Savings

Investing money & savings accounts

In the current economic market, it is now more important than ever to start to save for the future. As people are living to an older age, the amount of support that the state can provide is getting smaller, so it is up to individuals to take care of themselves. The cost of living is now at an all time high, so saving can seem like a luxury, but it is very important that you try to save as much as possible now in order to protect your future.

There are several ways in which you might be able to find more money to save, try to cut down on luxuries, plan your finances and research into different ways of saving.

What should I save?

As we all know the economic climate is extremely volatile at the moment; every day on the news we are being informed of new redundancies. On top of this, people are living longer and the cost of living has soared. Things may get even worse, so it is important to save as much as you can while you can to weather the storm.

How much should I be saving?

Obviously the amount that you should save will depend on your circumstances; however, the most basic advice we can give is to save as much as you can afford. Many financial advisors advise that you should try to have around three months wages put aside in an easily accessible account to cover you if you lose your job or face another unexpected financial demand.

When you start to plan your savings you should look to the future and try to plan what you will want then. You can then start to work out how much you will need to save now in order to realise this. You should remember that the sooner you start saving for the future, the more you will have when you retire. For a comfortable retirement you should try to save 10-15% of your income.

If you are worried about how disciplined you will be when it comes to saving, you should think about setting up a direct debit straight from your account to your savings so that you become used to living without the extra money from month to month.

Minimising risks and taking advantage of low interest rates

As we all know interest rates are very low at the moment and a great number of people have faced losses on investments that they have made. To try and combat these problems you may want to try some of the following options:

• A great way to save is with an ISA - they are tax free and usually offer higher interest rates then other basic savings accounts
• If you want to invest in stocks, do it on a month-by-month basis as opposed to using one lump sum and relying on a long term increase
• Opt for a low-cost savings scheme which invests small amounts of money into stocks and increase the amount that you save when shares are low
• Spread your money out - don’t place all of your money in one fund - this will help to reduce any risks
• Go for low-risk stock market investments

Click here for independent financial advice on ISAs and savings accounts

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