How to start saving

Ready to take control of your finances? We know that saving money is easier said than done so we’ve created this guide of saving tips to help you make a start.

Starting savings can be daunting, especially if you're starting from a position of having been in debt. This guide will look at how you can start savings, including how to open a savings account, savings tips, and how to start building savings from zero.

At Lowell, we believe that everyone should have the knowledge to be able to take control of their finances and that includes knowing how to start saving money. To help you take the first steps, we’ve created this guide full of saving tips that you can use in your life and help get you closer to your financial goals.

This content is intended to be an impartial guide about how you can start saving.  Lowell Financial Ltd do not provide financial advice, you can find out about organisations you can contact for guidance throughout the piece and at the bottom.

How to save money

Whether you’re looking to put some money aside for a rainy day or are wanting to save up for a bigger purchase, it’s always nice to be able to grow your savings.

At Lowell, we understand it can be difficult to find ways to save money without feeling like you’re having to make sacrifices. If you’re ready to take the next steps but not sure where to start, here are some simple tips for saving money that you can use to boost your finances:

Create a budget

One of the most effective ways to start saving money is by creating a budget. In your budget, you’ll need to include all your regular outgoings and incomings. It’s also probably worth factoring in the possibility of extra costs such as special occasions and transportation.

Once you’ve done this, you can start looking at if it is possible for you to cut down on spendings anywhere. You can use our budget calculator tool to help do this and get a better idea of what’s coming in and going out along with exactly where you can be saving.

We've got a handy guide on how to save money on household bills that you might also find helpful.

Use money management apps

Nowadays, we use our phones for practically everything, so why not money management? There are a wide range of apps available that can help you learn how to save and take control of your finances.

At Lowell, we’ve partnered with the free money management app Snoop. Not only is this app great for helping you take control of your debt, but you can use it to track your spending and make managing money less overwhelming. It helps you track, sort and plan your money automatically, across all of your accounts, in one place.

These are just some of the ways Snoop can help you:

  • Notifying you when it might be time to look for a better deal.
  • Comparing deals for mobile, broadband, insurance and more.
  • Keeping an eye on your bills and letting you know if these go up.
  • Offering Open Banking allowing you to connect your accounts.
  • Providing personalised money-saving tips and advice to help you.

Open a savings account

Separate from your current account, you might find it worthwhile opening a specific savings account and not worry about accidentally eating into your savings.

Not only that, but many savings accounts earn interest. This means that the more you have in your account the more money you’ll get from your bank or building society.

There are lots of different types of savings accounts on the market to choose from such as cash ISAs, bonds, and easy access accounts. Each has its own benefits therefore it’s about figuring out which is the most suitable for you based on your own financial needs.

Prioritise paying off your debt

While this might sound surprising, one way you can start saving is by clearing your debt. This is because you might be being charged interest which makes it difficult to save or your debts end up costing more than what you can save. However, if you’re a customer of Lowell and working with us to pay your debt then you won’t be charged interest on your debt.

You can get in touch with other organisations such as National Debtline and Citizens Advice who can help give you free and unbiased guidance on which ones you might want to prioritise and pay off first.

How to start saving for a house

Are you looking to start saving money for a house? We understand that when you first start trying to save up for a deposit it can seem like it’s going to take forever. There are many ways for you to put money aside and get on the property ladder.

How much do you need for a mortgage deposit?

Once you’re ready to buy a home, one of the first things you need to do is save up for a deposit. Usually, this would be around 5% of the price of the house that you’re interested in although this does vary depending on the provider. For example, if a home costs £125,000 then you’d need at least £6,250 (5%) at the ready for a deposit.

If possible, it is better to have more than the minimum amount to put down. This is because it can impact how much your monthly mortgage repayments are. For example, they may be cheaper, or you may find better mortgage deals that include lower interest rates. 

For a rough estimate, you can use MoneyHelper’s mortgage calculator tool to work out what your monthly payments might be.

Take advantage of government schemes

When it comes to saving money for your first home, there is a range of government schemes available that offer financial help.

For example, you could look into getting a Lifetime ISA (LISA). Although this is only for first-time buyers that are buying a property worth £450,000 or less.

General savings accounts are great for building up your pot, but with a Lifetime ISA you’ll receive a 25% additional bonus from the government to go towards your home. The official GOV.UK website has more information about the Lifetime ISA

You can also find out more about which other benefits you may be eligible for you by taking a look at our benefits calculator, powered by entitledto.

Make sure you have enough money for additional costs

Whilst paying for a deposit might be your biggest concern, it’s important to remember that there will be other costs to think about. Buying property is a big commitment and it’s important that you have enough money to cover everything that comes with owning a home.

Here are some of the extra costs you can expect to pay:

  • Monthly mortgage payments
  • House survey costs
  • Solicitor or conveyancer fees
  • Stamp Duty
  • Removals costs
  • Ongoing costs – This includes household bills, maintenance and repairs, buildings insurance, and council tax

You can also potentially save further money on these by comparing quotes for the services you need. If you’re looking for other great money-saving tips, you should check out our guide on how to create a budget and manage your money.

How Lowell can help you

At Lowell, we’re here to support our customers, so if you’re ever struggling with your debt with us then please do get in touch with our friendly team who are there to listen and see how we can help.

Alternatively, you can get free financial support and guidance from other independent organisations.

For more information on a range of financial topics, check out the Lowell blog or our debt guidance hub for anything debt-related.

Published by Stephanie North-Shaw on 29th December 2022

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