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HOW TO BUILD A SAVINGS FUND

We talked recently about having a “running away” fund. This is simply a savings fund that you add to regularly and is there in case of emergency. Saving regularly is a habit that is worth building. Whether you're saving for a rainy day, a dream holiday, the children’s education or simply to make sure you have a financial security net, getting started is often the most challenging part.


Image of different types of people who might wish to start saving

But it needn’t be! We've put together our 4 top tips to help kickstart your journey towards saving your own “running away” fund.


1. KNOW YOUR BUDGET

Understanding where your money goes is key to effective saving. Create a detailed budget that outlines your monthly income and expenses. Review your spending to identify areas where you can cut back. What are the necessities and what are the nice to haves? Be realistic and allocate a portion of your income towards savings. This could come from giving up one of the “nice to haves” and re-directing that money.


2. SET A CLEAR GOAL

It sounds basic but it’s like everything in life, if you can picture your goal, it helps in achieving it. So begin your savings journey with a clear vision of what you want to achieve. Whether it's building an emergency fund, purchasing a home, or planning for retirement, setting specific, measurable, and achievable goals will keep you motivated. Knowing your objectives helps create a roadmap for your savings strategy.


3. AUTOMATE IT

There’s a reason that a lot of our bills are paid by direct debit – because it makes sure that they happen. Make sure your savings do too. Set up an automatic transfer of the funds to your savings account. That way it will become a seamless part of your monthly financial budget. Automating the process removes the temptation to spend the money before saving it.


4. MONITOR IT

It’s exciting to set a goal and see how your hard work pays off as you progress to achieving it. Keep a track on your savings and your progress as time goes on. Set both short- and long-term savings goals so that you can really see the way your account balance is growing. But remember as you see it grow, make sure you keep committed to achieving your goal!


Starting to save does requires commitment and discipline, but it is worth the effort to know that you have a financial safety net in place. But where do you actually save your money? This will really depend on what your goal is, how long you wish to save for, how much you can save and indeed what access you may need to the funds.


There is a huge choice of products to consider and is worth getting the help of a financial advisor in understanding the differences between them and what can be the best option for you.


That’s where we can help!


Saving regularly should be part of a good financial plan. Whether you want to invest money long term or are looking for a shorter-term investment we will advise you on the product that is most appropriate for your needs and goals. Just get in touch with us at Financial Equality Services for an initial chat.

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