We all have savings goals whether it’s putting money aside for a wedding, a holiday or as children just saving for that new toy or “must have” item. However, with the economy placing a squeeze on most of our finances, it can be hard to achieve your goal – so how can you make your money go further?
In your best interest
One of the first steps to securing your money is to set up a savings account. Many people leave their money to languish in a current account with a low rate of interest. However, while this can be good to get at your money when you need it, if you’re really determined to save then you should consider a savings account as they generally offer higher rates of interest.
For short-term savings look towards easy access accounts as these will provide access to your cash any time you want it – making them ideal if your savings goal is less than 12months away. The interest rates aren’t as high as you’ll find elsewhere, but they are well-suited to those who don’t have a lot to put aside.
If you’re planning to save for a year or more then you may want to lock your money away into a fixed rate bond. These accounts offer a higher rate of return but they won’t allow you to withdraw your money during the fixed term – typically six months, 12 months or 18 months. Make sure you get the timing right on when you plan to withdraw your money because there will be penalties if you withdraw earlier. For once in a lifetime savings – perhaps for a wedding, for example – then there are longer term fixed rate bonds that offer some impressive returns.
Anyone looking to save for retirement should look at pension schemes as they benefit from valuable tax relief. If your employer offers a scheme which makes contributions on your behalf then consider joining as soon as possible; otherwise think about taking out a stakeholder pension.
Where to get the money you need
Of course the best savings schemes in the world are pointless if you don’t have money to put into them. So how can you ensure you save some money each month?
The obvious step is to boost your income – perhaps by taking on extra work or selling unwanted items. However where that is not possible, look for ways to cut back on your existing expenditure. It’s well worth taking a look at a bank statement over the course of the month to see where your money goes and if there are ways that you can cut back – simply removing a gym membership or magazine subscription you no longer use, could really help. Evaluate your financial products too, and consider switching to more affordable services for insurance, broadband, mobile phones, utilities and more.
Also look for ways to save on your outgoings. One of the most obvious steps is to switch over to online shopping and to take advantage of voucher codes to save on the items you planned to buy anyway.
Photo by Michael Longmire on Unsplash