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As we emerged from the various lockdowns over the past 18 months, there was a pent-up desire to spend money – retail therapy can make us feel good, but do we really need all those impulse purchases and where does saving fall into the equation?
The recent Consumer Council Insights Survey highlighted that just over half (54%) of people in Northern Ireland say they always have money saved for a rainy day while 2 in 5 (42%) of NI adults have £300 or less to spend after essential outgoing each month.
If you are constantly struggling with your budget, it might be a matter of changing your money mindset. As part of Savings Week 2021, this article sets out how to help you start on that saving journey towards improved financial wellbeing.
Having a money mindset is recognising your own beliefs and thinking differently about money in a way that will enhance your life. It’s not necessarily about making yourself rich but understanding how you feel about and react to money and the emotional connection you have with it.
Even if our goals feel unattainable, we can change our thinking - a regular, small deposit or mindset shift could be enough to stay on track.
FOMO (or Fear of Missing Out) can cloud our judgement when it comes to spending and saving money. Your brain can be quickly distracted when other exciting things or events come along, and you want you to spend money on them. Having a target is great but it’s important to ask for support which will enable you to keep up the momentum. Be upfront and honest with your friends and stay connected to the outcome of your savings goal.
Many people like to have benchmarks along the way, and little rewards. At each milestone, you might do something small for yourself. What you’re doing is amazing - allow yourself to recognise the significance of what you’re achieving.
We need to give ourselves the best possible opportunity to reach our goals. The Consumer Council’s free, online budget tool is a great place to start. You can enter your income and expenditure figures, and the tool provides you with a report identifying where your money is spent, and what money you should have left over at the end of the month. Any money that hasn’t been accounted for in your monthly expenditure could then be put towards your savings.
The type of savings account you open is important to ensure it meets your needs. There are a range of different savings accounts out there and each one will offer different benefits to suit different people. Listed below are the different types of savings accounts Progressive has available and a brief explanation for each account.
‘Does what it says on the tin’… Instant access accounts are a good option if you want to save but also want to have quick access to your money when needed. Instant access accounts are suitable for savers who want to be able to withdraw their funds as often as required. These accounts often have a variable interest rate that is paid yearly.
Bonds are suitable for savers who do not need access to their savings and can invest a lump sum of money for a fixed period of time at a guaranteed or variable interest rate. Progressive offer Bonds with fixed rates of one to five years. Bonds can often offer higher interest rates, but they do not afford the flexibility of withdrawing from them that an Instant Access account does.
Save without having to pay tax on the interest. Individual Savings Accounts (ISAs) provide options to encourage you to save without having to pay tax on the interest you earn. They too offer instant access to your money without affecting your ISA allowance.
These accounts are suitable for savers who wish to invest on a monthly basis. Often, Regular savings accounts offer limited access, but this is not as restricted as a Bond.
Children's Savings Account
It’s good to get into the savings habit early, so with this in mind, you might want to open a children’s account for your kids. Like adult accounts, there are a range of options to choose from, but children’s accounts are usually managed by a parent, guardian or grandparent, rather than the child themselves.
So now that you have a better understanding of saving and where to start, why not take that first step, get into the habit of saving regularly and watch your money grow!
To open up a savings account with Progressive, you can call us, email us or pop into one of the 11 Progressive Building Society branches across Northern Ireland to find out more.
We’d love to talk you through the mortgage process and help you find a suitable product. For more information or to apply for an account, you can call us, email us, pop into one of our 11 branches. We look forward to hearing from you.