- Don't be a dick
- April 25, 2016
Sit down. It’s time to have the talk… the talk about money and savings, that is. Sure, we all know that we should be saving for the future, but how many of us actually do it? Not so many. In truth, we all think that this is something we can put off to a later date. But what if that date never comes? Before we know it, we may be nearing retirement age with no safety net of savings to catch us should we fall. Yikes. It’s a scary thought.
And perhaps that’s the very point. If you never actually consider the future, you can ignore it. For example, you may avoid thinking about what you’re going to do when you retire, because the thought of it is just too much to handle. It’s logical, but it’s not particularly productive, is it? If you find it particularly hard to save money, perhaps it’s time to have a long hard think about how you approach it and what needs to change.
Let’s face it — if your current money saving ideas just aren’t working for you, you need to change tack. There’s no point in simply muddling along and hoping for the best. That won’t work. Instead, you need to take responsibility for your own money and do something about it. That’s what being an adult is all about.
According to a study, from the University of Chicago, many consumers (that’s you and me!) don’t think about the future or how their current spending habits may affect it. In a sense, that means that they (we) can ignore the impact our overspending will ultimately have on our own lives. It’s quite a problem — especially if you’re hoping to have a secure and happy future.
“Efforts to get consumers to think more about their own future or to value future outcomes without pointing out the tradeoffs resulting from current decisions might not be enough. The best way to help consumers avoid overspending is to get them to both care about the future and recognise how their current behaviors affect the future,” say the study’s authors.
So, the idea is that simply understanding that you do need to save can have a major impact on how you deal with money in the long-term. That means that it’s time to change your mindset for the better and start being money conscious.
(Yes, it might sound like an absolute snooze-fest, but for once go ahead and do something that will benefit your future self. It might not be fun today, but you will thank yourself for it tomorrow. Trust us.)
While it’s all very well and good knowing that you ought to save, figuring out where to start can be a problem in itself. After all, there’s a whole load of advice out there but it’s all seriously confusing. Wouldn’t it be better if there were small, easy ways in which you can save as much as possible for the future? Well, perhaps there is. Let’s take a look at some rather simple ideas, which should help you along the way. Here are a few that you should probably try for yourself.
First of all, it’s time to set some goals. If you don’t have any money-related targets, it’s very easy to overspend. You can convince yourself that every little purchase is a necessity and that you had no choice in spending the money. You know that’s total rubbish, though. If you want to get things right, you need to have tangible (and sensible) goals from the start.
Here’s the important bit — write them down. Use the notes app on your phone or use some real paper. It doesn’t matter where you do it, just do it. Making sure that you have a target written down will make it real! That means that you will be more likely to actually go ahead with it rather than merely ignoring it.
We know! Pensions are hardly the most thrilling thing in the world to talk about. Still, if you want to make sure that you have a happy, wealthy future, you need to consider them. You might have a pension with your current employer, but there’s no harm in putting into another pension as well. In fact, it might be the best thing you can do for yourself. Before you choose which scheme is right for you, why not compare a few? There is plenty of information online about the various pension types and what works best for different people in various situations.
Whether you’re married or living with someone, you need to factor your partner into this aspect of your life. Failing to discuss finances may seem like a smart way to avoid arguments, but it’s likely to cause problems in the long run. Don’t do it. Instead, you need to be clear with your other half about what you plan to do and, crucially, how much you hope to save. Having both of you on the same page here could well make all the difference. What’s more, you can spur one another on to work harder and save more.
After you’ve set a goal, you need to make sure that you have a chance of sticking to it. One of the ways you can do so is by breaking it down into smaller, manageable chunks. For example, if you hope to save £1,000 in six months, you should break that down into roughly £167 per month, and then £5.50 per day. It might sound like a lot, but the more you break things down, the easier it becomes. If you spend about that on lunch each day, you could start making your own food to take to work. That will go toward helping you cut back in areas where you really don’t need to be wasting cash.
Most people don’t know how much they truly spend on things. If you look at your bank statement and wonder where on earth all your money went, you are so not alone. There are many people out there who are just like you. That means that you are not alone at all. So, how can you solve the problem? Well, it’s about reviewing your finances and seeing if there’s somewhere you can cut back. Look over your monthly bills and see what is costing you the most money for no good reason. Armed with this information, you can take action.
Of course, there are some things in this world that cost a load of money. New computers, holidays, and Christmas… these are all things which can destroy your finances in one instant. It’s no fun. While you might not be able to avoid these things, you can at least do something about them. Planning ahead and saving for these events is the best thing you can do for your own peace of mind. You already know (or should know) how much Christmas costs, so why not start saving now? Doing so will mean a whole load less hassle when the time comes around!
Of course, to save well, you need a proper savings account. Getting an ISA is a great way to put away cash and making a little interest on it too. These types of accounts are so very popular since you don’t have to pay tax on the interest they make. That means that you can save (and make) more money than you would be able to in a regular account. (However, you should know that in the tax year 2017/2018, you can only save up to £20,000 in one of these account types!) If you don’t already have an ISA, now might be the time to start. Contact your bank and get the ball rolling!
Some people like to claim that they just have no clue where their money goes. If you’re one of those people, this point is for you. It’s time to take responsibility for the cash that you spend on a daily, weekly, and monthly basis. One of the best ways to do so is to keep track of your outgoings. There are a couple ways you can do so. You might want to write everything down that you spend (long!) or you could use a Monzo card to track and budget your spending habits. Easy!
Read: What is the Monzo card?
Finally, one of the easiest ways you can learn how to save is by learning to say no. Often we end up spending over the odds because we just don’t know how to refuse. Whether it’s extra expensive meals with friends or pitching in for a holiday you don’t want to go on, you need to learn how to let people down. Only you get to decide how you spend your money. It’s that simple. So start telling people no when they demand what you do with it.