According to a study carried out by the University of Sterling, setting goals will make you a better saver. So, having an incentive can mean most people are more likely to stick to their saving plan and save more. Saving can also have the added benefit of helping to manage and review your finances. Plus, it can help form good financial habits when it comes to planning and spending.
Before we dive into what’s the best way of saving money, here are six of the big life events we save towards:
Moving out and renting, buying your first home or moving to a bigger home are all huge financial expenses. Saving is a great way to get you there quicker and having a clear goal in mind can really help you stick to your budget.
What’s the best way to save money for your own home?
Fixed term savings accounts such as fixed rate bond or fixed rate cash ISA can offer higher interest rates so it’s worth spending some time researching what’s the best option for you.
A big event or holiday can be a really motivational savings goal. You may also have a timeframe in mind which can make it easier to budget set amounts to save.
What’s the best way to save money for a big event or holiday?
They key here is to be realistic about how much you can afford to spend as well as save. So, the sooner you start saving the more time you’ll have to budget and plan. Popular savings accounts are fixed rate cash ISAs, which are tax free and as your money is locked away for a certain time frame, it takes away the temptation of dipping in and out. If you’re unsure, you can seek advice from an independent financial advisor.
Having children is pretty life changing. It’s also rather expensive. The Times estimated average cost of raising a child from birth to 18 in the UK in 2023 is £202,660 if you include housing and childcare costs. So, putting money aside for a growing family is a sensible option.
What’s the best way to save money for a growing family?
You may want to open an easy access account where you can have money set aside for essential purchases when needed, as well as a fixed rate ISA or bond account or a child investment plan such as junior ISA. There are lots of options depending on your financial circumstances and end goals, so it may be worth speaking a financial advisor to discuss your options.
It’s great to be able to help out loved ones and there’s usually a lot of reasons to do so. From education, buying a car, deposit for a house or getting married. Giving money to family members is increasingly more commonplace.
What’s the best way to save money for family?
You may be thinking further ahead and saving for a few years down the road or be planning on gifting the money in the near future. The best of way saving will all depend on your own circumstances. Read our blog ‘The easy guide to gifting money to family’ to get you started on your family gifting journey.
Planning the path to early retirement will mean having enough income and living within your means once you leave work. While reducing your mortgage and having a healthy pension to live off are both important, sufficient savings for both enjoying life and emergencies is also a must.
What’s the best way to save money to retire?
Whether you have a pension, a savings account, such a lifetime ISA, or blend of both is a big decision. Read our blog to find out what could work best for you: ‘Should I pay into my savings account or pension plan?’
It’s that rainy day fund that you hope you won’t need. The unknown of financial emergencies can be anything from an unexpected car repair to losing your job. In the UK, a quarter of UK adults have less than £100 put away which is contributing to why many are worried about the cost of living.
What’s the best way to save for the unexpected?
An emergency fund savings account needs to be reasonably accessible, so think about opening a savings account such as an easy access account, it’s there when you need it but set aside from your current account.
Planning and budgeting are your best friends when having a savings goal in mind. First, review your outgoings, looking at essential spend vs non-essential and then work out how much money you can realistically and regularly put into savings. Once you have your budget in place and savings goals in mind, research the best savings account for you. You can find out top tips on how to save here, ‘Ten things to consider when saving’.
Everyone’s financial circumstance and savings goal is different, so there isn’t a one size fits all for opening a savings account. Which is why there are many savings accounts available. With increased interest rates available, there’s a lot to be said for shopping around to see what banks offer to get a good interest rate. Remember to research the bank, not just the rate and ensure your savings are FSCS protected.
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.