A Savings Plan That Works

By Angela Monroe - January 6, 2020

Making a savings plan is a great first step to getting on track financially and ensuring that you have money set aside for when you need it most. Yet it’s not always easy to stick to a savings plan and many people repeatedly fail to make their work. So how can you plan your strategy with savings, and have it work for you?

Getting loans with bad credit is just one of the instances in which having savings could really help you. By sticking to a savings plan that works and being able to show lender evidence of a substantial deposit or down payment, you could increase your chances for potential borrowing.

Creating a savings plan

It’s important to be realistic. There’s no point in creating a plan that you simply won’t be able to stick to so make sure you think about your individual circumstances and what you can afford to save without stretching yourself too thin financially.

If you’re looking to get loans with bad credit, you may not have a huge income with which to start saving. Don’t panic – there are little things you can do each month to put a tiny bit aside for your savings, it all adds up.

Top tips for a saving plan that works  

Imagine you’re paying yourself.

Your savings needs to come as a fixed item in your budget or spending plan. You shouldn’t just see savings as the money left over at the end of the month once everything else has been paid – instead, you should actively set aside your savings in a set payment each month.

If you need to physically separate this money into a different bank account, go for it. This can actually help you to better track your savings and you could search for an account with a higher rate of interest to help your savings along.

Make your savings automatic.

Transferring the money that you’re going to set aside for your savings manually leaves too many potential gaps open. You may be tempted not to transfer it one month if you’ve had lots of expenses, or you might just forget. Set up an automatic payment into your savings account each month to ensure nothing can go wrong.

Budget day to day.

Many people think budgeting is boring but it doesn’t have to be. In fact, it can quickly and easily become part of your day to day life until you barely even notice you’re doing it.

You need to be strict and honest with yourself – record everything that comes into your bank account each month, and then scrutinise your spending and analyse what’s being spent and where. You’re likely to quickly see patterns showing you where you’re spending too much and where your lower expenses are.

Set aside types of income.

If you get a bonus or have enjoyed a tax refund, set this aside for savings. Don’t be tempted to spend it on a larger purchase – setting it aside for the future is really going to help you when it comes to getting loans with bad credit. Similarly, if you have a part-time job at the weekend ensure that this money goes directly to your savings, or perhaps you’ve recently made some extra cash which you can set aside immediately.

Switch things up.

There could be lots of reasons why you haven’t been able to save money previously. Look at things like your utility bills, or your mobile phone contracts. Are there ways in which you can make savings here? It can feel a bit tedious going through everything but it’s really worth it in the long term and could help you get loans with bad credit.

Suppliers are often pretty receptive to you asking to switch to better contracts or you can search for better deals yourself online. Calculate the amount of money that you save and put it straight into your savings each month.

Cut down on luxuries.

OK, it’s not fun but it’s essential. There are so many luxuries that people spend out on day to day without really thinking about it. $3 on a coffee, that’s at least $15 a week and sometimes more – adding up to $60 a month, you can start to see how much you could be putting in savings for items that you don’t really think would make a difference.

Make a list of your savings and mark out which ones you see as essential and which are more luxurious. If you pay for things such as gym membership and don’t want to give it up, maybe you can switch to a cheaper deal or find a less expensive gym.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.

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