Conor Murray • 27 Jan 2020
Tips on starting your savings plan in 2020
As I write we’re almost at the end of another long January and the first monthly pay cheque of 2020 will be a welcome credit to our bank account during the coming week!
When a New Year arrives or indeed a new decade, we all have great intentions to save more money, with many of us managing to keep on track for a few weeks. However, as the weeks and months roll by, life can often get in the way. While a big part of learning how to save money is down to determination and resolve, there’s no harm in picking up some tricks and tips along the way.
These money saving tips and tricks to stay on track are focused on the smaller steps that will hopefully create bigger results for your wallet which could go a long way towards your goals – whether it’s a big purchase like a new car or a smaller purchase like a weekend away.
Make your savings goals as specific as possible. Otherwise, it’s very easy to end up saving little bits here and there, rather than a weekly or monthly minimum that will make a difference for you. If you are saving for a short-term goal such as a holiday, it’s quite easy to work out how much you’ll need to save each month to reach your target in time.
For longer-term or regular savings, the general guideline is to save roughly 20% of your monthly salary. If someone on an annual salary of €28,000 saved €380 a month, they could have accumulated €4,560 after 12 months. If someone on an annual salary of €36,000 saved €480 a month, they could have €5,760 saved after one year. Both are significant amounts considering it’s from savings of €95 and €120 per week, respectively.
If you wish to start a regular savings account, it’s a good idea to have a direct debit set up the day after you get paid – this way it’s as if you never had that money in the first place and you won’t notice when it’s gone.
It's important to put a bit of money away for times when you may need it and setting a savings goal is a great way to help you focus. If you are savings for a specific item or event, it is highly motivational to keep reminders of these around you. Maybe it’s your dream home, a new car, a holiday or a wedding – keep images of these stuck on your fridge or at your desk in work to remind yourself what it’s all for and how much you want it.
In order to calculate how much you can save per month make notes to record your expenditures over a week. Add up the cost of all the non-essential items on the list to see exactly how much you could save with just some small changes. After recording your outgoings, create a budget that cuts out unnecessary costs. Remember to include your savings as a monthly expenditure/bill that needs to be paid.
Talk to your financial advisor about setting up a monthly paid savings plan. There are plenty of options available to you and make sure your savings plan is set up with no surrender or early encashment penalties.
Keep track of your savings on a monthly basis by using secure on-line platforms that are available from most product providers. This will also ensure you don’t lose the motivation you’ve gained by starting a plan in the first place and seeing the money building up will encourage you to keep going.
Finally, review your savings plan at least once a year with your financial advisor. This review should concentrate on the investment performance to date and your savings budget for the next 12 months. You may have additional monies to allow you increase your monthly savings to the plan or perhaps some unforeseen circumstances may mean you have to cut back for a short period of time.
27th January 2020