Get into the savings habit in 2010

If 2010 is the year you're going to begin saving, here's how to get started...

A new year is a great time to make a new start. And if your New Year's resolution is to start saving, you might be wondering where to... well, start!

If you've never been very good at saving money in the past, teaching yourself to become more disciplined and stop spending so much can be difficult. So I've come up with some top tips to give you a helping hand.

Set yourself a target

The good news is, it's never too late to start saving. However, it is really important to make sure you do get into the savings habit - after all, what would happen if you suddenly lost your job? How long would you be able to continue paying out for everyday essentials, as well as pay the mortgage or rent?

Here at lovemoney.com, we reccomend that you build up a savings pot of at least three months' salary. However, in the current economic climate, it may be wise to build up a savings cushion that will cover you for as much as six months.

Of course, this probably sounds like a lot of money to put away. So before you start to panic, the best thing to do is to sit down and work out a target so that you've got something to aim towards. Don't aim too high - otherwise, you may never achieve it - but don't aim too low either.

Even if you can only afford to put a small amount aside each month - perhaps just £10 - the savings can soon build up. The easiest way to remember to do this is to set up a direct debit or standing order to transfer funds into your savings account each month.

Finding the cash

If you're concerned you're going to struggle to find some spare cash at the end of the month, it can be really handy to draw up a budget. Adopt this goal to find out how to do this, step-by-step, or sign up for online banking at lovemoney.com to view all your transactions from different accounts at a glance.

Once you've done this, you should be able to identify areas where you can spend a little less than you currently are. Is there anything you can cut back on? What about that morning trip to Starbucks, or that gym membership you rarely use?

It's also worth taking the time to shop around and find cheaper deals for your household bills. For example, you could use our energy comparison tool to find a cheaper electricity and gas tariff. Although switching energy providers might seem like a hassle, it might be more straight-forward than you think - it usually only takes about 10 minutes. Read A step by step guide to switching energy for more information. Similarly, see if you can get a better broadband deal.

And as well as saving money, why not see if you can make a bit of extra cash to put into your savings account? For some handy tips on how to make extra money in your spare time, have a read of Ten easy ways to make money and Make money from your hobby!

Finally, if saving still sounds like a lot of effort, don't despair, because there are plenty of ways to save without realising.

Kick start the habit

As I said earlier, the easiest way to start saving is by setting up a direct debit or standing order each month, so money will transfer directly from your current account into your savings account. That way, you'll always remember to put some money aside.

Regular savings accounts can be really handy for this. Regular savings accounts allow you to put aside anything from £1 to £250 per month. Usually the interest rates on these accounts are pretty competitive and will remain at a fixed rate for the first year. So they can be a great starting point when you're trying to get into the savings habit.

The downside is that if you make any withdrawals in the first year, or you miss a payment, you could lose out on a significant amount of interest. So if you're going to open a regular savings account, you will need to be disciplined. You can find out more about the best accounts in The top 11 regular savings accounts.

If the idea of having no access to your funds concerns you, you could consider an easy access savings account instead. Although the rates of interest won't be quite as high, you'll still be able to set up a standing order from your current account so that you don't forget to save! Of course, while it's better if you leave your funds untouched, if you do find you need to get your hands on your cash, you shouldn't be penalised with one of these accounts.

You can compare easy access savings accounts through our savings centre. 

It's really important that once you've chosen a savings account, you keep an eye on the interest rate. Unfortunately, interest rates on savings accounts change on a regular basis. And there's no point opening up a savings account with a competitive rate of interest, only to find a few months later, you're earning next to nothing on your savings.

If you do find that your chosen savings account is no longer competitive, make sure you move your savings to a better account as soon as possible. It may seem like a hassle, but it will be well worth it. And as with all financial products, make sure you read the terms and conditions carefully before signing up to anything.

Finally, if you want even more help getting into the savings habit, you can register on lovemoney.com and adopt this goal: Build up your savings. Next, watch this video: How to... save when you've got no money. And then, why not have a wander over to Q&A and ask other lovemoney.com members for advice? Good luck!

More: The best savings account you've never heard of | Earn up to 8% on your savings