Money Matters

How to Create a Savings Plan

By July 12, 2016 No Comments

If you have any kind of regular income, whether it’s pocket money from your parents or money earned from a job, it’s a really good idea to get into the habit of saving some of it. Setting up the routine now will make continuing it as you move into your career a lot easier. Here’s how to go about it:

Decide how much to save

Calculate how much of the money you’re receiving you really need to cover your basic expenses, like rent, food, toiletries, transport, study supplies, etc. Then from what’s (hopefully) left, set aside an amount you feel you can spare each month. Even if it doesn’t seem like much, do it anyway – it’s amazing how it adds up over time.

Set up a savings account

You could stash the money under your mattress or leave it in your current account, but let’s face it – if you do, it’s likely to get spent. Rather set up a separate account where that money can accumulate. Also consider protecting it from yourself by choosing an account that requires a notice period, like one of these options.

Many banks offer really good deals to students, so find out what your bank can offer you (hint: check both the fees and the interest rates paid on your balance). Don’t be afraid to go elsewhere if you’re not satisfied with their options.

Pay yourself first

It may seem easier to wait until the end of the month, see how much is left over and then save it, but we all know how that works out. Rather put your savings money aside as soon as you receive your income. Then you’ll know it’s taken care of and you’re free to use the rest of your money as you please.

Do it automatically

Reduce the temptation to spend the money you’ve designated for saving and at the same time, make your life easier by automating the process. If you can, set up a monthly automatic transfer from your current account to your savings account – ask your bank about the cheapest way to do this.

It may seem like a huge sacrifice at first, but you’ll soon get used to living on the rest of your money and won’t even miss the money you’re saving. Then one day when you really need the money, it’ll be there and you’ll be so happy you made the effort early.

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