amounts, below £5,000.
Do some research into different accounts, rates and benefits. MoneySavingExpert and MoneySuperMarket offer good tools and guidance.
Get automated
We all fall down the trap. When payday comes and your salary hits your bank account, it’s so tempting to go shopping and treat yourself, or go out for a meal to celebrate and splash the cash. Don’t get me wrong, it is great to do this after all, it’s your reward for the hard work. BUT, it’s time to get strict and hold the handle on the temptations a little…for your own good.
It’s as simple as setting up an automatic transfer so that every time you get paid, a set amount of your salary goes into a separate pot or into your savings account. That way, you know for sure you will have some money for a rainy day, and less to get lost in spending. If you saved £100 a month then just think, you will end the year with £1,200 more saved away. Isn’t that a great feeling?
Make it a challenge. Stick to it. It is so easy to set up too so you can’t really go wrong!
So, there you have it. Just a handful of options on what you can do to make 2024 your year for saving…no excuses, it’s all in your hands. This smart financial move could bring you closer to your financial goals and provide peace of mind in uncertain times. Happy saving!
In respect of the information above, this content is only for informational purposes and does not constitute any kind of financial advice.
