Putting aside some money each month should be a core part of financial management. Whether you're looking to build up a nest egg or an emergency fund – or ideally both – it's important to get into the habit of saving, and it's always nice to have a goal in mind too. But, will you meet it?
According to research from Post Office, a lot of people won't. The figures show that, of those that do set themselves a target, 20% won't meet it – and they'll typically fall short by £500 per year. The average aim among those who have a target was £1,500 but in reality savers only put aside £956, and it's thought to be the increased cost of living that's largely to blame.
Of those that didn't meet their target, 53% cited the cost of living as the key reason, while 26% concentrated on clearing their debts – often a sensible approach given the low returns on savings accounts and the high interest rates of credit commitments. Additional reasons for missing their goal include holiday expenses and the cost of any home renovations or DIY – cited by 22% and 20% respectively – while 12% admitted that they simply weren't very good at managing their money.
There's also a clear difference in the savings habits, and financial saviness, of men and women. The proportion of those admitting to being bad at managing their money rises to 16% amongst male savers, while 22% depend on a pay rise or bonus in order to meet their savings targets, compared to just 10% of women who do the same.
Of course, there are regional differences too, as well as differences in the savings habits of higher earners. Unsurprisingly, those earning over £50,000 were more likely to achieve their goals – 98% were able to do so – thanks to higher disposable incomes, while London had the highest percentage of savers willing to set themselves a goal, with 47% having a target compared to just 15% in the North West.
Happily, however, it seems that a lot of people still aspire to achieve their savings goals, and a lot (44%) have even set themselves a more ambitious target than in previous years – despite the cost of living and a reduction in disposable incomes taking their toll.
But, whether you're aiming high or have more muted goals, the key to achieving them will always be getting into a suitable habit – and of course finding the right savings account in the first place.
Getting into the savings habit needs to become just that, a habit, and if you view it as something that you absolutely must do without fail you'll soon stop noticing the money leaving your account. Setting up a direct debit could therefore be a great option as you won't even need to think about it, and if you opt for an easy access account you'll be able to make additional deposits whenever you can – and will be able to access the cash in emergencies too.
Regular savings accounts could be another great choice. These accounts normally come with a minimum monthly deposit, and you'll need to make sure you save at least that much – most regular accounts will pay a lower rate of interest if you don't hit that minimum target, so it could prove to be a highly effective way of making sure you save.
You'll probably want to make a few everyday changes too, as Henk Van Hulle, of Post Office, said: "Despite the economy seeing signs of improvement, families may still need to make drastic adjustments to their lifestyle in order to secure their financial future and make saving part of their day-to-day routine.
"It is vitally important people review their budgets to see where they're able to adjust their spending habits. They may also want to take a look at their wider financial planning to ensure they maximise the benefits of saving more free of tax."
Even making small changes could make a difference, whether you vow to put any pennies left over at the end of each week into an account, or make more active adjustments such as forgoing takeaways or that morning coffee. Even small amounts can soon add up, and a bit of discipline and the right account could mean you get that bit closer to achieving your savings goals.
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