Effective saving largely depends on planning and dedication, but it also depends on the resources that you have available to you.
With the current economic situation the way that it is, making our savings work for us can be extremely important. To get your savings mission off to the best possible start the first step is planning.
Plan Your Savings
In order to save effectively, you need to plan ahead to know how you can get the best return on your money. The best way to prepare to save is to budget. A budget isn’t simple to set up, but it can be the most effective financial tool.
You can set up your budget by detailing all of your income and your expenditure, this can take a while to do but it will be worth it in the long run. Once you know how much you are spending on a month to month basis, you can then see how much disposable income you have by taking away your expenditure from your income.
Once you have this figure, the next step is to look at your expenditure and identify ways in which you can save money. Are there areas where you can clearly see you are spending too much? Are there bills that you feel you could cut down to save? Try and identify all the ways you can save money.
Put Your Methods Into Practice
Once you know where you can save money, it’s time to identify how you can do it. For example, do you pay too much interest on your credit cards? One way to try and get around this problem could be to take out a 0% interest free balance transfer credit card, you can then use this card to transfer your other credit card balances to save money on the interest repayments.
Another scenario could be that you pay too much on your home insurance, have you used a price comparison site to see how much you should be paying? Find out how much you could save and see if you can switch provider. The important thing to remember is that there are always ways to save to money, once you know where you could be saving do your research to find out how.
Instead of just using the normal money saving methods that you always use, why not consider different money saving techniques? For example, do you ever use voucher codes? They are a great way to save some extra cash when you are out and about.
Use The Best Savings Account
Once you know where you can save money and how you can do it, the next step is to ensure your savings are working for you. Using a really good savings account and you can basically sit back and let the interest earn money for you.
In the UK, one of the best type of savings account is the ISA. All the interest you earn is tax-free, and your capital is totally safe. With a cash ISA account you can save up to £5,100 per tax year.