How to Become a Saver

Savings rates around the world are at an all-time low. Banks are not only reluctant to lend money but are also reluctant to pay savers for investing in them. Banks should look to savers and not shareholders to help them out of the toxic debt they so happily took on.

People have always tried to put a little money aside ‘for a rainy day’, this is what saving is about. It is not just to receive interest and for some lucky people to receive an income from that interest, but to put some money away for when you may need it later, or to spend it on a special item. In the same way that the banks charge interest and lending fees to borrowers, the bank pays savers for borrowing their money. However, the difference between what is paid to savers and that charged to borrowers is very wide and in some cases outrageous.

Everyone should be saving something, even a small amount on a weekly or monthly basis can slowly build up into a nice little nest egg. The trick is to think of your money as just that, it is yours and therefore you should try to keep some of it! A simple premise I know, but an effective one. Once you realise this, saving becomes easier. Try the 5 steps to saving:

1. Work out what you can save regularly without feeling it – by this I mean saving the £15 per month you spend on weekly magazines and cut down to a monthly magazine or even better sign up to a website for the latest gossip for free!
2. Do a little research – look at internet accounts which usually give a better interest rate, or local co-operatives which allow you to save on a cash basis, building societies support savers with better rates and also look for the best tax-free rates such as ISAs. If you have children, save for them, as they are not tax payers they receive gross interest.
3. Set up a standing order or regular bank transfer into your new savings account. If you are paying in cash, make sure you put aside your money the same time every week or month – make this into a routine and it will become a good habit.
4. Check your balance on a regular basis. You can see your savings grow and feel some achievement. If your interest is paid monthly your balance may grow quicker, however, it is the APR overall which is important when making comparisons. Just keep saving!
5. Every six months review your situation. Can you save a little bit more? Should you look at another account? This may be the time to see an independent financial adviser to see if there are other options for a regular saver like yourself.

The important thing is to see yourself as a saver. Even in financial hardship on a part-time income with a child to support, I still managed to save £5 per month, not a lot, but it meant I had some money for emergencies. If you can save more than this great, you’ll be taking control of a facet of your life and surely that has to be a good thing.