Want to build up your funds this year? We’ve teamed up with HSBC to show you how to save money, from saving tips to finding the right account.
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1. Create Goals For Your Money
Have a holiday you’ve been meaning to book? A wedding to save up for? Or maybe you’re trying to pull some money together for your first home? Whatever the goal, you can use it as an incentive for saving a certain amount of money each week or each month – giving you a more focused mindset when it comes to how you spend and save.
However, be aware that it’s recommended you have around three months’ worth of living costs saved as a baseline, so that you have something to fall back on should something suddenly come up. You can hold these savings in different pots if keeping them all together is confusing.
2. Try A Savings Challenge
If you have a competitive spirit, you can set yourself a challenge as a way of saving more and spending less. Maybe you can put aside £1 every day for a year? Or wear an item of clothing 30 times before you buy a new one? Or even keep all of the £2 coins or £5 notes you come across in a jar for safekeeping, only to be opened at the end of the year and deposited into your account. HSBC outlines some fun savings challenges you can try to help you save money here.
CLICK HERE FOR MORE SAVINGS CHALLENGES
3. Pay Yourself First
When it comes to payday, one way you can look after your savings is by putting them first – bypaying yourselffirst. This means that, when your salary hits your bank account, you put some away into savings before you do anything else (while leaving enough in your account to pay bills, of course). You can do this manually or you can set up a standing order.
HSBC customers who use its mobile banking app can use the Balance After Bills tool to see how much money will be left in their account by the end of the month, once regular bills have been taken out. This can give you an idea of how much you can then put into savings at the beginning of each month.
4. Use An Automated Savings Tool
As we mentioned briefly above, one way to make sure you’re saving some money each month is by setting up a pre-authorised savings transfer – AKA a standing order. This will work best for those who plan to set aside the same amount each month (or who know that, if given the chance, they will spend it if left in their daily-use account).
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5. Take Stock Of Your Subscriptions
Chances are, when you subscribe for a service, you won’t need it forever. But, due to the nature of monthly and yearly auto-renewals, we tend to forget about some of the things we’ve subscribed to – and it gets forgotten somewhere in our bank statements. A study by Citizens Advice revealed that half a billion pounds was spent on subscriptions that auto-renewed without people realising in 2022, and that people in the UK spend over £300 million a year on unused subscriptions. A quick skim of your bills each month can tell you where your money is going – and when it’s time to cancel any unused subscriptions.
SWITCH TO A FIRST DIRECT CURRENT ACCOUNT HERE
6. Make A Smart Switch
There’s a lingering misconception that switching banks is still a hassle. While that may have been the case once upon a time, these days making the move is quick and simple.
It’s important to shop around when it comes to banking our money, especially since different banks offer different benefits. Some bank accounts will offer rewards, perks or cash incentives for making the switch, while others may appeal due to better savings rates or reduced overdraft costs. You might also want to make the switch if you want a better service and support than what you get with your current bank. For new customers switching to a current account with First Direct, for example, you can get a £175 welcome bonus, a £250 interest-free overdraft and access to a seven percent AER Regular Saver Account.
7. Clever Credit
The same principles apply when it comes to finding a credit card that works for you: shop around, and see which plans best fit your needs. Switching to a different provider for your credit card can come with some great perks to make your money last longer – as is the case with HSBC’s Balance Transfer Credit Card. Offering up to 27 months of interest-free balance transfers, zero percent interest on purchases for the first three months and no annual fee,this card is ideal if you could use some more breathing room. Find out more here.
8. Collect Rewards From Your Bank
Speaking of credit cards, there are some that can also reward your spending and let you save for certain things without parting with extra cash. HSBC’s Rewards Credit Card, for example, lets you collect reward points when you shop – and then put them towards future purchases via the Mastercard Pay With Rewards app. When you sign up, you’ll get 2,500 welcome points (worth £25) as well as zero percent interest on purchases for the first six months. You can find out more about the Rewards Credit Card here.
SIGN UP FOR A REWARDS CREDIT CARD HERE
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9. Invest In Your Future
While savings accounts are the most common way to set aside some extra cash, you can also look into investing. Like a savings account, investing can help you save a bit of money over time – with the potential for your money to increase in value over time. However, there aren’t any guarantees; the value of investments can go up or down, meaning you might not get back what you invest.
While it may sound intimidating, many banks will break down the process for you and supply beginner’s guides to get you started. With HSBC, you can start investing with just £50, either in a lump sum or through regular payments. Keep in mind that you should aim to invest for at least five years – although your money won’t be locked away, and you can sell your investments at any time.
The bank has a selection of sustainable and regular portfolios you can choose to invest in, with the option to open a stocks and shares ISA or a general investment account to use to hold your investments. After choosing a level of risk, HSBC’s team of specialists will be on hand to manage your portfolio for you and spread your money across a mix of investments. You can find out more about how to invest your money with HSBC here.
FIND OUT MORE ABOUT INVESTMENTS HERE
10. Leave Your Savings Where They Are
It’s called a savings account for a reason. The best way to keep your savings as savings is to leave them alone in an account that you don’t plan to touch (unless there’s an emergency). Compared to a current account, a savings account enables you to earn interest on your money over time – and then interest on the interest you’ve already earned (this is known as compound interest).There are many different types of savings accounts you can look into, including:
- Fixed Rate Savings Account: To remove any and all temptation, you can lock away your money for a while in a fixed rate savings account. These types of accounts are ideal if you have no plans of dipping into this account and want to maximise your interest.
- Easy Access Savings Account: If you require a bit more flexibility, then you can opt for an easy access savings account – which lets you withdraw your money when you need to.
- Regular Savings Account:With these accounts, you commit to saving a certain amount each month. In return, your bank can sometimes offer rewards like higher interest rates.
- Individual Savings Accounts (ISAs): An ISA lets you save and invest money without paying any tax on earned interest, or capital gains tax.
You can see all of the different types of savings accounts offered at HSBC (and what they can do for you) here.
Featured image: Mathieu Stern, Unsplash
