The hardest part of actually saving for your retirement, is saving money. We all understand and appreciate that there are so many necessary and unavoidable costs that add up, whittling away your monthly income in a blink of an eye.
The typical life and savings cycle for most people across the UK starts with leaving school and finding your first job, which often does not pay particularly well, resulting in you struggling to save what little income you receive and what you do, you want to enjoy.
As you progress through the decades your priorities change with your twenties typically focusing on to trying to save a deposit for a house, your thirties paying for children, your forties on your children and home, and then when you enter your fifties, you start thinking about retirement. The issue here lies in that if you only begin saving for your retirement in your fifties, it will be incredibly difficult for you to retire at your desired age on your required income.
It is imperative that you save money throughout your working life. Here are seven tactics to trick yourself into saving on a regular basis:
Set up a Standing Order
Setting up a standing order is an easy procedure which once set up, requires no further action from you (unless you later decide to increase your savings amount!). It is best practice to have your standing order date set around the time that you are paid each month.
By doing so, you are reinforcing the classic “out of sight, out of mind” mentality ensuring that you will not miss the sum that is automatically deducted from your account on a monthly basis. You will soon adjust to your new monthly income and will feel that you have won a windfall when in time you check the balance of your savings account.
When setting up your savings account(s)/pension, it is a good idea to ask the provider to have all of your statements and correspondence set up to be accessed solely online with an email prompt.
While you may not completely forget about the account, it should soon lose the status it would hold if you were receiving monthly correspondence in the post.
Name your account specific to a goal
A little psychological trick you can use is to give your account an important name. For example, you might be more motivated to pay into an account that you label “My Dream Retirement in Australia.”
If you tell your friends about the account name, and the name is memorable enough, they are likely to ask you about it, which will motivate you even more.
Download an Application (App)
Today you can download all sorts of apps that help you save money. They have various helpful features such as countdown timers and budgeting sheets to inspire and help you to save.
You can even download money saving apps that help you to save for specific things such as holidays and pensions.
Make it Into a Competition
Perhaps you have a friend who is saving for something in particular. Possibly you are both saving for the same thing. Either way, you can compete against each other to see who can save and earn the most in returns.
Give up a Habit
If you have a habit, such as smoking, and you have been wanting to give it up, you could take this as your opportunity. Give up the habit and redirect the money that you would be spending into a savings account.
You could also decide to reduce any unnecessary expenditures such as a magazine subscription. There are so many magazine and news articles available free of charge online that you could make use of, or you could loan out an interesting book from your local library.
Bank any unexpected money
If you receive an inheritance, win some money, get a tax refund or a raise at work, you should consider putting it straight into your savings account.