Top Savings Tips, part 2.

We looked at the first five in my Top Savings Tips a few weeks ago. here are numbers 6 to 10.


  • You have to consider whether you need your savings to produce capital growth in the longer term or an income either immediately or in the near future. You may be able to combine both.


  •  Not all savings are risk free. While money you put in the Bank should be safe, the same might not be true with money invested in the Stock Market, either by buying shares directly yourself or by investing indirectly in Unit Trusts or Investment Trusts. You should think carefully about how much risk you are prepared to take with your money, and only invest in risky areas if you are prepared for a potential loss, especially in the short term.


  •  Remember that some savings accounts offer better interest rates if you agree to tie your money up for a certain length of time. So you may get an extra 0.5% if you don’t touch your savings for a year, or if you agree only to make one withdrawal in the first six months. You should make sure that you can stick to these terms at the beginning since if you try to take your money early you may lose some or all of your interest.


  •  You should try to put money aside regularly for summer holidays and Christmas rather than hoping you will be able to pay for these expensive times of the year out of normal income, or worse still have to borrow to pay for them.


  •  Before you think about medium or longer term savings you should build up an emergency fund that is easily accessible in a high interest bank or building society account. This will help you to take care of any unexpected large purchases without having to borrow and will allow you to keep on top of any budgets you have set up for yourself

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