Answers and tips for your savings questions

Whether you’re a dedicated planner, a spontaneous spender, or somewhere in the middle, big life memories and mini moments will be part of your personal and financial life. So, if you’re starting your savings journey, or well on your way to meeting your savings goals, let’s take a look at some frequent savings questions and answer them for you with some helpful tips you can bring  along the way.

1. When is a good time to start saving?

The short answer for this would be… now! It’s always better to put aside a little cash regularly when you can. Little and often beats not at all. Understandably, for many, our finances are stretched at the moment as we see prices rise. But, if you don’t have unsecured debts and you do have surplus income you could manage without, it’s worth reviewing your spending to see where this money could be better off so it’s there when you need it.

2. What should I look for when opening a savings account?

Every financial situation is unique so there is no one size fits all approach. However, there are some key things to consider when you’re browsing for savings accounts:

• The interest rate: it’s important to research what interest rates are available, but also take into account the type of savings account these are for.
• The type of savings account: Fixed term or easy access, regular savings account or Cash ISA, each saving account will come with its own benefits – so make sure you choose the right one for you.
• How accessible the account is: if you want an emergency fund, an easy access or regular savings account, where you can quickly (and freely) access your money will be more important than a high interest rate. If you know you’re saving for a house deposit so wont’ need to access the money in the short term, a fixed term account such as 2, 3 or 5 year Cash ISA could be better. It will all depend on your savings goal and personal circumstances.

3. What can we do to avoid dipping into our savings to cover bills?

It’s tempting to use your savings to cover unexpected expenses, and sometimes, that might be just what they’re there for. Boiler goes or unexpected car issues – that’s where an emergency fund comes in. But, if you’re saving for a wedding or a holiday, regularly dipping in can really deplete your funds. The easiest way to get around this is to have separate savings accounts for your separate savings goals, keep an emergency fund separate from other savings pots so you’re clear where you’re taking your money from.  

If you’re finding yourself constantly needing to skim off a little extra from your savings, then it’s probably a good time to revisit your budget and work out whether you need to save less or if you’re overspending on non-essentials.

4. How can I save money while managing rising living costs?

When outgoings are high, saving money can drop down the list in terms of priority. Here are some tips that could help you save more on bills so you can save more for yourself:

• Budgeting: simple but effective. By understanding your finances, you can become more in control of your spending. Create a detailed budget to track your expenses and you’ll find it easier to identify areas to cut back
• Automate your savings: set up automatic transfers to your savings account on payday so the money you’ve budgeted for savings is taken out of your current account, making it less likely you’ll spend it before you save it
• Reduce energy costs: look at ways you can make energy-saving measures at home, such as using energy-efficient appliances, turning off unused devices and adjusting your thermostat. Find
• Shop smart: take advantage of discounts, buy in bulk, and use cashback apps to save on everyday purchases.

Find out more tips on quick and easy ways to save each month.

5. What should I think about when setting savings goals?

Having a goal in mind, such as saving for a holiday or a wedding. It can really help you stay focused while on your savings journey.

Think about:

• Time frames: how long will it take you to reach your savings goal? Be realistic but also ambitious, you don’t want it to out of reach, but you also need a time frame that will keep you motivated enough to keep saving regularly
• Amount needed: work out how much you need to save and clearly define what it’s for, whether it’s for one particular thing or a few. Once you know this you can work out how to get there
• Regularly review: becoming a regular saver is a great habit to form, but you need to invest a little time as well as money to become a good saver! So, make sure you check your progress and make adjustments when needed so you can stay on track.
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If you’re saving for a holiday, this blog is for you.

If you’re new to saving, find out more information in our introduction to saving money blog.

More help from Hodge

Hopefully these answers will help you feel more confident about your savings plans for the future. You can visit our personal savings page to explore our offerings and find an account to suits your financial needs.

Remember, every little bit you save today can help you reach your financial goals tomorrow. Happy saving!

This article is correct at time of publishing and for general information purposes only. We recommend you speak to a professional financial adviser for advice. You can find a financial adviser and further personal finance information at unbiased.co.uk.