Finding it hard to save, whats the best way?

BrookesAndrew

Hello there,

Recently I have been having quite a bit of trouble trying to save. I have a Santander account at the moment. I have just applied for an account with Lloyds TSB though because I do not like Santanders customer service in branch or over the phone. At the moment I have £394 in my current account. £0 in my savings account. I get paid on the 28th of each month so I get paid in around two weeks. By then I hope my Lloyds account will be open by then and I will ask for a savings account as well.

My outgoings at the moment are;

£294.50 - Rent (That might be going up soon to around £310).
£42 - Phone bill.
£5 - Phone insurance.
£100 - Food.

My incomings are;

£1028 - Pay (After tax).

My question is what should I do with the rest of the money. Where should I put it? Should I just put a certain amount of money in my ISA? Should I just let it build up in my current account? I think maybe I care about it to much and what I should do is just get on with it!

Any suggestions would be brilliant, thank you.:D

bigadaj

Best place for savings is currently current accounts as they pay higher interest than savings accounts.

The two banks you mention have good options, the other one is nationwide which pays 5% up to 2.5k.

The next good option for you might be regular savings accounts, they offer slightly higher rates but you can set up a direct debit or standing order and the money goes out before you notice it meaning you don't spend it.

Once you get around 5k saved then its worth thinking about Khmer things, could you save into a pension, will you be saving for a house deposit or putting moneys into isas.

[Deleted User]

BrookesAndrew wrote: »

Should I just let it build up in my current account? I think maybe I care about it to much and what I should do is just get on with it!

Ding ding ding.

There are many great ways to make your savings work for you with interest and investments, however none of that matters if you're not saving any money. Putting your money into an ISA is great when you're saving the most you can (because you're then making even more) but putting money into an ISA while you're wastefully spending is counter intuitive.

You probably need to first focus on your spending and reducing it (you're spending over £600 a month on things you don't need!) then once you've improved your ability to not be wasteful (through budgeting) consider what the best way to save is.

I went through the same thing by the way, most people do, trying to save while being wasteful will never work. Address your poor spending habits first, then saving will be easy.

Rob_192

Saving is all about your frame of mind. Don't worry too much in the short term about the account or interest rate, it's really not going to make much difference until you begin to build up some money, the important thing is training yourself to set something aside and then not dip into it.

I would always set aside something at the beginning of the month, rather than the common mistake of trying to save what's left at the end. Regular savers are a great way of doing this, because they usually atract a reasonable (if not very good) interest rate and you don't have the option of making any withdrawals. Pick a sum which is achievable and then set up a Direct Debit for this amount - treat it as another bill which must be paid each month and the pot will steadily grow in the backround.

R

JohnRo

Rob_192 wrote: »

Saving is all about your frame of mind.

I agree, it's really about self discipline and learning to be frugal, rather than just thinking about it. Uncomfortably so, in the short term, if that's what it takes to get to where you really want to be longer term.

It's not worth worrying too much about the best place for your money until you've got enough to worry about and have it rolling in. Personally I'd favour a regular contribution to a stocks and shares based monthly income plan of some sort but that's not advice and based more on my own ideology.

atush

42 for your phone sounds high, 100 a month on food sounds low.

I agree with Rob, you need to put some aside each month the DAY you get paid, by DD, and then try to not touch it. Set aside cash for spending/entertainment/leisure and DONT go over it.

If you dont know exactly where the money is going, start a spending diary. Every pound you spend you note down (do it on the expensive phone and move it to paper/spreadsheet end of every day) you'll soon find waste to cut out.

Once you get into a savings habit, then perhaps start a regular saver.

Join your work pension if they have one.

Archi_Bald

atush wrote: »

I agree with Rob, you need to put some aside each month the DAY you get paid, by DD,

I think you might mean SO rather than DD?

SliAbhaile

atush wrote: »

42 for your phone sounds high,

It's insane. Remember we used to live WITHOUT these things not long ago and if you must have one there are an awful lot better deals out there.

jimjames

Archi_Bald wrote: »

I think you might mean SO rather than DD?

Nope, I use DD to transfer money to my former Egg, now YBS savings account.

As above work out what you are spending your money on but put some money into savings automatically every month. Once it has gone then consider it unavailable to spend.

You may want to add other things to your spending list. Do you have a car? How do you get to work? Are there any other transport costs? Heating and electricity? Clothes? Socialising?

Small things can make a difference though - just cutting out one £2 coffee each day would be £40 per month in your savings account. All for "only" one coffee.

atush

Archi_Bald wrote: »

I think you might mean SO rather than DD?

Perhaps, but that is another bean to count.

atush

No one is mentioning Food. 25 a week is too low unless you cook every single thing yourself and don't eat much meat. Can't see this happening here.

I feel the OP is overspending on take out food incl lunch time sarnies? A huge way to save is to make sandwiches and bring with. And limiting TO to once per week.