Saving money is a headache at the best of times. We all have to do it but sometimes it feels like having a nest-egg is more stressful than working towards having one. When you have savings, there’s more of a risk that you’re going to spend it all and then feel bad about being an irresponsible baby-adult.
That’s my excuse for not saving any money – it feels like a lot of hassle. Like exercise, being nice to weird cousins and smoking, the ability to save money balances on how susceptible you are to building and maintaining good habits.
No-one is good at saving money out of the gate (see our guide for spending your first pay check). You need to make a lot of the mistakes along the way to get good at saving in the long-term and we’re here to help.
Okay, bear with us here, the first piece of advice you should act on is to go out there and spend a dangerous amount of money. Not so much that you get evicted and have to wander the streets with a junk-yard dog but enough to frighten you.
Fear is the best teacher and living a month with little-to-no money will put this whole ‘savings‘ thing in perspective. Moving forward, you’ll think about that horrible month and the ‘junkyard dog’ hypothetical future *shudders*.
That is an extreme and non-technical approach. The easiest way to save well is to understand ISAs and all those confusing bank accounts and their three letter acronyms.
The first thing you need to do is open an account that fulfils your bracket of savings. Most accounts have an initial investment of £1. Depending on how much you want to save and how much you already have, it’s better looking for accounts with a higher initial investment – you get better interest this way.
If you’re notorious for dipping into your savings account despite them being labelled ‘savings’ not ‘back-up cocktail fund’, a fixed rate account gives you a better interest rate as long as you don’t make any withdrawals throughout the year. (If you need the option to dip into your account in case of emergencies, check out notice accounts).
Good savings habits come from understanding how your bank works and what products are available to you. If you need any more information, pop down a local branch and make sure you’re getting the most interest from your money!