It’s easy sometimes to forget the seasons we should be saving, and the benefits of doing so. so I’ve put together ten tip tips to help you. Here’s 1 to 5. The rest will follow next week.
- Saving is not difficult. It’s all about planning and keeping some of the money you have today to use at some point in the future, whether it’s next week, next month or in twenty years time. If you don’t save it’s generally because you don’t plan to save. It doesn’t happen automatically, you have to make it happen.
- Break down your savings into three areas – and this is the really easy bit. Short term, medium term and long term. Short term should cover day to day needs, medium term can help with things like a deposit for a new car or house and long term is essentially retirement planning.
- Try to move some money every month from your everyday current account to a savings account. Apart from the fact that this will give you a bit of a cushion and some peace of mind that you have a bit of an emergency fund, you will also find that the rate of interest paid on a savings account will be higher than that paid on your current account.
- Think about the tax position of any interest you make from your savings. Remember that interest on building society and bank accounts may be taxed at your highest rate so if you have unused ISA allowances it may be worth using them.
- Pensions are very tax efficient for your longer term savings. You could be eligible for tax relief at your highest rate of tax, the fund itself is able to grow in a tax free environment, and under current legislation you are able to take up to 25% of the fund as a tax free lump sum at retirement.