So last week I did this quiz.
It was put together by Aviva, and the idea behind it was to make you think a bit more about your attitude to savings. My result came out as ‘The Enlightened One’ – I apparently have a good instinct for saving, but run the risk of being a bit complacent about it.
I think this sums me up pretty well. I know that I could do most things, if I chose to put my mind to them, it’s just that most of the time I choose to let things tick along as they are and sit down and watch repeats of Alan Partridge instead.
It’s not that I’m lazy…
Heck, who am I kidding? I so am.
Saving though, is something you can do relatively easily. In fact, if you look at it in the right light, you could argue that actually being lazy helps with saving, as you can just watch TV rather than go shopping. (I may be clutching at straws a little here.)
All you need really though is a plan. A savings plan. It’s a bit like Monica’s ‘jam plan’, but without the jam. And you don’t have to go to the docks at dawn, or be in the throws of getting over a breakup.
From April 2016, £1,000 of your interest on savings will be tax free, so there has never been a better time to save. Here are my top tips for making saving less of a chore:
Understand your saving personality
A good start is to understand how you save, so you can exploit your strengths and address your weaknesses. The Aviva Financial Personality tool is a good place to start for this. It’s also important to be aware of current legislation and how this might impact on your financial plans.
Work out how much you can afford to spend
This can be as simple as making a list of income and outgoings, or if you need a bit of extra help, try a budget planner. Saving needs to be something that becomes a habit, and for that it needs to be sustainable. It’s much better to be honest and decide that you can only save £50 a month than to try for £100 and fail.
Look after the pennies
You might think your outgoings are fairly fixed, but it’s worth thinking about all of those little things that you spend just two or three pounds on which, over a period of time, all add up. Smoking and drinking are big ones, neither of which I do particularly, but I do spend quite a lot of money in Starbucks. (I’m such a cliché). You could try to make a habit of stopping yourself every time you go to spend a small amount of money and asking if you really need to. If not, put the cash you would have spent aside instead.
Try this cutback calculator to see how the little things really do add up.
Save for specific things
It’s much easier to save if you have something concrete to aim for. Not only is it important to have an item or project, but an amount helps too. It’s like setting SMART targets for work. If your goal is just ‘work harder’, or in this case ‘save more’, then you never really know when you’ve done it.
If I think that I’m saving ‘just in case’, I’m far more likely to think ‘sod it’ and spend it on a cake instead.
Get the whole family involved
If you can come up with a savings goal that involves everyone, you’ll be much more motivated to stick to it, as you’ll be able to encourage each other on the days when you’re tempted to give up and take all your pound coins to Bargain Booze. Call a family meeting, and have a brainstorm of ideas for things you’d really like to do as a family, like a holiday, a day out, or a even something small like a new board game.
Make it visual
Somehow being able to actually see something makes it feel much more real, and like much more of an achievement. A lot of people like the idea of saving coins in jars, and this works especially well for small children, as they can really see what’s happening. Try different jars labelled for different things to make things extra interesting. Take the jam out first.
Please try to avoid those ‘crazy’ piggy banks that say things like ‘Mum’s secret shoe fund’. Not cool.
Imagine you’re a church with a leaky roof
In a similar vein to the jars, but for larger amounts – how about making your own fundraising thermometer with card and felt tip pens? If you’re saving for a holiday or new car you don’t want the house full of thousands of 20p pieces, but you can still keep things visual if you make a family savings chart of some kind. This is definitely the sort of thing I would do. I love felt tips pens.
Talk to your friends and family
There are two benefits to this. Firstly, they may be able to offer you some advice, or share tips that have worked well for them when they’ve been saving for something in the past. Secondly, the fact that you tell someone else about your savings plan should, (hopefully), make it that little bit more likely to happen, as it adds an extra layer of accountability, and gains you a bit of extra support. It’s a bit like telling everyone at work that you’re trying to lose weight – it makes it that much harder to casually wander up to the table full of birthday cakes…
Do your banking online
This one is all about making it easy for yourself. There’s no point opening a super high interest account if you need a pass book and a local branch to ever pay any money in, as you’re just not going to do it. My bank allows me to set up a number of simple online saving accounts that I can run alongside my current account. I can transfer money in and out easily at the click of a button, and it just means I’m less tempted to spend money because it’s sat in my main account.
It’s like jars, but online, and they don’t need dusting. And again, no jam.
What are your top savings tips?