The earlier you start contributing to a nest egg, the better. This is not only because it will set you up well financially for the future, but also because it will in turn become easier to keep adding to it, as regular contributions to your savings simply become part of your monthly budget that is routinely factored into your plans, making it simply a way of life, rather than a burden.
With that in mind, here are some tips to help you get into the habit of saving sooner rather than later.
- Start right away. It may sound obvious, but the first step is simply to start putting money aside as soon as you can. There’s no amount too small to put into your savings, since over time, it all adds up.
- Avoid debt as much as possible. Some kinds of debt are perfectly permissible (like student loans and mortgages) but ‘bad debt’ like payday loans should be avoided at all costs, as interest rates are huge and can quickly spiral out of control. Since debt swallows up any surplus money you have, it becomes incredibly difficult to put anything into your savings.
- Set up a direct debit. By setting up a standing order of an affordable amount of money to be paid into your savings account automatically each month, you don’t even have to think about it. As mentioned before, it simply becomes habit, and money you won’t miss since it’s already accounted for in your budget.
- Learn to avoid impulse buys. Especially when we first start earning our own money and gain financial independence, it can be all too easy to fall into the trap of frivolous impulse buys. By getting used to the idea of taking time to mull over any potential purchases, you soon get into a more frugal way of spending, leaving you more to save. Thus, you should always ask yourself: “Is it something I need? Is it something I will continue to use? Is it something I can afford? Could I find it cheaper elsewhere?”
- Don’t become a brand snob. With everything from gadgets to food, once you get snagged by the hold of a strong brand, it’s difficult to break free. Get used to hunting out bargains, and trying alternatives and own brand goods, as once again, the money you save can easily be added to your savings instead.
- Use government help. If the goal of your savings is to get onto the property ladder, consider using the ‘Help to Buy ISA’. Under this scheme, the government will top up your savings by an additional 25%, up to a total of £3000.
- Don’t be afraid to switch. Whether it’s your bank, your phone contract, your internet provider, your utilities, or otherwise, it’s good to get into the habit of regularly reviewing current deals so that you can switch to the best one, ensuring you aren’t handing over money you don’t need to be.
- Save while you study. With the student life known for being expensive, you’d be forgiven for thinking it would leave no opportunity to save. However, by getting a part-time job alongside your studies, and making economical decisions like living at home and attending a local college/university, the thousands of pounds you would have spent on rent and travel could instead be put into your savings, meaning you already have a healthy stash set aside by the time you graduate.