Five super-easy ways to start saving now

Choclolate money
Use chocolate money to start your savings
“You could earn enough to create an emergency fund by selling unwanted belongings in online auctions,” Penny Golightly
  • | by Derri Dunn

With most of us having a plethora of debts and bills to service each month, the notion of amassing a savings lump sum can feel like a pipe dream.

We all know the golden rule is to make repaying debt a priority. But if your washing machine packs up or you prang the car, a stash of fall-back cash could halt a terrifying spiral of debt.

“Having a small emergency fund, say £1,000, can help you to cope with occasional setbacks such as unexpectedly large bills,” says money-saving blogger Penny Golightly. “It could also be useful in preventing you from being hit with penalty charges due to missed payments, as it provides a buffer from month to month.”

If you feel like you’re living precariously day to day, kick-start 2015 with a savings strategy.

Cash in your attic?

In the wake of Christmas, were you lucky enough to have received a bonanza of gifts? If so, perhaps it’s time for a clear-out of cupboards to see what you can sell to turbocharge your savings.

 “If money's already tight, and you can't budget and cut back any harder than you've already done, there are still a few ways to find some extra money,” says Penny Golightly. “You could earn enough to create an emergency fund by selling unwanted belongings in online auctions.”

Car boot sales will shift all manner of miscellany in one morning, while big-ticket items can be posted on sites like Preloved or Gumtree, or auctioned off on eBay.

As the money rolls in, don’t slaughter that cash cow with an impromptu spending spree – stable it immediately in a suitable savings account.

Make some cuts

Once you’ve made your first savings deposit, it’s all about keeping the momentum. You can get a steady drip-feed of cash by just working out what you can live without.

If you buy a £2.50 latte on the way to work, can you bear to reduce it to three days a week instead of five? Doing so and putting the money into your savings would amass £280 in a year – plus interest.

Perhaps your new year’s resolutions could help trim the financial fat – If you’re quitting smoking from a 10-a-day habit, you could ring up around £1,500 in a savings account over the year instead – now that’s motivation!

Even a daily 50p chocolate fix equates to a saving of £182.50 in a year, so the smallest lifestyle cuts can still have an impact.

Little and often

Taking a chunk from your salary on payday and locking it away in savings can feel like it has more impact, but it might leave you short by the end of the month.

Instead, weekly or even daily savings may work better for you and help you stay in control of your budget, particularly if you use online banking or apps on your phone.

“Compare what rates of interest are available for the sort of sum you’re looking to build up and start paying in a regular amount, even if it’s just a few pounds a week,” said money expert Matt Sanders. “You’ll be surprised how quickly you forget about the money coming out of your account and going into your savings pot.”

If you can sweep cash aside at the press of a button, there’s no need to turn it into a monthly ritual of going into branch, although some people might prefer to use their online banking to lock cash away before they have a chance to fritter it.

“Many people find it simplest to 'automate' their savings by setting up standing orders to come out of their current accounts shortly after their monthly wages have cleared," said Penny Golightly. “If you get a pay rise, put the extra money into your savings – you won't miss it if you aren't used to spending it in the first place.”

Lock away or rainy day?

Fixed rate savings accounts and ones that have long notice periods to access your cash can have competitive interest rates, but they might leave you high and dry if you need to access your funds.

“When choosing a savings account, check that there are no penalties for withdrawing your money at short notice. There’s little point in having emergency money in a 90-day notice account,” said Sanders.

Think outside the (money) box

When you have a bit more set aside, you want to make sure your savings are working hard to generate as much interest as possible.

Some current accounts now have interest rates that beat those offered by savings accounts and they also keep your cash very accessible.

Thanks to the cumulative effect of compound interest, the longer you save, the quicker it builds up. Get into the habit of small, regular savings and you could finish the year with finances that allow you some breathing space.

What can you cut out to help build your savings? Let us know on Facebook and Twitter