July 23rd 2024.
It's no secret that money can bring happiness, even in small amounts. And now, there's official proof that saving money is not only good for your bank account, but also for your health. A recent study by Bristol University revealed that putting money aside in your savings account can not only increase your wealth, but also improve your sleep and overall mental well-being.
According to the report by academics Jamie Evans and Sara Davies, even saving a few pounds a week can make a positive difference. And this isn't just limited to those with higher incomes. The study found that people on lower incomes also reported similar benefits.
Behavioural science expert Neil Bage explains that saving money can help reduce the stress and anxiety that comes with financial worries. "The act of saving triggers a range of psychological and physiological benefits," Neil says. As the founder of Shaping Wealth, a business that helps financial professionals improve their clients' well-being, Neil has seen first-hand the positive effects of saving money.
"Money is an emotional lightning rod and can trigger a lot of negative emotions," he says. "But when people start saving, even small amounts, it can help mitigate these effects. And as saving becomes a habit, stress levels around money decrease, leading to a greater sense of well-being and optimism."
It's never too late to start, and even small amounts can make a big impact. In fact, more than a quarter of adults have less than £100 saved, but the study shows that even making a small effort to save can improve your mood and financial resilience. The study also found that people on low incomes and of working age are the most likely to benefit from saving small amounts.
"The key is to create and maintain good money habits," Neil says. "And starting small increases the likelihood of sticking to it." So don't be discouraged if you haven't saved much in the past. Every little bit counts.
Not only does saving money have short-term benefits, but it can also provide a safety net for unexpected costs in the future. Just as wearing a helmet while riding a bike can protect you from bumps in the road, having savings can protect you from financial bumps in the road of life. Jeff Miller, vice-president at financial education group Nudge, likens saving money to wearing a helmet. "It's peace of mind for when unexpected costs arise," he says. "And let's face it, there will always be financial bumps in life."
If you're looking for ways to boost your savings, here are ten tips to get you started:
1. Pick a regular saver account. Many banks offer better interest rates for those who put money away every month. Some accounts are only available to current account holders, but it's easy to switch and you may even receive a cash bonus.
2. Automate your savings. Use technology to your advantage by setting up automatic transfers from your current account to your savings account. Apps like Chip and Plum can help calculate how much you can afford to save.
3. Take advantage of government help. If you're on a low income or saving for your first home, you may be eligible for government funds to boost your savings. Check out options like the Help to Save account and the Lifetime Isa.
4. Use tools provided by your bank. Many banks have helpful tools to make saving easier. From dividing your money into different pots for specific goals to rounding up payments and putting the extra into savings, these tools can make a big difference.
5. Save your cashback. Cashback sites like KidStart allow you to save money for your child's future while shopping online.
6. Consider a prize draw account. Some banks offer prize draw accounts, where you have a chance to win money every month just by having a savings account.
7. Try a savings challenge. Social media has popularized savings challenges, like the Envelope Challenge, where you put away a different amount of money every day for 100 days.
8. Take advantage of fixed rates. If you already have savings, consider locking in a fixed rate before interest rates potentially decrease.
9. Declutter for savings. Sell items you no longer need and put the money into savings. Websites like eBay and Vinted make it easy to do so.
10. Don't forget to budget for fun. Include some "fun money" in your budget each month so you don't feel deprived and end up overspending. This can be done by creating budgeting pots or setting aside cash in a separate account. Remember, it's important to have a healthy balance between saving and enjoying your money.
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