How to build your savings pot

Collaborative Post | In the current economic climate, building a savings pot is more crucial than ever. Despite a challenging period of low interest rates, recent developments have seen a slight increase, offering new opportunities for savers in the UK. Although undoubtedly important, setting money aside into a separate fund is something that’s easier said than done. It takes time, discipline and commitment, and there are no quick fixes. So, what are some practical steps you can follow to help you get started? Read on to find out more.​

Photo by micheile henderson on Unsplash

Set a goal and create a budget

The first step is to define a clear, achievable target. Whether it's saving for a holiday, a new home or simply for a rainy day, having a specific goal in mind helps to stay focused and motivated. Consider what you want to save for and determine a realistic amount you need to achieve your goal.

And to effectively save, you must first understand where your money goes. Create a budget by listing your monthly income and expenses. This helps identify potential savings areas and manage your finances better. Tools and apps are available to help track your spending, and you should soon build up a picture of how long it will take to reach your target.

Set up automated transfers

One of the most effective ways to ensure you regularly save is by setting up standing orders from your current to your savings account. Decide on a fixed amount to be transferred automatically right after each payday. This "set and forget" strategy helps to build savings consistently without needing to remember to transfer funds manually.

Consider trading and investing

To potentially increase your savings growth, you could consider commodity trading or selling in other markets such as foreign exchange, indices or stocks. While there is more risk involved, the potential for higher returns can significantly boost your savings over the long term. But you should always do thorough research or consult with a financial advisor to find investment options that suit your risk tolerance and financial goals.

Take up a side hustle

A side hustle can supplement your main income source, providing more money to save and invest. Consider freelance work, part-time jobs, or turning a hobby into a source of income. This not only increases your financial input but can also be a fulfilling way to explore your interests, offering you an improved quality of life in the process.
 
Building a savings pot is important for your financial security and achieving your personal goals. By following some of our tips above you can steadily grow your savings and improve your financial wellbeing. And there’s no time like the present to get started!


Disclaimer: this is a collaborative post