With the covid 19 pandemic for a lot of us money is tighter than ever. With businesses closed, people on furlough and everyone staying in their homes a lot of us have been earning a lot less (or maybe nothing at all) than we did before – every penny really does count. As a self-employed person it’s been really tricky for me, I’ve had much less work plus I’ve had my children at home full time, meaning even if I had the work I wouldn’t have had time to do it. The juggle has been really hard, but thankfully it looks like we might be heading in the right direction for getting back on our feet.
So, with that in mind, I wanted to write a post today about saving for the future. It doesn’t have to be huge amounts, it’s just adding a little when you can as you’ll find that it all adds up, eventually! I hope these tips will be helpful.
Make a budget
Firstly, before saving money you need to work out exactly what you have coming in and going out, each month. I find a spreadsheet is the best way to manage this. You can then work out how much you’ll have left after bills and essential shopping and see how much you can afford per month. If you end up with less than your bills, maybe it’s time to make some changes to your lifestyle or cut back in some way.
Pay off debt
If you have any debt, it’s always worth paying this off before attempting to save. The money you’ll earn from savings interest will never be as high as the interest on the debt, so work on becoming debt-free before putting any larger chunks into savings. I will add here that I’ve previously had credit card debt and a loan and I did still have a small savings pot on the side which I called my ’emergency fund’. This was for things like if I was suddenly out of work or the car broke down, so I’m not saying don’t save anything if you have debt, just to make the debt the priority!
Review your pension
Most people are aware of how important it is to have a pension, yet most don’t really know much about them. It’s important to set up the right pension for you and be aware of having a mis-sold pension. Your employer will have details on the pensions they might offer, or you can instruct a financial advisor to give you all the information and find the right product for you. After all, saving for your golden years is one of the most important things you can do right now.
Use a banking app like Monzo
Online banks like Monzo have handy apps that help you keep track of your finances, creating detailed breakdowns on where you are spending your money, from grocery shopping to eating out, you can keep tabs on what is costing you the most. They also have a function where you can save a little bit each time you use your card. It’s only a fraction of the spend, but it all adds up so quickly and you don’t even realise you are doing it!
Set up a standing order monthly
If you don’t have a snazzy banking app like Monzo, don’t worry saving can still be really easy. Following on from making your monthly income budget, work out how much you’d like to save and set up a standing order from your bank account into a savings account. I find it easier to have my savings account with a separate company to my usual banking as then it’s ‘out of sight, out of mind’ and for me, I’m much less likely to dip into it!
I really hope some of these tips help you to start saving for your future!