Everyone should aspire to have some savings, but how do you know if you’re saving enough? You might be able to live comfortably enough on what you have, but should you be setting aside more than you are? This guide will cover some warning signs that your savings account needs topping up as soon as possible.
You don’t have a savings account
Even if you aren’t spending all your wages every month, not moving your money into a separate savings account is a habit you need to break. There are so many different types of savings accounts available that you’re definitely not making the most of your money if you don’t have one. If you want to learn about your options, see more on Wealthify’s website today.
You don’t really think about saving
If you don’t even know what savings you have or how much you set aside each month, chances are you’re not saving enough. It’s important to have a plan in place that keeps you accountable because loose change probably isn’t going to cut it in the long run. Putting random coins into a piggy bank might have been enough growing up, but as an adult, you need to think more carefully about your future goals and how you’re going to meet them.
You’re in debt
It’s difficult to save when you’re in debt because all your spare cash goes towards making repayments. Getting your debts cleared as soon as possible should be a priority, especially if the money you owe has a hefty interest rate. The longer you take to pay off loans the more money you’ll end up paying back in the end. If you’re really struggling, you can always speak to a financial advisor to see what they can do to help.
You don’t have a pension plan
Young people are notorious for not thinking about their pension, but really you need to start saving for retirement now. It doesn’t matter how far off that is or what expenses are going to come before then, having a pension is a must. It is difficult to save into your emergency fund, think about buying your first home, and put aside money for retirement at the same time, but even just a little every month can make a big difference further down the line. Make sure you ask your employer about company pension schemes before opening an account yourself.
You’re spending a lot on non-essential things
While it’s important to enjoy life and treat yourself, if you have no money left over after spending money on days out, takeaways, and home comforts, you could probably be putting more money aside each month. Ideally, you should be saving 20% of your income every month according to the 70-20-10 rule, but if that’s not doable for you, consider cutting down on leisure activities for a while to build up those security funds. Make sure you take a look at your savings and adjust your approach today.