If you’re anything like me, Christmas can be a time of over-indulgence. The food, the socialising, the gifts… and things quickly start to add up before we notice.

Which is why I’m one of those people who ring in the New Year with a raft of New Year’s resolutions.

While my resolutions are typically related to diet, exercise and well-being (and tend to be long-forgotten by the end of January), this year I encourage you to make 2024 the year that you develop a robust savings habit.

Understanding the essence of saving

Overspending at Christmas is a familiar scenario for many. When the tree comes down and the decorations are packed away, we can easily find ourselves regretting the holiday splurge.

Did we need those extra presents? Maybe we could have done without the unexpected spending that we hadn’t budgeted for.

I’m sure we all start January resolving not to repeat the same mistake next year! But a better resolution is to put a good savings plan in place, which will help with two critical things:

• We can feel more prepared if unexpected things happen in life.

• We can aim to support more of our life goals, such as weddings and paying off the mortgage.

In this way, we can rethink how we view savings. Creating a healthy savings habit is more than a cushion for our day-to-day lives.

It’s a key step towards financial security and independence for many, and helps us cope with the unexpected: you can’t predict when your boiler will break down, or when your car will fail its MOT.

But having savings set aside will always soften the blow of these nasty surprises.

So where do you start? Saving even a modest amount on a regular basis will soon mount up, laying a great foundation for future stability.

Maybe you didn’t manage to achieve all you wanted to in 2023 – you didn’t pay off as much of your mortgage as you’d hoped, or you didn’t get that new car you’d had your eye on. A savings habit can even help here.

Every penny saved strengthens your financial health, and developing healthy habits can also be really rewarding as you see the interest build up. So, start small, stay committed, and watch your savings grow.

Practical steps to START saving

We’ve made them easy to remember too, to help make saving a breeze!

1. SCOPE your spending.

There are lots of things we can’t avoid spending money on each month. But you need to know exactly how much is going where – on rent or mortgage; on your gas, electric and water; on your TV and broadband; and on getting about, whether fuel for your vehicle or bus and train fares.

Be honest and accurate – and you’ll know how much you can comfortably put aside for savings.

2. TAILOR your account to suit you.

A separate account for savings is vital. It will let you see how your savings are doing and give you better interest rates.

Think about your savings goals, for example how much you want to save and how long you want to be saving for.

Once you’ve set your budget, use this info to tailor your choice of account – and give you a better chance to succeed.

3. AIM for realistic goals.

Make sure you know the cost of what you’re saving for – whether a holiday, an emergency fund or that long-needed garden makeover.

Smaller goals and rewards are less overwhelming and obviously easier to achieve.

Keep it real and you won’t be disappointed. Instead you’ll want to celebrate when you hit that target!

4. REVIEW your deposits.

We all know that life doesn’t always go to plan. Things may change one month so you need to be flexible.

Take time to review your finances and adapt how much you’re depositing into savings if needed – to cope with any unexpected expenses or to take advantage of extra income.

5. TRACK your progress regularly.

Keep an eye on how your savings are doing. Check them on a quarterly basis – and also track any changes in interest rates to make sure your arrangements are still the best for you.

Encouraging young savers

While many of us may be feeling the pinch in January, it might be that the younger family members are more flush, having received cash from Granny and Aunt Kate.

Encouraging them to save some of this money can teach them valuable money lessons early on, and making ‘saving’ a family hobby might result in a healthy habit for everyone involved.

Better still, it’s a practical way to demonstrate the importance of saving, setting them on a path to financial responsibility.

If you have any questions about building your healthy savings habit or any recommendations for our next column, please email us at askjess@saffronbs.co.uk.