Do you want to get serious about your savings in 2020? Perhaps you have savings goals you’ve failed to hit in previous years and you want this year to be the best yet. Perhaps you’ve never really considered how important it can be to have savings goals before but you’ve come to a sudden realization and want to turn a serious spending habit around.
Whatever your situation, this post can help you to get serious about your savings in 2020.
- Assess How You Spent Your Money in 2019
Start by simply assessing how you spent your money in 2019. You can even look back at previous years if you believe it’ll help. By taking a look at your spending patterns, when you seem to spend, why you spend, and what you spend on, you can change the habits that aren't helping to propel you towards your goals.
Below you’ll find a few questions you can ask yourself to help you do this:
- How much did I spend each month on necessities, how much on wants, etc.?
- Of those expenditures, what would I consider money wasted?
- Where are obvious places I’m over-spending?
- What are the things I don’t remember buying?
That will give you a great starting point.
- Set Clear, Flexible, Achievable Goals
Your goals may be big, and that can be fine, but they also need to be clear, flexible, and achievable. Having an idea of what you want to accomplish in a certain time frame can be helpful, but staying flexible is a must. You want your goals to motivate you, and ideally, you should have an emotional connection to them.
- Become Inspired
Perhaps you don’t feel at all inspired with your finances. Looking at various books, podcasts, social media accounts, and other resources can help you to feel motivated and inspired and start moving towards your goals enthusiastically.
- Write Everything Down
If you love a good list, then writing things down shouldn’t be a problem for you. Tracking your finances can help you to see the bigger picture. You can write out your savings balance, the way you feel about your spending, and so much more. This can help you to stop overthinking and just get on with what you need to do to achieve your goals.
If you’d rather not physically write it down, the notes app in your phone or an excel sheet can be just as effective.
- Switch Banks
If you’ve been with the same bank for a while, it could be time to switch accounts and make the most of various interest rates and deals. Many high street banks offer cash for switching, cashback on purchases, and more.
However, there are various accounts you can look at opening with each bank. Your current account will help you pay your bills, while you’ll need an account for your savings - sometimes even multiple accounts. You can work out your annual savings using a calculator to see if you’re hitting your goals as you go. Remember to look at interest rates and consider what the best terms are for your goals. Government top ups may be available and can be a great bonus if you want to buy a house, for example.
- Start Investing As Soon As Possible
When you start investing as soon as possible, you’ll be able to make the most of compound interest. This is where your savings work harder for you and compound as the years go on. Now, investing can be intimidating if you have never done it before or never even looked into doing it. However, there are all kinds of apps and even resources that can help you. In fact, there are even apps that will start investing for you. That’s a great resource to have if you’d rather not think about doing it.
Eventually, you can vary your investments and have fun with your portfolio. Start small and work your way up when you feel ready, but don’t wait any longer so you can really make the most of that interest!
- Have A Strong Enough Why
You won’t do anything unless you have a strong enough ‘why’ - in other words, a strong emotional connection to your reason. Do you want to own your own home? Perhaps you just want to feel financially stable and independent? Whatever your reasons are, make sure they are strong enough for you to keep going even when things get tough.
- Find Resources That Resonate With You
You don’t have to read ‘Think and Grow Rich’ if it doesn’t resonate with you. Find people who write and speak in a way that makes you enjoy what you’re consuming. It’ll make a huge difference to your savings and financial journey in general.
- Consume Less
When it comes to consuming less, we don’t just mean the classic (and annoying) ‘don’t buy coffee from coffee shops’. Of course you can treat yourself, and that’s your prerogative. What’s the point if you can't?
However, aiming to consume less is a conscious effort and can mean different things for different people. Assessing your 2019 spending as we explained in point 1 is a huge help.
However, you can also use the mantra ‘reduce, reuse, recycle’. Reduce what you buy, reuse what you can (even if the use is not something it was originally intended for), and recycle or give away when you no longer need it. Be more mindful about what you buy and ensure it’s going to be of use for a long time, and that it’s going to last. Not only will this help your savings, it’ll help the planet.
Everybody could use a little improvement in this respect. Do you really need the latest iPhone as soon as it comes out? Could you use your current phone for another year or two and take a cheaper contract? If the answer is yes and you go ahead with it, you will have already done your savings a huge favor.
- Don’t Give Up
To reach your goals, you can’t expect to take one huge leap from where you are and get straight to where you want to be. You can make big changes to your behavior and spending habits, but you need to be sure you can stick to them. It’s what you do over time that counts, so if making tiny changes is the way forward for you, then do that and don’t compare yourself to anybody else.
You might feel like you’re nowhere near your goals yet, or even be tempted to blow your savings after a short time. Find the willpower to stick with it and reach your goals and you’ll be so glad you did. It’s often a good idea to have a few different savings funds - for example, one for long term goals like buying a house and retirement, and another for things like holidays, car repairs, and emergencies. You might even want one to spend money on treats for yourself. How you do it is up to you, but you need to make sure it’s a way that resonates with you and makes you want to carry on in the long term.
2020: Your Best Savings Year Yet?
If you’re determined to get serious about your savings in 2020, use the advice here and see how you get on. Stay focused and always keep your goals in mind to make saving as satisfying as possible. Do you have tips you’d like to share? Leave them in the comments below!
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