WHETHER IT’S THE back-to-school season, the run-up to Christmas, or getting ready for summer holidays, we’re always at least thinking about saving for something.

Making sure that there’s money in the bank for one-off spending and rainy days is part of being financially responsible, but that doesn’t mean it’s easy. If you struggle to save, don’t worry. You are by no means alone. 

Many of us need a little help getting on the path to reaching our savings goals. AIB has a wide range of tips that can help anyone start to save and work towards a plan to help them finance their dreams.

What are the five steps to saving?

AIB’s top 5 savings tips are:

• Set clear savings goals
• Create a budget
• Choose the right savings account
• Pay Day = Save Day
• Review your goals regularly

We will go into more detail about these savings tips in a moment.

Is it better to keep your savings in cash?

There are many advantages to using a savings account rather than keeping it in cash.

• Keeping money in a savings account discourages impulse spending.
• Putting money in a savings account allows you to earn interest.
• It’s safer than keeping cash at home, which leaves you at risk of misplacing it, having it stolen, or damage from fire or a leak.

Keeping small amounts of cash for emergencies is a good idea, but don’t rely on it for savings.

Are there different ways of saving and what are they?

It all depends on where you are in your savings journey:

• If you are just starting off, you will save regularly from your earnings.  These are typically done through an easily accessible savings account – for short-term goals such as going on holiday or building up an Emergency Fund.
• If you have savings built up, you can look more to putting this away on term and earning higher interest. Fixed term deposits are used for lump sums where access is not required in the short-term eg. 6-month, 12-month to two years.
• If you have been saving regularly and have reached your short-term goals, there are also longer-term regular investment savings options, which are particularly useful for Retirement Planning or Children Education funds.

Is it better to save at the start or end of month?

The main point is to save regularly. We would recommend setting up a regular savings payment directly to your savings account as soon as your income comes in, before any other bills or payments go out. That may be weekly, fortnightly or monthly, depending on how you are paid. By doing this, you develop that consistent savings habit.

What percentage should you save?

Everyone’s circumstances are different, so if you are in a position of being able to save regularly, then a rough rule of thumb is to try to save 20% of your net income. The recommended breakdown of your income is: 

• 50% towards essentials, such as rent and debt payments
• 30% towards your wants and lifestyle 
• 20% towards saving

Do you need a savings goal?

Having a savings goal will help you to stay motivated. Whether your goal is for a rainy-day fund to cover 3-6 months’ expenses, a new phone, or a holiday, having a target creates a connection to the goal. You will be unlikely to dip into your savings for discretionary spending if you have committed to that goal. 

Any tricks or hacks for saving?

• Set clear savings goals – be clear and realistic about your goals
• Create a budget – list all your outgoings and compare them to what you earn. Then check what you have left at the end of each month, leave some money for the fun stuff, and then set aside the rest for you to save. 
• Choose the right savings account – have the right account for your goals. Naming your account to match your savings goal will help you stay on track.
• Payday means save day – this is a really important point to help you achieve your savings goal 
• Review your goals regularly – celebrate milestones when goals are achieved. But don’t let the savings habit stop – set new, clear savings goals and start again.

Are there different times in your life where you should be saving more?

Everyone should save a portion of their income, but the reason for saving changes over time. From a first car, to a first home, to retirement planning – your goals may differ, but the habit remains the same.

Start your savings journey – drop into your local AIB branch or visit AIB.ie to learn more.

Allied Irish Banks, p.l.c. is regulated by the Central Bank of Ireland.