How to start saving money

A guide to starting a savings plan by Furness Building Society

Get into the savings habit

Whether it’s £10 or £100, putting money aside each month can be a lifesaver down the line. After all, we’ve all found ourselves faced with costly, unwanted expenses like a broken boiler, a leaky roof or a punctured tyre. Getting into the savings habit now can help ease the burden of those unexpected bills in the future.

Building a savings fund takes time and a little more effort than simply opening a savings account (although that’s a very good start). Firstly, you’ll need to find the right savings account for you and ensure that you’re financially secure enough to set money aside regularly.

To help you do that, we’ve pulled together our six top tips to help you start saving money and to get your finances on track.

Tip 1: Pay off any debts first.

Before you even consider stashing your cash somewhere, make sure you’re debt free. It will usually make the most financial sense to use any extra money to pay off any debts before you start saving. This is even more important if the interest cost on your debt is more than you’d earn through a savings account. 

For example:

Credit card balance: £500

Interest: 20%

Annual cost: £100

Savings account balance: £500

Interest: 2%

Annual earnings: £10

In the case of this scenario, the cost of debt is £100 versus a £10 reward for saving. So assuming you have the same balance throughout the year, you’d be £90 better off repaying the debt. 

Tip 2: Check if you can overpay your mortgage.

Tip 3: Question whether you’ll need access to your money.

Tip 4: Think about how regularly you’ll want to put some money away.

Tip 5: Find out if you’ll pay tax on your savings interest.

Tip 6: Consider a LISA if you’re thinking of buying your first home soon.

Next steps

Do you have any questions?

We understand that everyone has a unique set of circumstances and our team will be able to help guide you through the savings options that are most suitable for you. Please get in touch by visiting us in branch or giving us a call on 0800 781 4311.