At Youtility, we know how important it is for you to save your hard-earned money. That’s why we provide in-app impartial advice focused on saving you time and money on your utility bills. On average, we spend over 50% of our salaries on home finances per year, yet managing and tracking these accounts is a modern day nightmare. Youtility is on a mission to provide a simple and smart solution. So to help you save even more, we’ve put together some top tips on how to set money goals that actually work. People who set a money savings goal save faster than those who don’t! So if you really want to save for something big, like a deposit on a home or a dream holiday, work out how much you can save each month and get started. Then sit back and watch your money start to grow!
Step 1: Name your goal
First, decide what you want to save for. If you’re new to saving, try starting with a small goal. Even if you’re just saving for a rainy day, you’re more likely to succeed if you have a specific goal in mind. Some people choose to write down what their future will look like once they’ve hit their money goals. Whatever you choose to do, keep your goal in front of your mind so you have something to fight with when those daily decisions come up. It’s the little things that add up to the big things.
Step 2: Find out why you want to achieve this goal
Why do you really want it? Having the reason will help to motivate you from spending on certain smaller purchases whilst you’re saving. Sometimes it is harder to set big goals because you can’t see your progress as easily. So when it comes down to those daily spending decisions, you could easily choose whatever feels best in the moment. However, those daily spending decisions can really add up. Always try to remember that every time you say no to an expensive meal out, a new pair of shoes, or even your morning coffee run, you’re saying yes to your goal.
Step 3: Work out how much to save each month
This depends on the price of your goal, how much money you have at the end of each month, and how quickly you want to achieve your goal. You need to know the reality of your spending and make every day changes that are realistic and achievable. You can’t stop paying for your electricity bills, but you could commit to making your lunches everyday to cut back on daily spending. If you know of any life changes coming up, try to factor those into your goal setting, too. It’s a balance between what you can afford and how long you want to save for.
Step 4: Create a standing order
Open a straightforward instant access savings account. It might be easiest to do this with your own bank. Set up a regular payment to transfer the amount you want to save into your savings account each month so this savings happens on a regular basis without you having to do anything.
Step 5: Find the best place to keep your money according to your goals
Once you’ve got started with saving, give your savings chance to grow faster by spending some time to find the right place for them depending on how much time you have to reach your goal, and how much risk you’re willing to take. For a short-term goal, you would benefit from having either a savings account, term deposit or a cash ISA. For a longer-term goal you might consider investments like shares, bonds or funds that tend to provide protection from inflation over the long term.
By planning for the year ahead of you and being realistic with what you can accomplish during that time-frame, this can be the year you finally hit your money goals. Knowing what you truly want and not being afraid to make your goals smaller will give you the tools you need for success. Click to learn more about how you can manage your entire home finance ecosystem in one single place with Youtility.