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Saving: Do you take the yoyo approach?

Saving: Do you take the yoyo approach?

Category: Savings

Updated: 19/06/2014
First Published: 19/06/2014

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Are you a spender or a saver? Well perhaps, in common with 47% of UK consumers, you come under neither category but instead constantly flit between the two.

Standard Life have coined the phrase "yoyo Brits" in their new research into our country's money habits, and it turns out it can be applied to nearly half of those questioned, as they are up and down when it comes to their finances - saving one minute and overspending the next.

Young and old are alike, with 51% of those aged 55+ having erratic spending/saving habits and 48% of 18 – 24 year olds being the same. The least likely to yoyo with money are 25 – 34 year olds at 43%, though this is still a considerable proportion. Perhaps this is due to the latter age group having to control their spending due to starting a family, as further research showed that adults with three or more children living in the household were most in control of their finances, with just 41% claiming to yoyo.

Where you live tends to make a difference too, with people in Wales claiming to be the biggest yoyo savers and spenders at 57% while people in the North East are least likely to yoyo at 42%.

Julie Hutchison, personal finance expert at Standard Life, said: "Knowing that so many Brits yoyo about when it comes to money is slightly worrying. But it's also encouraging to know that these same people can be savvy cost cutters when they want to be. They just need to channel that smart behaviour so they build up a savings pot, rather than just bankroll a spending spree. Then they can enjoy controlled spending and won't feel guilty or anxious.

"Those who aren't building up savings are taking a big risk by leaving their financial future to chance. It's like pinning everything on winning the lottery."

It appears, no matter what age we are or where we live, we tend to be a nation with conflicting views when it comes to saving or spending. There's nothing wrong with either view, as long as you strike the right balance. Saving should come top of your priorities and if you look at your lifestyle carefully, there are sure to be ways you can cut back. Perhaps you could pack your lunch up rather than buying expensive ready-made sandwiches, or could you have a night in watching a film on TV rather than forking out for expensive cinema tickets? And don't forget to take advantage of two-for-one vouchers and the like, so you can treat yourself without breaking the bank.

Once you begin to cut back, you'll soon see the savings mount up and then it's up to you to select the right account to stash those savings away for a rainy day. Your first port of call should be an ISA to take advantage of the tax-free shelter, but bear in mind some of the high-interest current accounts and regular savings accounts available at the moment. Also consider fixed rate accounts, as not only will these pay the highest rates of interest, but locking your money away will discourage you from dipping into your savings unnecessarily – but always remember to have some funds available for any emergencies.

Then, once you've saved up a nice nest egg, you can spend a little on what you really want without feeling any pangs of guilt, safe in the knowledge that you have your savings as a security blanket. Cut those strings of that yoyo and enjoy the fun of becoming a savvy saver!

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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