It’s important to get into the habit of saving but very few of us have the motivation to save regularly just because we know it’s the right thing to do. Whether you’re looking to buy a new car or build a nest egg for your retirement, you’re more likely to succeed if you have an end goal in mind.
Take a look at the simple steps below to help you start your savings journey:
Step one: What’s your goal?
Ask yourself ‘what do I want to save for?’ Your goals might be short term, like taking a dream holiday; long term, like saving a deposit for a new home; or somewhere in between, such as paying off a loan. Remember it’s next to impossible to save successfully for something if you’re not clear on the end goal.
Step two: Create a timeline
The next step is to decide how much time you have to reach your goal. If there’s no set date, make sure that you pick one. It’s much easier to reach your savings goals if you break them down into smaller milestones.
Step three: Assess your finances
Once you have a goal and a timeframe in which to achieve it, you need to decide how much you can save in order to successfully reach your target. It’s easier to work this out as a monthly figure and a budget calculator can help with this. Remember, honesty is the best policy – be realistic with yourself about the amount you can afford to save. Also set aside some money for emergencies, otherwise your savings plan can suffer a major setback if something unexpected comes up.
Step four: Every bit counts
Have a look at your regular monthly spending – re-evaluating some of your expenses such as gym membership, paid TV services and mobile phone plans could free up some extra money for your savings pot. Ask yourself if you’re paying for a monthly subscription that you no longer use? Or could you negotiate a better deal with your provider as a long-term customer?
To give your savings the best chance to grow you need to spend some time finding the right home for them Step five: Do your homework
To give your savings the best chance to grow you need to spend some time finding the right home for them. This will depend on how long you have to reach your goal and how much risk you want to take. Over the short term you could consider a savings account or cash ISA which will allow you easy access to your money. For the medium and longer term think about a fixed-term savings product or an investment product which could provide protection from inflation over the longer term.
Step six: Track your progress
Tracking your progress is a great way to stay on top of your savings goals. Set aside some time each month to review your income and expenses and see how much you have saved so far. If your savings aren’t quite where you want them to be, don’t be discouraged, have another look at your budget and adjust your targets accordingly.
Police Mutual offer a range of savings and investments products. Whether you want to save regularly or invest a larger amount, our products could help meet your needs. To find out more about our range click here or call the team on 0345 88 22 999.
Police Mutual Assurance Society Limited is an incorporated friendly society. Registered office: Alexandra House, Queen Street, Lichfield, Staffordshire WS13 6QS.
Article published on 5 September 2017