You are Never Too Broke to save Money – Truth or Fiction?

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Most articles on how to save money are targeted at people who have at least some disposable income. And although tips on cutting back on expensive holidays and luxury items can be useful, they don’t apply to those living from payday to payday. In this article we will provide some tips on how to save funds for those who are still struggling, even though they have cut expenses left, right and centre.

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A very good approach to saving money is to have your entire salary deposited into a savings account or an investment account. Do some research and find the best savings account that gives you the highest interest  nicview login   rates. Transfer only the money you need for bills from your savings account to your cheque account. This is a great way to save as there will only be cash in your cheque account for your monthly expenses while the rest of your money generates interest in your savings account.

There is a lot of truth in the belief that what we tell ourselves has powerful influence on our actions and ultimately, our realities. Saying “we can’t” somehow becomes a self-fulfilling prophecy and we get stuck believing that nothing we do makes any difference. Changing your mindset will change your actions which will ultimately change your circumstances. Remove “I can’t” and “I won’t” from your repertoire, switch to “I will do whatever it takes to get a handle on your financial situation” and you’ll see solutions starting to come into your life (which may, in fact, have been there all along). Your attitude and your choices can make all the difference, and the same applies when it comes to finding ways on how to save money.

If your basic expenses exceed 50% of your net income, it’s not easy to stick to a realistic spending plan and save money. You could sell your car and downscale to save on your insurance and petrol consumption. You could move to a smaller place, closer to your work; cutting rental/bond repayment and travel costs. You could send your kids to a cheaper school or rent out one of your rooms. And while none of these options seem very appealing, if you want to create ways to save money, no option should be off-limits.

If you’ve cut expenses everywhere you can and you’re still not able to save money, you will have to start finding ways to generate extra income. Many people have managed to get themselves out of debt by cutting expenses as well as generating additional income. Ask for a raise. Have a jumble sale. Find a new job. Sell stuff on ebay. Start a business on the side. Making and saving money requires substantial effort, but it can definitely be done.

Even people who live from payday to payday can save money. Having your salary deposited into a savings account or an investment account with the best interest rates should be the first step. Saving money also requires a change of attitude and you may need to reconsider options that are regarded as off-limits.

Sadly I suppose it’s only a matter of time before Stannah has to intervene in transporting Brucie from the top to the bottom of that treacherous looking staircase in Strictly Come Dancing. But it’s really fantastic that Bruce Forsyth has never truly stopped working – what a great role model. I’m not suggesting you work until you are an octogenarian, but why not take the example of Brucie and apply it to your savings? So, because you’re my favourites let’s investigate the merits and pitfalls of a savings account with an introductory (Brucie) bonus.

Now unless you’ve been incarcerated in Len Goodman’s care home for the last couple of years, you’ll know that interest rates paid on savings accounts have witnessed a dramatic decline recently. One way to maximise the amount of interest you get on your savings is to open an account that pays you a bonus on top of your interest rate. In fact, some of the best savings accounts out there at the moment pay a bonus, but beware: you need to play a good game to continue to get the best rate…

Conditional Bonus. A bonus that is dependent on you behaving in a certain way; for example, not making more than two withdrawals in a year. If you don’t adhere to the conditions of the bonus it will be reduced or even lost completely.
Unconditional Bonus. A bonus that will be paid regardless of how you operate your account.
Both types of bonus are paid as part of your interest rate. For instance, you might receive a rate of 2. 50%, but 1. 50% of that rate is a bonus, so when the bonus period comes to an end your account will only pay 1. 00% (assuming the bank of England Base Rate doesn’t increase). It’s the dance equivalent of going from the Argentine Tango to having to dance to “The Birdie Song” (although admittedly not nearly as humiliating).

But you don’t need to be Brucie or even an Alesha to be a great mover (well, not when it comes to your savings anyway! ). Simply be alert to when the bonus on your savings ends and be ready to move again. Most bonuses last for a short while, typically a year – so set an alert on your phone or computer, or write it down in your diary or calendar to review your account.

Now, I should say that savings accounts with introductory bonuses are not always the best accounts available for everyone. If you are prepared to lock your money away for a set period, you might find that a Fixed Rate Bond might be more appropriate. Similarly, an ISA is always worth a look as well – there are even ISAs with introductory bonuses! Remember that for any non-ISA accounts you will have to pay tax on interest you receive so when comparing ISAs to non-ISAs always use the net rate of interest.

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