Sometimes, it can be tough to save when you're not saving for anything in particular. But regularly putting money aside is always a good idea.
Here are a few things you can set as your new savings goal.
1. An emergency
Having emergency savings in place is ideal for any unexpected financial situations. Car repairs, a broken boiler, or vet bills are unfortunate situations that can cause financial strain.
It can take a while to build up an emergency fund, but once you’ve saved up your target amount, you can stop paying into it and start saving towards something else. Most recommend saving three month’s rent as a goal for your emergency fund.
Be strict with yourself and only use your emergency fund for emergencies. If it helps, before you start saving, you could make a list of all the things you consider to be an emergency. This way, you won't be tempted to bend your own rules later down the line.
If you do have to dip into your emergency savings, remember to start paying it back afterwards. Keeping up your emergency saving stash is a good money habit to practice.
2. Home improvements
Even if you don’t have any home improvements in mind just now, it’s still worth saving for down the line.
If there are home improvements you want to make but don’t have any money, now is the best time to start saving.
Projects such as upgrading your bathroom or kitchen, installing double glazing, or fitting a new boiler can also increase the value of your property. If you’re thinking of selling in the not-too-distant future, then these home improvements can be a good investment.
Most advise saving at least 3-6 months’ worth of living costs to tide you over in the event of unemployment. Being made unemployed or redundant can catch people off guard, so it’s always best to put yourself in the best possible financial position.
Without any savings, you may end up borrowing cash which could land you in debt.
No one can predict how long unemployment will last, so it's best to save up as much as possible. Consider your rent or mortgage payments, bills, and usual monthly expenditure. You'll get an idea of what you might face should you lose your job.
For more ideas on what to do when you’re suddenly made unemployed, read on here.
4. A holiday
Thanks to COVID, plenty of people are pining for a much-needed holiday. And the increase in demand could mean prices rocket when we're all finally able to travel.
Try putting a small amount of money away every month specifically for your future holiday. That way, when it comes to booking it, it won't feel like such a costly expense.
Give yourself a breakdown of costs so you know how much you should be saving. Take into consideration any travel costs such as flights, trains, and travel insurance.
You should also consider accommodation costs, travel money and some holiday clothes. Estimate the total and then divide it by the number of months you intend to save over. This will let you know how much money to put away each month to reach your goal.
5. A mortgage deposit
With a mortgage deposit, the more money you’re able to put down, the better. While 95% of mortgages are making their back on to the market, aiming for 15% is a decent goal. So, if you were looking to buy a house that costs £100,000, you’d need to set £15,000 as your goal. What you don't use for a deposit, you can use for solicitor's fees, moving costs, or to pay for your surveyor.
When it comes to buying a property, there are plenty of hidden fees involved, so trying to account for this when saving will alleviate some financial stress when you have to pay.
If you’re thinking of a career change, you might need to take a course or do some extra studying to help you get there.
Either way, saving for a course will give you the freedom to pursue your career goals in the future. Having money in your bank means if you ever decide you want to study in future, you can. You won’t need to worry about your finances as much, which means you won't have to stay in a job you don't love.
Make hitting your savings goal easy by using one of these five simple savings strategies.
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