If ever there was a year when saving should have been easy, it was 2020.
There were no weddings to attend, no hen parties, baby showers or expensive gifts for the happy couple. We didn’t travel to any bucket-list destinations. Heck, we weren’t even eating out or commuting because, lockdown.
Yet 61% of us failed to create the savings plan of our dreams during the pandemic. In fact, one in 10 of us has no savings to speak of after what was possibly the quietest year of our 20s and 30s*.
Of course, spending is way more fun than saving and we’ve all depended on a few extra pick-me-ups lately – whether it was a tasty takeaway or a new loungewear set (times three). It doesn’t mean we want that financial buffer any less, but saving for the future just seems a little challenging.
“While spending may come naturally to us, saving doesn’t – even when we have the money to spare,” says personal finance coach Esther Bangura, founder of budgeting website Boss Of My Money. “Actually, saving can become a no-brainer when you automate it using mobile apps such as Yolt, which do most of the thinking for you.”
Yolt’s the smart-thinking money app that helps us get into better habits with our finances by encouraging us not only to save smart, but to spend smart.
Just in time for 2021 (and what we’re hoping to be our best financial year to date *crosses fingers*) the app has a whole suite of new features, including a virtual Money Jar for stashing your savings and Jar Boosters to help you fill them, by automatically pocketing spare change, windfalls and cashback rewards.
“Rather than seeing saving as a restriction, learning good habits to manage your money means you can still spend, but in a guilt-free and debt-free way,” adds Esther. “I firmly believe you can have your cake and eat it too when it comes to money.”
So, whether you’re saving for a house deposit, a holiday, or just striving for a little spare cash at the end of every month, these are the effective habits you should know for spending smart and saving smart in 2021 and beyond.
1. Use an app to track your spend
The Yolt app helps you to ‘unthink money,’ meaning you spend less time worrying about saving and more time actually doing it. Signing up is free and nets you a contactless Yolt debit Mastercard to use for your transactions. Instead of adding all your earnings into one pot, you can top up your Yolt account with fun funds, and the app will deliver handy tips and financial reminders on the best ways to manage it.
For example, Yolt will nudge you on payday to set a little something aside or remind you to save a slice of that work bonus that you’d usually be quick to splurge. It’s all part of getting into good routines with saving that will last you long beyond 2021.
2. Pay yourself first
Paying yourself first means giving your future self a portion of your salary as soon as you receive it. For this, money-saving expert Esther suggests an 80/20 split – that’s 80% for essential bills, debts and living with 20% set aside for savings.
3. Establish clear saving goals
There’s creating a buffer for emergencies – AKA the whole of 2020 – and then there’s saving up for something special, where you have a target amount in mind.
To set up a wedding fund, for example, Esther recommends: “Ask yourself, what might I need a substantial amount for in the coming months or years? Clear goals will help you stay focused and consistent because you know there’s a worthwhile splurge on the other side.”
4. Separate your savings
This year, Yolt’s got a brand-new Money Jar, which collects the change you round up with your Yolt Card, as well as any refunds or cashback amounts into a separate fund for whatever comes your way. When you physically separate your savings from your spending money, you won’t associate it with cash that’s there to burn.
5. Keep the change!
“One great way to boost your Money Jar is by saving loose change from your purchases, as if you were using cash,” says Esther. “Imagine you were going to spend £10 on a meal deal, but instead, it costs £7.50. If you were surprised to save £2.50, why not set it aside for another day?”
Yolt’s Round Up Jar Booster feature helps you do this automatically by collecting spare change on every purchase. To keep you motivated, Yolt’s Money Jar Challenge encourages users to set aside at least £8 a week, which amounts to an amazing £416 over a year – and you’ll barely even notice it coming out!
6. Be honest, but not just with yourself
If you’re in a couple and you’re saving towards a joint goal, like parenthood or a house deposit, make sure you discuss your financial situation openly first, because you don’t want to be the only one doing the heavy lifting. “Communication is key,” says Esther. “So many couples launch into budgeting before they’ve taken the time to discuss their money beliefs – or worse, debts. Budgeting strategies are worthless without that transparency.”
7. Set aside the small wins
Sometimes getting an online refund can feel like winning free money, which goes straight out on another lockdown pick-me-up. With Yolt, these seemingly small financial wins amount to big savings inside the Money Jar.
That’s because you can now switch on automatic Jar Boosters like The Set Saver, which will move money from your Yolt Account into your Money Jar, helping you to pocket windfalls like refunds, salary increases or bonuses.
You can even pocket rewards from some of your favourite retailers (from Nike to Asos) with the Cashback Collector, to bring you financial rewards on purchases you would have made anyway.
8. Don’t sweat the bad months
If you fail to stick to your budget one month, it doesn’t mean you’ve failed. One essential habit for saving is looking beyond your bad months and making up for it incrementally over the coming months.
9. Review your existing outgoings
“Could you save money on your bills?” asks Esther. “With businesses competing to gain new customers, there could be a deal to be had elsewhere.”
At Yolt, handy in-app guidance is aimed at saving you money where you least expect it, whether it’s a better price on your phone insurance or switching to another electricity supplier. Even if you’re not locked into a contract, when you set daily, monthly or yearly spending budgets, Yolt will ensure you never overspend again, thanks to smart nudges that tell you when you come close to your spending limits.
10. Start today – no matter how small your savings seem
The biggest thing stopping us from saving? Not getting started. Most people delay saving money because they think they need to earn more, as Esther explains.
“Start saving with what you have access to now because the key to starting a savings pot is building great habits. When you have more money, you will already know how to spend it well. After all, we all have to start somewhere.”
*Yolt Consumer Saving Survey, July 2020