The cost-of-living crisis is still at the forefront for many of us as we head into the new year. While we’re getting news that energy bills might be lower later in the year, food prices are continuing to rise and workers aren’t being paid enough to balance out the increasing prices.
There’s a lot of financial pressure being put on many of us right now. However, now more than ever, it’s worth thinking about setting aside some of your income for your savings pot. Want to know more about how to get into the savings habit and why savings are necessary? Here are some ideas to help you in 2023.
Why are savings important?
By getting into the habit of budgeting to accommodate savings, it’s possible to have contingency cash should things not go to plan. Your car might need repairs, or the boiler might break. Getting these essentials up and running again can be costly. By having some money set aside for this type of issue, you’re well-placed to not dip into your main income.
Another reason why you might need to have savings set aside is if you’re planning a career change or there are some major events coming up. For instance, if you’re heading back to education, savings can help keep your household ticking over. Or if you’re having a baby, savings can help to even out maternity pay.
How to save
There are several ways you can start to save.
First, consider clearing your debts. Paying off any outstanding debts will eventually mean one less regular expense that you must account for each month.
Look at the debts you have in place. If you have a couple that have high interest rates, it might be worth looking at using a personal loan instead to help clear them. From there, you have a more manageable loan to pay off each month – just make sure you can meet the repayments on this new loan beforehand.
Rethink your budget
Another way to save is to look at your budget. Work out what your income is and what your outgoings look like. From there, you can see where you could make changes. For instance, could you swap to a cheaper supermarket? Is there an alternative subscription service package available? Could you get a better deal from your internet provider?
Any savings you make here could then be channelled into our savings account.
Assess your bills
We’ve already touched on the cost-of-living crisis. Now is the perfect time to look at ways to reduce your bills. For example, a smart meter will tell you how your energy usage looks each day, week and month, so you can get an idea of how this will look and where you can cut back.
It is possible to save in 2023. It’s important that you know how much you’re spending and where you can reassess in order to start building up a savings pot this year.