Building a nest egg, saving for a rainy day and having a contingency fund are phrases we’re all familiar with. But how many of us could say that we are a good saver?
It sounds so simple, tucking a few pounds away each month. Others throw change in a glass jar. Some still probably stash cash under the mattress!
All well and good, but that money isn’t appreciating. It gets lost, and it’s far too easy to access when something tempting crops up. Still, surely we shouldn’t criticise people who are making an effort?
Getting into the saving habit
A recent survey by PiggyBank has highlighted that for many people savings are not top of the agenda. In fact, one in ten actually admit they are bad with money.
Like time, we just don’t seem to have enough cash to consider saving. Well, that’s what we tell ourselves.
In reality, it’s how we manage our money that matters. So many variables change, and that means we must always be on the lookout for the best deals. We do that with holidays, cars and the weekly shop, so why not savings?
Make a few lifestyle savings
In another survey, by the British Coffee Association (BCA), in the United Kingdom we now drink around 95 million cups of coffee each day.
All very interesting, but what’s that got to do with money?
It’s about the cost. Many of those coffees are enjoyed in a café or restaurant. Twenty years ago having a “bought” coffee was a treat to most people. It was part of the Saturday trip into town, doing some shopping, meeting a few friends, then sitting down for coffee and cake.
These days it’s almost the norm. A £2.75 take-away cup is part of the morning walk to work, college or even school for some.
There’s nothing wrong with enjoying a coffee, or any other quick purchases while you’re out and about. But many of our purchases have become habits, and that loose change doesn’t seem to have much value.
Just think how much you could save it you cut down a few cups each week.
Best ways to be a saver
Nobody is trying to be boring, but it makes sense to save. Money really does matter – to our day-to-day expenditure, weekly and monthly budgets, and for our longer-term financial future.
Whether it’s for you, your partner, children or just as a nest egg for later life, utilising the tax-free benefits that come with ISAs (Individual Savings Accounts) is a good option.
For most of us it’s how to make the best start. Here are a few ISA ideas, simple ways to save regularly depending what you’d like to save towards:
Cash ISAs – also stocks & shares ISAs. These are ideal for savers and investors who prefer cash or are willing to take a little risk. You can follow the financial markets, and in some cases you can select the type of investment funds that fit your profile. Investment limits for both cash and stocks & shares ISAs are £20,000 for the current tax year.
Junior ISAs for children – a great way to save towards your child or grandchild’s future. A medium-to-long-term investment, you can save up to £4,260 each year. The fund converts to an adult ISA when the child you are saving for turns eighteen.
Help to Buy ISAs – these are aimed at people who are saving for their first home. That could be you, or if you’re already settled you might want to kick-start your children’s house fund. Over several years, if you save over £12,000, you could receive a £3000 bonus from the government when a property is purchased.
Lifetime ISAs – perfect for those saving to buy their first home, or if you wish to save until age 60 and use the investment towards retirement planning. There’s an attractive 25% government bonus on your savings (up to £1,000 per year), but there can be penalties if you choose to withdraw funds early.
For any ISA, you should ensure that you fully understand the investment limits, tax allowance implications and any penalties should you need to access funds in an emergency. It’s always in the small print.
Get independent help for savers
Do your research, budget and regularly review what you spend and you should have some spare cash to keep topping up those ISA savings. However, as we all know, it’s not always that straightforward.
Bank accounts offer different benefits, interest rates change, tax allowances are increased and decreased, new ISAs offer different opportunities. Juggling your money and making sense of it all can be confusing.
And remember, you should always be aware that investments can go up or down.
That’s why Logic Wealth Planning is here to cut through the jargon and offer independent financial advice. We listen, chat and then offer workable saver solutions.
We don’t stop there, and your circumstances will probably change. That’s why we build up a picture, get to know our clients and help to plan ahead. It’s an ongoing journey.
If you’d like to talk about money, savings, ISAs and planning your financial future, give us a call or send us an email. We’ll take it from there.
Call 0808 1234 321 or email@example.com