What is the Best Method to Increase your Savings?

Many of us would like to have more money in our savings account. It can not only provide a sense of security but could mean that we will have money to fall back on rather than having to rely on a loan in a time of emergency. We may also want to save up for purchases. There are different methods that people use to increase the amount of money that they save and it is worth thinking about the different methods and considering which might be the best for you to use.

Pay yourself first

Many people feel that the very best way to guarantee that you will save some money each month is to pay yourself first. This means that you will be able to ensure that there is some money available to pay yourself with. If the money gets assigned into a savings account as soon as you get paid, then it cannot be spent on anything else. Often, we will keep checking our balance to see how much money is available to spend and we will spend if we can afford it. If the money has already been put into a savings account then it will not be available to spend. Obviously, we will know that it is in the account so there if we really need it, but it should be left there.

Empty current account at end of month

Many people prefer to wait until just before they are paid and then put all of the money left in their current account into the savings account. Although it is good to do this, compared with leaving it there to be spent, it can mean that there will not be so much to save compared with how much there would be should you put the money in the savings account as soon as you are paid. However, some people feel more comfortable with doing it this way and some will even use both methods, so ensure they save some to start with and then transfer in anything that they have left as well.

Cut down spending on luxuries

The amount of savings you can do will be increased by cutting down the amount that you are spending. Spending on luxuries is the area that it will be easiest to cut down on as you will not have to go without the essentials that you need. However, it is still not that easy. Many of us really look forward to our luxuries and find that they can help to make life a lot more pleasurable. However, if you can cut down some then this can help to increase the amount of money that you have available for saving. It could be that you will be able to just reduce the amount that you have and there may even be some that you could easily do with out if you give things some thought.

Compare prices

Comparing prices on everything that you buy can be a good way to make sure that you are not spending more than necessary. This will enable you to pay less for items and should mean that you will then have more money available to save. You may worry about the quality of cheaper items and you will therefore need to check that you are getting good value for money. It is wise to not only compare prices in shops though but to also compare prices of things that you buy by direct debit such as insurance, utilities and contracts so that you are sure that there is not anything that you are unnecessarily paying too much for.

Earn more

If you do not want to spend less or you feel that you will not be able to cut down any more, then you will have to earn more money if you want to increase the amount of savings that you have. There are many ways that you will be able to earn extra, but you will have to find something that will fit around any job that you do have and any other commitments that you have.

Choosing the right method for you will depend on your own situation. You may try several, all of them or something different. It is worth having a plan though so that you can decide which option is going to be the best for you. Having a plan is important as it will give you a focus and it is more likely to result in a positive outcome. Of course, you may want to change the plan if it is not working, try different things or additional things. It is worth taking stock every few months to see if the plan is working and changing things if it is not until you are happy with the amount that you have saved or the amount that you are saving each month.

How to get Your Family to Stick to a Budget

When you need to budget, perhaps because you want to make it easier to make ends meet, save some money or pay off some loans, then it is important that you get the whole household on board. This is because you will all have an impact on the money that is spent and you need to make sure that everyone is careful and understands why it is important.

Explain to them what is happening

It is wise to be honest with them and explain exactly what is happening. Make sure that they are aware of the fact that you need to budget and why. If you have young children it is important to explain it to them as well. This is because it may mean that they will not be able to have so many treats and perhaps you will not be able to go out so much or give them so many gifts. It can be difficult to do and to explain but it is worthwhile. It is likely that they will have times when they are adults when they will need to be careful with money and any quick loans they’ve take out and therefore they can learn from this experience. It is so important to explain to them that they are still loved and that buying them less things is in no way an indication of that but that you need to prioritise spending so that you can have a better future.

Decide together on what cuts to make

It can be a good idea to talk together about your plans on how you are going to cut your budget. It is important that you agree so that you are all happy about where the cuts will come from. There could be a whole variety of areas where you can cut down your spending and some may have more of an effect than others. You will need to think about how big a difference they will make to your lifestyle, how easy they will be to stick to and how much extra money they will actually raise.

You might be able to change where you buy things form and save money but still buy the same amount of items. However, you might find that you will need to also cut down on the amount of things that you buy as well. Having a good understanding of your income and essentials will be useful here as you will then know how much money you have left to spend on more fun things and you will be able to allocate it.

Work out how you can work together to stick to it

It can be helpful to work out how you can help each other to stick to the budget. It can also be important to make sure that you all keep remembering what the goal is. Why are you budgeting and therefore why are you having to go without things. If you keep that in mind it should be easier to stick to as you will keep remembering the purpose and why it is so important.

Identify motivators to help

It could also be good to all think of some ideas which might help you to not overspend. These could include all sorts of things but a possible list is:

  • Not going into shops where you are tempted to buy things
  • Sticking to a list when shopping in a supermarket
  • Making do with things you have rather than buying new ones
  • Comparing prices on everything you do buy
  • Finding alternatives to days out
  • Keeping gift lists small when it is a birthday of Christmas
  • Children not to pester for pocket money or treats

Each family would have their own way of doing things. There are many different ways that families could cut their spending, different ways for them to keep motivated and different ways to stick to the budget. However, working together is the best thing to make sure that everyone is on board with the ideas. Everyone will know what they have to do and how they can help and this can encourage the others to stay on board if one is particularly determined. Supporting each other when there is temptation is really important as well.

If you work together as a family it can help to keep you all together. If only one of you is trying then it may mean that the rest of the family feel like they are being picked on and that they are being deprived. To choose together where to cut down and to support each other means that you all understand the goals and reasons for them and that you will not feel like one of you is being treated less fairly than the rest, especially if you all agree on the cuts to be made together.