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Laura Moore looks at how to get out of the tiresome cycle of dipping into your savings, and make them grow instead
You get paid, you put some money into your savings, but by the end of the month it is out again and feels like you have made no progress at all. Does this sound like you?
This tiresome cycle is making it so hard to actually grow your savings.
Know that you are not alone though, because according to savings stats from the FCA, up to a third (34%) of UK adults had either no savings, or less than £1,000 in a savings account.
Every time you dip into your savings, you are stealing money from your future self.
And there might be a number of reasons why this is happening…
- Maybe you are putting too much in there and have so little to survive off of, that is becomes unrealistic you won’t dip in
- Maybe you don’t feel excited by your financial goals
- Maybe you keep getting FOMO and dipping into your savings to pay for things all of your friends are doing…
So let’s explore the different ways to stop dipping into your savings…
Be realistic with your savings goal
Very commonly, people will try to save a really large portion of their income in the hope they can grow their savings quickly but they are setting themselves up for a loss.
Whilst it would be amazing to be able to save 50% of your pay, it can leave you with so little money for the rest of the month you have no choice but to dip into your savings.
You are better off saving a much smaller amount and building it up over time for consistency, then large amounts of money you keep taking back from.
Connect with your goals and your WHY
If you are saving for something big and exciting like a trip or a house or a business venture… get excited by it! Tap into the emotional reason for saving this money.
Connect with that future version of yourself and the life you are creating for them. The more you can feel emotionally connected to this goal and your reason for saving, the less likely you are to take from your future self.
Have a guilt-free spending pot
If you find yourself dipping into your savings so you can buy random things, put a small amount of money in your monthly budget for a random impulse purchase so that you still allow yourself the fun and freedom to make random purchases but without it affecting your goals.
Money is there to be enjoyed in the now as well as saved for the future. So find that happy balance for you!
Lock away your savings
Sounds like a drastic measure, but if you really struggle with touching your savings and sabotaging your financial progress then put friction between you and your money.
Save it in an account that you don’t have easy access to. Take the app off of your phone. Save your money in an account that is not attached to yourmain bank account so its not so easy to transfer money around.
Or maybe even give your savings to a friend to look after….
Photo Credits: Pexels
Laura Ann Moore is a certified financial coach, financial wellbeing speaker,and host of the Mind Money Soul podcast, talking about finances in a fun, judgement-free way to help people feel good about money, get financially confident, and build wealth.