Lloyds Bank says people ‘could save £700’ with simple method | Personal Finance | Finance
Lloyds Bank is encouraging people to use its helpful tool to boost their savings, and it’s available even to non-customers. The banking group, which also includes Halifax and Bank of Scotland, provides a savings calculator that helps users estimate when they might reach their goals and how much they need to save to achieve them.
Discussing why it’s a good idea to use a savings calculator, it explains: “You could be planning a large expense, or just want the peace of mind that you’ve got a financial safety net in place.”
It explains that, regardless of your goal, a savings account calculator can quickly show you how much you need to save each month to reach it and how long it will take to save the amount you want.
It continues: “You could also be considering whether to choose between savings or credit. If you can afford to wait, it often pays off to take your time and save up for the things you want. While credit is convenient, it could be more expensive, especially when you account for interest, fees and other charges.”
The steps are simple. Just visit its website here to find the tool. From there, based on your own circumstances, you enter:
- How much money you have already saved
- Realistically how much you could save every month
- How long you can save for in years and months
For example, we decided to save £50 each month, starting with £100 already saved. To keep it simple, we set a goal of saving over 12 months, or one year.
After we clicked on ‘calculate’, it said: “Based on these details, we estimate that you could have £700 by the time you finish saving.” That’s enough to help save up for a deposit, a summer holiday, or just build up your emergency fund.
In separate advice, it says that if people want to boost their savings, one simple rule could help people to budget and save better. It explains: “Knowing what you can afford to save or invest each month will help you to plan your next payday, and your longer-term financial future. The 50:30:20 rule could help you to get started.”
What’s the 50-30-20 rule?
The 50-30-20 rule, or budget, divides your monthly after-tax income into three clear areas.
- 50% of your income is used for needs. This can cover everything from bills to food shopping.
- 30% is spent on any wants. Think days out with your family, dinner at a restaurant or any holiday plans.
- 20% goes towards savings. This includes things like topping up your emergency savings fund or setting aside money for investments.
The 50-30-20 rule can be easier than detailed budgeting because it only uses three categories. This makes budgeting quicker and less stressful. It also helps you balance your money between needs, wants, and savings. You can read all about the 50-30-20 rule here.
