Most of us are probably well-intentioned when it comes to saving but, well, life happens, doesn’t it? There is always something to buy – whether it’s the kids’ school shoes or a DIY job around the home.
Then, come September, Christmas seems to loom large and we all start to think about where the money is going to come from to pay for the festive season.
The kids start to write their Christmas lists and the careful negotiating begins.
“I don’t really think you need to ask Santa for one of those – it’s too old for you”.
“Are you sure you would play with that?”
“I think that’s for a child a little bit younger”.
“If you ask Santa for this, I don’t think you can ask for that as well”.
If you’ve been disciplined, you’ve been squirrelling a little aside each week, but if not, you may well feel slightly panicky.
A while ago I read about a great idea which works well if you have internet banking and a related online savings account – and it’s a piece of cake to put into practice.
If you don’t have a linked savings account, why not start one just for Christmas or holidays or whatever big splashy exciting goal you may have.
A straight savings account is best as if you put cash into an ISA it really needs to stay there for the interest to accrue. You just need an account you can dip in and out of without penalties.
So, to be clear, this is what you will need:-
- a current account you can access online
- an online savings account
- the ability to transfer money between these accounts online
My accounts are with Santander and I can move money between accounts with a few mouse clicks. For the purposes of this exercise, it’s likely that your savings account will need to be with the same bank that provides your current account.
Here’s what you do.
EVERY DAY go online and check the balance of your current account.
If your balance is an odd amount – and it usually will be – simply round it up to the nearest £5 or £10 and transfer the extra to the savings account.
Rounding up to the nearest £5 …..
For example, your balance is £127.99.
Then you’d move £2.99 over to your savings account so your balance is £125.00.
Or your balance is £158.27.
Then you’d move £3.27 over to your savings account so your balance is £155.00.
Rounding up to the nearest £10 ….
If your balance is £244.50
Transfer the £4.50 leaving you with a balance of £200.
Sometimes you will move ridiculously low amounts – even under a £1 but stick with it.
I’ve saved hundreds!
I have been doing this for years now and I have saved hundreds of pounds and I have barely noticed the money has gone from my current account. Rarely in that time has there been a day when I’ve transferred more than £2-£3.
It’s actually become a bit of a game for me – and I do not have that many transactions leaving my current account.
It won’t make you a millionaire, but it won’t hurt either!
It’s an easy and relatively pain-free way to say a Christmas fund – as long as you remember to check your balance.
Many of us can afford to save a little each day – even if we just give up our morning takeaway coffee.
Why not give it a try? You may be surprised how much your savings will grow in the next 6 months.
It’s NOT about accruing interest on your savings though.
If your savings account has a decent interest rate (although few of them do these days), the extra benefit is that if you choose to leave your savings there to grow further, you might earn some interest but this isn’t the main reason I do this.
If you are looking to make a return on your investment, then you should be looking at pensions, ISAs or even, if you’re brave and have a bit of cash to play around with the stock market.
You might also find this form of saving easier than giving up your beloved daily coffee, although reining your occasional spending (you know, all those treats and fripperies you can’t resist), will free up lots of cash you could better spend elsewhere.
Let me know how you get on!