Savings Account Decimated by COVID? Here’s how to pick up the pieces.
SEO meta description: Has your savings reduced because of the COVID-19 pandemic? It’s time to get your savings account back on track with our top tips and advice. Save after COVID better with our help.
Savings accounts are essential to overcome financial emergencies. All of your hard work and dedication to saving pays off when you can fall back on your savings account in difficult times. A few of us will have landed on the soft savings account cushion over the last 12 months as the pandemic reduced employment and income.
On average, accumulated personal savings rose during the pandemic because there were fewer places to spend our income. Yet, 20% of UK households claim to have depleted their savings. That’s what most people’s savings are there for, and you should be proud of the safety net you created in the first place. But that doesn’t take away the sour taste in our mouth as we see our savings drastically reduced.
If you’ve seen your savings account deteriorate during the pandemic, it’s time to get it back on track.
Reassess Your Account Choice
Savings accounts are like your energy suppliers. You probably need to change them often to keep getting the best deal. And you might need to think outside of the box to make your money go further.
Most high-street banks don’t offer the best savings account with the highest rates of interest. Many have adapted their rates based on the pandemic, leaving savers with a raw deal. You should consider moving your savings to building societies and finance companies with a higher rate of interest. This typically means a commitment to lock your money away for longer through a bond.
But before you deposit your money into any bond, make sure you will not need that money for the full length of the bond, as taking it out could mean paying a penalty.
Go Back to Basics
We get it. You probably want to save as much money as possible to resuscitate your savings account. But savings should not mean eating soup every day to afford that dream home. Saving should be about dedicating yourself to save without causing you to suffer.
And this means going back to the basic savings rules, especially Elizabeth Warren’s popular 50/20/30 rule. She stated that a sensible way to save and keep living a normal life was to spend 50% of your income on essentials, 30% on treats and desires, and then send 20% of your earnings to a savings account.
Of course, you could switch the final two percentages if you want to save money quicker. We also recommend checking out this massive money-saving tips guide from Wonga to help you flesh out a more robust savings strategy, their collection of 40 money saving tips are sure to highlight a few areas where you can save.
Try a No-Spend Challenge!
Saving money for your own benefit doesn’t usually come with any accountability. It’s your money and you don’t have to answer to anyone but yourself about your savings. This makes it hard because without accountability, your motivation to save is automatically lowered.
But there is one way to combat this. You can make your savings grow by becoming accountable for what you spend with other people. And one way to do this is by taking part in a group no-spend challenge. Set a target with friends or family to not spend unnecessarily for a week, month or longer!
Good luck and stay strong.