Saving for beginners

Bookowl

hi
I would like to begin saving, - I know I'm late to the party with it being half way through the year. I've begun by cutting my unnecessary subscriptions - Amazon prime, music and video and found cheaper ways to get the books I like through eqireader. I've also started to meal plan which means im not eating out at work.

On the forum I've seen things like save £12k in 2019- where do I begin with something like that? I realise that target might be unrealistic given were half way through the year. Also - I get paid weekly so would be looking to save on a weekly basis.

any tips would be most appreciated!

benbay001

Whats the purpose of your saving? Its very easy to get side tracked if you have no real goal.

Bookowl

I've an unexpected bill of a few few k to take care off first. I'm half way there- but need to save for the other half with a bit of a buffer for peace of mind and comfort. I'd like to save for this but still live and do the things I enjoy - reading, exercise and cook nice food.

Bookowl

or would an interest free credit card be better for these costs - to pay it off over a longer period?

Apodemus

Well done for realising that you need to save - it’s never too late to start! And if “half way through the year” is an issue for you, just switch to the financial year, where it is not yet two months in!

I’m also with you on the need to get rid of the existing bill first. And how quickly you do that depends how extreme you want to be. In your shoes, I would treat it as a crisis, get into that Dunkirk mentality and hit it hard.

For the longer term, though, you need to tackle the concept of the “unexpected bill”. In the vast majority of cases, what we think of as unexpected bills are entirely foreseeable - perhaps not the specific details, but the certainty that these will arise and need to be planned for.

Goudy

I came to saving pretty late as well, but don't let that hold you back.

You have started quite positively with your meal plans and cutting subscriptions, what about scrutinizing the rest of your bills?
There are some tools to help you study your out goings, try filling in a "statement of affairs", this should help you identify what you pay out to who and which you might be able to reduce.
Can you get better deals on phone, broadband, energy and the likes?

When you make these savings, sweep them into Regular Saver accounts.
It might be worth your while switching (or just opening a new) current account to one with a RS account attached which pays a decent rate.
5% RS's are pretty common and you might bag a switch bonus on the way.

There's no getting away from the fact most save better if they are saving for something, these goals motivate.
Even if you haven't anything specific, plan what you'd like to do once you build up a nice pot in your RS accounts, something like buying some Premium Bonds, sticking it in a Fixed Rate account, investing or better still a mixture of all, but don't forget to carry on with your regular savings to build up your next pot.

Don't over stretch yourself with savings to start with, you'll get frustrated and more than likely start dipping into it.
Save your reductions first and then perhaps sweep a percentage of what you have left at the end of each week/month.
This works well for all those little saving you make during the week/month.

I set a bit of a buffer limit on my current account, so anything over that get swept up as an extra bonus at the end of each month. If I don't have any over, I don't get frustrated as I'm already saved what I planned. If I have to dip below it due to an unexpected expense I know I can work it back up again over time and not interfere with my normal savings routine.
An account like Nationwide's Flex Direct will pay 5% interest on a buffer like this (£2500) for 12 months if you jump through a hoop or two, so you shouldn't have any trouble making all your money work a bit harder for you.

Some find savings easy, others a chore, but if you can turn it into a bit of a hobby all the better,
If you remember to make savings, capture them and make them work as hard as you can, you won't go far wrong.

Robin9

Sit down and do a Statement of Affairs - SOA - your income and ALL your expenses eg utilities, insurance, food, car, petrol. This should give you a potential savings.

Secondly keep a spending diary - every coffee, , sandwich, bus/train ticket. This will be frightening.

Your first target will be an emergency fund - the washing machine that fails, you loose your job. A minimum of £1000 - perhaps £5000.

Don't stretch yourself too much - leave some for some fun.

enthusiasticsaver

I have been a saver all my life whether for a rainy day fund, investments for early retirement, savings pots for holidays, house and car funds. One thing I would say is do not let it be an after thought. Build it into a budget. Most people spend up to their income and say they will save what is left at the end of the month. I treat savings like any other bill and when I do our monthly budget at the beginning of the month I allocate the savings accounts money as well as working out the bills money and credit card payment.

There is a £12k savings thread on here which I did many years. You can start half way through the year and just decide how much you want to save by December. It does not have to be £12k or even £6k allowing for the fact you will only be saving for half the year. Just set an amount.

MaxiRobriguez

+1 for the "treat it as any other bill"

Do your statement of affairs so you know how much you *should* have left after commitments. What you have left is "disposable" money - see if you can move 50% of that total into a different bank account which you won't touch the day after you get paid, and then live off the remainder.

Forces you into the habit of saving and you get the pleasure of seeing the other bank building up regularly rather than sporadically.

capital0ne

Bookowl wrote: »

....found cheaper ways to get the books I like through eqireader.

Off topic, but I guess you meant eReaderIQ - https://www.ereaderiq.com/?

Just checked it out - looks good - cheers

MovingForwards

I started learning to save by doing 1p a day challenge, 52 week savings challenge and once confident doing that, so I could manage bills and save etc I then started putting chunks of money away.