Having savings is a luxury for many people. Recent research suggests that one in four UK families has less than £95 in savings. Your level of income is obviously a huge factor, but you’re also up against some significant psychological forces that can make spending far more tempting and gratifying than saving.

People in the UK currently manage to save just 3.3% of their net income and this amount has dropped significantly in recent years. If you don’t save at all, how can you start? Maybe you do but you need to boost your savings pot – how can you get past the obstacles in your way? Is it possible to change your behaviour if you’re “bad with money”?

Some simple steps could help you get started:

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Deal with your debt

To improve your chances of becoming a saver rather than a spender, you need to start by tackling your oldest debts and most expensive debts. If you don’t start clearing these, they can cast a shadow over new saving goals and make you feel defeated before you’ve even started.

As MoneySavingExpert’s Martin Lewis says: “Debts usually cost more than savings earn. Cancel them out and you’re better off.” This is particularly true for expensive debts as they are likely to incur far higher interest than what you might earn from a savings account, for example. The same goes for pulling yourself out of your overdraft to avoid costly fees. Focusing on clearing these debts first will give you a clean slate to start saving for real.

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Identify your financial personality

An important step for many towards saving will be to curb impulse spending, whether it’s that payday treat or a heavily-discounted sale item that’s too bargainous to miss.

To change spending habits like this, you first need to understand your financial personality: are you someone who likes new experiences? Are you a social butterfly and can’t say no to a night out? These traits are often associated with impulse spenders, while a preference for predictability and familiarity is a characteristic often linked to savers.

Monitoring your spending helps you uncover what your spending habits and financial personality really are. Changing your personality might be impossible but monitoring your spending more closely could help you devise coping strategies or ways to manage your impulses by showing you where and when your moments of spending weakness come.

Starling Bank’s Pulse feature updates in real-time so you can easily see what’s going in and out of your bank account. You can also review what you’ve spent in a day or see where your money goes over a longer period grouped by activity (eating out or transport, for example) or by service or merchant.

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Change how you feel about spending

Spending can bring us short-term rewards; saving brings delayed gratification but this can often feel remote or less satisfying. Saving more and spending less requires us to prioritise long-term gain over short-term satisfaction and change or interrupt the feelings we associate with spending.

A good first step is to take action before you spend money and identify things that you need versus things that you want. Make sure you’ve covered those essential items before you take care of the wants – this will make sure you don’t spend all your money on non-essential items and then don’t have enough to cover bills or rent. Using Starling Bank’s features you can review how much you are spending on wants versus needs and whether this is appropriate. For example, some experts recommending a 50/30/20 rule – allocate 50% of your pay cheque to covering needs, 30% to wants and pay 20% into your savings. Try this as a rule of thumb and check how closely your current spending and saving patterns match this ratio. What could be improved?

Keeping track of the money you’ve saved when you don’t spend on impulse or resist some of those wants could help strengthen your resolve and encourage you to continue addressing your bad habits. You can do this simply by making a note of every time you resist temptation or using Starling Bank’s features to transfer what you would have spent towards a savings goal.

With cashless spending or spending on credit, we often remove the immediate pain of spending and the high of instant gratification we get from our purchase only distances this pain further. Starling Bank’s real-time spending notifications and monitoring can help address this. An instant alert on your phone can provide a useful, tangible reminder that you are spending too often or too much or prompt you to confront unnecessary purchases in real-time.

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Set realistic saving goals

To get into the saving habit, you need to be realistic and that starts with setting savings goals. Research in the UK suggests that those with specific savings goals save faster and up to £500 more a year than those who don’t.

Start by naming your goal – “New York trip” or “new laptop”, for example. Starling Bank allows you to add images to your savings goals too as helpful visual motivators and reminders. Saving for a beach holiday? Nothing like a picture of that sun-soaked shore to keep you going.

Realistic timelines for your goals are important too. You might have different saving goals relating to the next year, the next five years or across your lifetime. Saving for a holiday in the summer will require a different goal and timeline to saving for retirement, for example. Think about how much you want to save and how soon you want to hit your target. You need to balance your goal amount with an idea of how long you want to be saving for. Then ask yourself if this is realistic, considering potential bumps along the way that might cause you to dip into your savings pot or that might change the amount you can save.

With Starling’s Goal feature you can set realistic targets to keep you on track. Within the app you can easily transfer money – however much you decide – to different savings pots associated with your goals. You’ll be able to see how much you’ve saved and how close you are to reaching your target to help motivate you.

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How much should I save?

There are lots of different ways to tackle how much you should aim to save on a regular basis. Understanding your financial personality can help you pick the right approach and it’s important to differentiate between whether you are saving for a particular goal with its particular deadline or to build an emergency savings fund.

Think about the saving behaviour that best fits your personality and lifestyle. Is this little and often or larger sums less frequently? Is it a percentage of your pay transferred by standing order?

If you want to start building a saving habit, once you’ve got your weekly essentials covered, you could try saving any money you have left over, no matter how small that amount is. If you want to test out saving different amounts, you could try saving for a year and putting aside £1 in week one, £2 in week two and so forth. This will help show you how even small regular amounts can add up – in this case, you’d have saved £1,378.

Alternatively, you could “pay yourself first”: think about what it might be possible to save at the start of each month or when you get paid, for example, and put that amount into a savings pot – ideally one from which it’s hard to withdraw. This approach can help you think through the month ahead and identify any financial issues that might arise. It also helps to prioritise the idea of saving over spending.

If you consider yourself low on willpower, having a regular transfer to your savings might be the way forward. This set-up removes you from the decision-making process and makes it automated which can help you conserve willpower. Starling Bank’s app allows you to easily set up standing orders to another savings account, for example, if you prefer to keep your savings separate.

The important thing with whatever rules or approach you set for yourself is to keep checking that it is working for you, your goals and your lifestyle and tweak it if you need to. If you’re struggling to save the same amount each month as a percentage of your salary, you may need to drop this or use Starling Bank’s notifications to help you cut your spending; if you are saving too much, you might be missing out on interest earnings and may need to look at paying off debts or longer-term savings options, says the Money Advice Service.

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Saving when you don’t have much money to spare

A common reason for not saving is that you don’t have enough money spare to start with. If you don’t have much to save, think about starting very small and focus on making it regular. This will help you to build a habit even if it’s just a penny a day. Seeing that pot grow can become addictive and help reinforce that behaviour.

It’s important to have a plan in place for how you might deal with unexpected income – whether that’s a windfall or any money you’ve got left once essentials are covered. Can you put this towards some of your savings goals? Thinking about this in advance could help remove the temptation to spend these extra funds. Try to increase the amount you’re saving as and when you can rather than increasing your spending just when you have extra funds.

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