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5 Simple Tips to Grow Your Savings

No one likes to be in red. It signifies danger, a warning or uncertainty. The same can be said for your bank account. Watching those numbers roll down sure gets that heart rate going! Finances can be awkward to talk about; many people don’t like talking about money. It seems private. The fact is, every person will be having the same concerns as you are…

Perhaps you’re smart, are goal-driven, and put a bit away into a secret savings account each month upon receiving your paycheck. Saving is healthy, and as with anything health related, it’s also hard. So here are 5 simple tips to help you grow your savings and gain control.

1. ISA vs AER

This is about to get technical, so bear with me — I promise it’s not as complicated as it sounds. A more advanced method is to grow your savings by compound interest and AER. In layman’s terms, this takes into account the interest you’re paid by the bank on top of the original amount you’ve invested, with an added interest on the overall sum that you earn. Got it?

AER goes one step further and it’s calculated according to 3 factors:

  • Amount of gross interest earned p/year
  • How many times interest is paid annually
  • Whether interest earned is compounded

So, for example, if the bank gave you a 1.5% AER you would earn 1.5% on your investment per year. For an investment of £100, you would earn an extra £1.50 each year in total interest.

Savings requires a little extra effort. You could be making much more money without realising, and who doesn’t want that? Check that you’re earning a competitive rate of interest and ditch your old deals.

2. Track your spendings and savings

Most banks provide you with a statement of your transactions. That’s great but sometimes unhelpful. To keep better tabs on your spending, try using a budget tracker like Mint. This allows you to see where you’re biggest outgoings are, what you can cut back on, so that you can create a budget of monthly spend. Monzo is great for this too; you can set a monthly budget for how much you want to spend and set up ‘no touch’ savings pots. You can also earn up to 0.65% AER certified with the Financial Services Compensation Scheme (FSCS).

Once you’ve got a handle on your expenses, identify where you think you could save money or cut spendings. For example, quit the coffee. Buy yourself a flask and make a brew to travel with or bring with you on your walk. The average coffee costs about £3; if you’re getting one a day, that’s £21 a week and £84 a month. Did you shudder? When you need a coffee fix, bring your own flask or reusable cup to get some money off and save the environment. Pret offers 50p discounts when you use your own cup!

3. Have a goal

You can set up a direct debit, so that you’re saving without even thinking about it. When you next check your account, you’ll see the numbers rolling up. Think of it like paying yourself back!

4. Use a cash saving platform

Some popular platforms include Raisin UK, Flagstone, Octopus, Hargreaves Lansdown Active Savings and DCMe. Some do more work for you, others are more intricate. Find the one that suits you best using the linked guide.

5. Start a side hustle

If you’re entrepreneurial, this side hustle could really take off and become a more sustainable way to earn money. Companies like Whatsapp and Salesforce started out as competitors — both of which are now multi-million dollar industries; Depop users have re-sold their clothes to earn some quick cash, so why not give it a go?

To sum up…

Written by Naida Allen
WellBe is spearheading the way to a brighter future for corporate wellness. Our innovative portal is scientifically designed and tailored to each individual employee to improve their wellbeing. We specialise in a range of services from coaching and therapists, to meditation and reading materials. Our aim is to reduce workplace stress that costs UK businesses £42 billion per year. Get in touch with us by visiting our site for more information.

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