Saving money isn’t just in case of emergencies. Together with other smart money habits like frugal living and using a reliable way to boost your credit score, saving can help you reach your financial goals and work towards your ideal lifestyle.

Despite this, many people struggle to save consistently. So, what can you do to improve your chances of getting it right?

In this article, we’ll share five tips to build your savings.

1. Make a budget

Coming up with a budget will give you a clear picture of your finances, telling you how much money you can realistically save each month. 

Begin by calculating your net income. Then, list out your regular expenses, including rent or mortgage, utility bills, and subscriptions. Subtract your regular spending from your income to find out how much money you typically have left over, called your disposable income. It’s this money that you’ll be using part or all of to save.

2. Set goals

It’s hard to save your money without a compelling reason. And saving for the sake of it often feels pointless. Unless you have well-defined goals, you’ll likely be tempted to spend. 

So, decide what you’re saving for, when you need the savings and how much you need to save each month to reach your target. Regardless of why you want to save, have your goal spelt out in full. You’ll be able to use the image of this goal for motivation when saving or resisting the urge to spend. 

3. Start small 

Many people mistakenly think that saving has to be done in large amounts. But this couldn’t be further from the truth. Even tiny amounts add up if you put them away consistently. For example, you could save £1000 over a year if you just put away £2.74 every day. 

In fact, it might even be better to save this way. It’s easier, so you’re more likely to stick with it over the long term. And this method becomes even more powerful if you factor in the effects of compound interest. 

4. Keep it separate 

When you leave your money in your current account, you’re much more likely to spend it. For this reason, it’s good practice to keep your savings and spending money separate. Open up a savings account if you don’t already have one and set a boundary with yourself to only withdraw money from it for your saving goal or in case of an emergency.

5. Pay yourself first 

Wait until the end of the month to put your money away and you’re far more likely to miss your saving targets. Not only are you more likely to have already spent the money, but you’ll likely be short on cash, increasing the chance of you deciding not to save. 

It’s much more effective to move money into your savings account as soon as you get paid. This will give you a more realistic idea of how much money you have to spend throughout the month, reducing the risk of you exceeding this figure.

Building your savings can be challenging but you’ll be well on your way to getting it right if you follow the advice above. Which of our saving tips will you be implementing first?