5 ways to boost your savings forever!

Follow these tips and you could be on your way to a happy financial retirement.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I reckon it’s an exciting prospect that a few small changes in your lifestyle and habits can lead to a life-changing improvement in your savings that will keep on growing.

You could be stuck in a rut of never saving anything for your retirement and wondering how you ever will. But I’m here to tell you that you can, if you think you can, perhaps with these five ways that could help you boost your savings forever.

Set up a standing order

It’s a good idea to go through the mechanics of regular saving by setting up a standing order from your current account to your savings account. Even if it’s just for £1 every month to start with. Think of it as a symbolic act, a declaration of intention, and the beginning of a savings journey that will last a lifetime.

If you are automatically saving £1 each month and keeping that saving habit sacrosanct, the next goal is to steadily increase the amount you save. Read on for some ideas to help you do that.

Live below your means

Nobody ever got rich by spending every penny they earn, so you’ve got to live below your monthly income and channel the left-over money to that standing order. Look for savings you can make in your everyday budget. I won’t bore you with suggestions because you’ll find them yourself – but be sure to do it!

Increase your income

As well as limiting your outgoings, you can increase your income. Maybe by gaining promotion at work, by setting up your own business, or by working extra hours. But if you do that, beware of lifestyle-creep.

It’s no good earning more only to upgrade your lifestyle and spend all the extra. Instead, aim to peg your expenditure and channel the extra money you are earning to that standing order.

Compound

When your savings start piling up, you need to make that money earn its keep and work hard for you. Choose the highest-earning interest rate savings accounts you can find and let the interest stay in the account to earn interest again. If you do that, you’ll be compounding your money, which is key to creating wealth.

The exciting thing about the process of compounding is that it works exponentially over time – the returns you earn on your savings accelerate and grow ever larger.

Invest

When you have enough in your cash savings accounts to make it worthwhile – say around £1,000 – I’d switch to investing in shares and share-backed investments on the stock market. Over time, shares have outperformed all other major classes of asset, such as property, cash, and bonds.

Indeed, the returns you’ll make from rising share prices and dividends will likely be larger than anything you can earn in a cash savings account. And in that way, over the long haul, shares could help you compound your way to a happy financial retirement.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Kevin Godbold has no position in any share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Retirement Articles

A senior man and his wife holding hands walking up a hill on a footpath looking away from the camera at the view. The fishing village of Polperro is behind them.
Investing Articles

2 UK shares that could help set up a SIPP for decades!

Our writer explains the long-term appeal he sees in one British share he already owns in his SIPP -- and…

Read more »

Bearded man writing on notepad in front of computer
Investing Articles

Here’s how I’m aiming to become a Stocks and Shares ISA millionaire!

I'm confident that a regular investment in FTSE 100 and FTSE 250 shares could supercharge the size of my Stocks…

Read more »

Investing Articles

3 top tactics that ISA millionaires use to strike it rich!

Ever wondered how ISA millionaires manage to make such enormous wealth? Here, Royston Wild divulges some of their greatest strategies.

Read more »

Investing Articles

Can a Stocks and Shares ISA help me retire early?

This Fool is confident that using his Stocks and Shares ISA will allow him to give up work early. Here…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

Cash vs Stocks and Shares ISAs: here’s where I’m investing in 2024!

Cash and Stocks and Shares ISAs are both excellent products for the modern saver and investor. But which is the…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

Here’s how I try to find brilliant shares for my SIPP

Christopher Ruane shares the approach he takes when hunting for shares to buy and hold in his SIPP as he…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

3 FTSE 100 and FTSE 250 stocks I’d buy to target a £31,188 passive income!

Royston Wild explains how a regular monthly investment in FTSE 350 stocks could be the key to long-term wealth creation.

Read more »

Investing Articles

How I’d try to turn a small ISA into £1,000,000 with this savings trick!

Regular investment in a tax-efficient Stocks and Shares ISA could be an effective way to build long-term wealth. It could…

Read more »