Regular Savings – simple and affordable?
Posted on February 17, 2017
When it comes to savings, the easiest thing to do is to simply open a savings account, deposit your cash and forget about it until you need it. However, to make the most of your money, may not always be the best thing to do. With interest rates so low, most standard instant access savings account won’t give you a very good return on your investment. No matter how much money you have saved, it’s always a good idea to spend a little time looking at your investment options and considering your own needs.
While a long term investment plan will make you the most money, it’s always wise to have some money you can get at quickly in case of an emergency. If your boiler breaks in the middle of winter and you need to quickly find the money to have it replaced, do you have cash you can get at fast without incurring penalties? If your money is tied up in a long term investment, you could well jeopardise any chance of a good return if you take your money out early. That’s why the best idea is to have several pots for your savings. Work out how much money you have in savings, and then consider how much of this you’d like to be able to access quickly. Perhaps you’re thinking you’ll go on holiday or buy a new car in a few months, and of course it’s always reassuring to have money you can get at quickly for any unforeseen circumstances. Once you’ve worked out how much money you need in your fast access pot, the rest of your savings you can safely tie up in a longer term plan.
There are plenty of good long term savings and investments available on the market. In general, the longer length of time you can put your money away for, the better deal you’ll get when it comes to saving. As long as you don’t want the money out before the term finishes, and of course now you have put aside some emergency money elsewhere, this shouldn’t be an issue, you should be able to get a good return. There are products that give you a guaranteed return, so you don’t have to worry about losing money either.
There’s also no reason why you can’t have several products to save money over different lengths of time. Perhaps you have a young child and you’d like to put money away for twenty years for them. You may also be planning a round the world trip in five years time. You can invest your money two different ways that will give you the most benefit and allow you to get access to your money in five years and again in twenty years.
You’ll find products created specifically for medium and for long term investments. Do your research and you’ll be able to find just the right product that will perfectly suit all your needs, but it may well be the case that splitting up your cash into several ‘pots’ is the best choice to get the best return, and allow you to access the money just when you need it.
Making your money work for you takes just a little more time than simply stashing your cash in a standard savings account, but the results are well worth it.
This blog provides generic information and opinions of the writer and should not be relied upon for making investment decisions. No advice has been provided by Sheffield Mutual. If you are in any doubt as to whether a savings or investment plan is suitable for you, you should consider contacting a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting www.unbiased.co.uk or www.vouchedfor.co.uk. Advisers may charge for providing such advice and should confirm any costs beforehand. Any reference to taxation is based on the writer’s understanding of current tax legislation and practice, which could change in the future.