How to start saving in ten minutes

According to official figures, 45% of men and 49% of women had no private pension savings in 2010-2012 . This highlights the need to have a sensible savings plan for long-term financial security.

Too many people decide to start saving in the future, or once they earn more money - the trouble is that may not happen, especially as a lot of people take on more financial responsibility as they get older or their earnings increase.

If you find that you have more month at the end of the money, you're not alone. It's important to remember that being a conscious saver doesn't mean you can't still spend or enjoy yourself - it just means an adjustment of priorities because if we're being honest with ourselves we all know that the "save what's left after spending" philosophy doesn't work. Instead, we need to spend after saving.

The quickest way to do this is to think of your savings account as another bill that needs to be paid - so when you're writing down your expenses and ticking off food, rent, water, electric and phone, add savings to the list. It's even better if you start a direct debit so that once you get paid, a set amount is transferred automatically to your savings account. Whatever is left afterwards is yours to do what you like with. 

The first step is to decide a percentage you want to save. Ideally you'd say somewhere around 20%, but that isn't always feasible, especially when you're just starting. If you start at, for example, 5%, you can increase it incrementally too. So once you pick a percentage, work out what that is from your take-home pay and then set up a direct debit from your regular account to savings. It's easier to work around having less money than trying to leave money in the account until payday.

If you want different or additional saving options, you could try to cut down on weekday expenses. If you spend £6 a day on lunch, that could add up to almost £1,500 a year - that could cover a holiday, day trips, Christmas, or boost a retirement fund. If you saved that each year for 30 years, you would have £45,000 saved on top of your actual pension or retirement fund.

Once you get into the rhythm of saving you may find yourself looking for more ways to put money aside, and a great way to do this is when you're considering purchasing something. If it's something you have chosen on the spur of the moment, walk away and think it over. If it's not something you need, put the cost of it in your savings instead of buying it. 

Similarly, if you spend less money on petrol or in the supermarket than you expected, save the difference. If you walked past Costa instead of buying a coffee at the station, save what you would have spent. This loose change can be put into a jar at home, and at the end of the month treat yourself to a night out or other luxury.

Saving is often about our attitude to money, and the above should demonstrate that it isn't necessarily about having more, but learning to stretch what we are already earning.

Do you have a savings plan? Let us know on Twitter or Facebook.

Call 0800 304 7288 for a friendly chat about your pension

The details provided in this article are for general information only and are in no way deemed to be financial advice. All of the material is correct as of the publication date, but could be out-of-date by the time you read the article. For our latest information and news, please see our articles section: https://www.portafina.co.uk/whats-new

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