Melanie Wright
AUTHOR Melanie Wright| CREATED 18 Jan 2016

I live for now, but want to save – Help!

If you are used to buying what you want when you want it, and don’t have anything left to save at the end of the month, it’s time to take a long hard look at the way you manage your finances.

Tempting as it may be to splash your cash whenever you have some to spare, you need to consider the longer-term consequences of failing to put anything aside each month. For example, how would you cope if you weren't able to work for several months, or if you were suddenly hit with a major unexpected expense? Here, we look at the best ways to kick start the savings habit...

Saving needn't be a struggle

Finding the money each month to save comes down to good budgeting and making some tough decisions about your expenditure.

'Unfortunately it is not possible for most people to save for the long term as well as spending money on every luxury available,' says Martin Bamford, managing director at independent financial advisers Informed Choice.

'Expenditure needs to be prioritised and decisions made about whether short-term gratification is preferable to long-term financial security. For many people this means stopping or reducing expenditure on such luxuries as alcohol, tobacco, satellite television and eating out.'

The best way to establish where you can make savings is to go through your bank statement and write down a list of all your outgoings. Separate these into 'essential' and 'non-essential' categories and then see how much you can trim off the latter.

'Getting the right balance between having fun today and saving for tomorrow is a real challenge for many people who have come to expect a certain standard of living,' says Mr Bamford. 'Sometimes the simple act of making a detailed budget is enough to improve spending habits and free up the cash for saving.'

Best homes for your money

Once you have worked out how much you can afford to save each month, think carefully about your short- and longer-term financial goals, and how much you need to commit to achieve both.

Your first priority should be to set some money aside as a rainy day fund which you can access immediately in the event of an emergency. Consider using an easy access cash individual savings account (ISA) for this purpose, as returns will be tax-free. Alternatively, you could think about a regular savings account, as these require you to pay in a set amount each month – usually between £20 and £250.

Once you have built up some short-term savings, think about the longer-term. For example, are you hoping to get married eventually, buy a home, or spend time travelling? If you have an appetite for some investment risk, and are prepared to tie up your money for five to ten years, then you may want to consider investing in a stocks and shares ISA to help you achieve your aims. Always seek independent financial advice first if you aren't sure which funds to choose to build a balanced portfolio.  If you don’t have an adviser and would like to find one in your area, check out our ‘Find an Adviser’ tool.

Wherever you decide to save, set up a direct debit so that you don't have to remember to put money away each month. The chances are after a few months you won't even notice it disappearing from your account, but you will have peace of mind that you are building up a nest egg for your future – whatever it may hold.

If you want to find out how a professional adviser could help you take your financial planning to the next level, check out Advice Matters for everything you need to know.


Melanie Wright

Financial journalist Freelance

Melanie Wright is an award-winning freelance financial journalist, and former Deputy Editor of the Daily Telegraph's Your Money section. She contributes regularly to the Sunday Times, Daily Telegraph, Times and Observer, and wrote the Sunday Mirror's Money pages for more than a decade. She is also a regular commentator on television and radio, having been interviewed on BBC Breakfast, BBC News Channel, Channel Five News, ITN News, GMTV and LBC Radio.