2020 has been a hard year for most us and has shown we never know what’s around the corner. With economic uncertainty and so many people losing their jobs, it highlights the importance of savings and keeping our finances in order. Savings can quite literally be a lifesaver so even if you don’t have a specific goal in mind, it’s always nice to have an emergency fund.
We always seem to have a savings target. Whether it be for a big family holiday, home improvements or a new car; there always seems to be something to pay for. Saving money when you have three kids isn’t easy but it’s something we have become better at over time.
Here are some tips to make the most of your money and help you hit your savings goals.
Start Small If You’re New To Savings
It’s recommended that 20% of your income is put away for savings every month. If you’re new to saving or finding you don’t have much excess money to put aside, aim for a smaller goal such as 5%. Any amount is better than nothing and if you start small you can always build on it until you reach an amount that suits both your budget and your savings goal.
Treat Savings Like A Bill That Must Be Paid
It’s all too easy to think you’ll save whatever money is left at the end of the month but money in your account can prove to be too much of a temptation if it’s left sitting there. We have set up a standing order so the money goes out every month along with the other bills. We include it as part of our monthly budget and it means we never have a month where we don’t pay into our savings.
Use A Savings Calculator
Using a savings calculator can be a great tool to help you reach your savings goals. You can figure out how long it will take you to hit a specific target so you can adjust your monthly savings amount accordingly. It can also help you calculate the interest your money can earn over a specific time period.
Check The Interest Rate On Your Savings Account
2020 has seen a dramatic drop in interest rates so even if you have a great rate when you set up the account, there’s a good chance that rate has decreased. Check what the interest rate is on your account and compare with other savings options. Even if you are tied in to a long term savings plan, if the interest rate has dropped you may be entitled to move your money.
Consider Other Options
With interest rates dropping substantially, it may be worth forgoing safety and using some of your savings to invest in assets such as stocks and Bitcoin. However there are risks associated with both these options so definitely weigh up the pros and cons. Premium Bonds are another alternative to traditional savings and while you’re not guaranteed any winnings, you also won’t lose any of the money you have invested.
Summary
These are just a few ways you can make the most of your money and get on the way to hitting your financial goals. Making small changes can have such a positive impact on your savings, whatever you want to use it for.