Right now, there has never been a more important time to save money and think about investing in your future. Whether it’s the fact that we’re quite literally forced to stay inside as much as possible or the uncertainty in the economy, tightening our belts and re-examining our finances has become part of the new normal
If there has been one saving grace of being trapped in the house for four months, it’s that we’re quite literally being forced to save money. Yes, the takeaways do come calling more often now and maybe we’ve bought a Summer wardrobe we’ll only be wearing in the kitchen but in the main, it seems fair to say the lack of Pret sandwiches, after-work wines and monthly sessions have been of some benefit to our bank accounts.
Of course, while saving more money is a luxury for some – for others it’s a necessity. With the impact of Covid-19 on job losses and so much uncertainty in the economy, finding new ways to save and to make the most of those savings is integral to feel some sense of security right now. That’s where companies like The Share Centre are proving a saving grace (pun-intended) by helping you invest your money in ways that better your finances, for any budget.
Because, it's not just saving you need to think about, but what you're going to do with those savings. With interest rates on savings accounts so low and inflation continuing to rise, keeping them in a savings account is not the smartest thing you can be doing with your money right now. In fact, while some may think investing is a risky thing to do with money, for tons of women smart investing to your budget with companies like The Share Centre is proving a safer bet on future finances than just letting your money lose value overtime as it sits in a dusty savings account.
So how do you get your savings up in the first place and get started investing? Well, we spoke to finance writer Laura Whateley about all the ways we should be re-examining our finances and here, she provides her all-important tips to invest in your future...
Reset your spending
When we’re out and in a rush, tapping Apple Pay, grabbing work lunches, ordering rounds at the bar with a contactless card, it can be really hard to keep on top of a budget. Use the slower pace of lockdown, and lack of social pressure, to think about what you actually want to spend your money on, or what you might want to save for now and much further into the future. Delete all those email newsletters offering money off. Take advantage of the explosion of free online courses, YouTube pilates and Zoom Zumba, and set some new rules. A money detox, maybe, when you spend nothing at least two days a week, or ask yourself, could you live on 70 or 80 per cent of your income? If so make it happen and save the rest.
Automate savings
Us humans are weak-willed, and it is challenging to do something - like saving - that involves sacrifice if we have to remind ourselves of it all the time. Create automatic habits so they become second nature. Open several current accounts, separate the one you have for your earnings from the one you use for daily spending and bills, so you can put some friction in place to stop yourself spending. Work out how much you want to save, for the short term, medium term and long term, moving that money into an untouchable savings or investment account as soon as you’re paid. You could also download an app that rounds up spending to the nearest pound, saving the difference, or an app that monitors your current account and helps you work out how much you can afford to save, moving the money without you even noticing.
Switch bills and cancel subscriptions
We’ve all signed up for free trials that we then forget to cancel, or special offers for things we don’t really use or need any more. Use this time to go through and look at all your direct debits. Can you get rid of any? Are any of your direct debits for bills or contracts (such as your phone) you haven’t thought about for at least a year or two? If so, negotiate a new deal, I guarantee it will save you, maybe as much as several hundred pounds over a year.
Save in cash for the short term, but consider investing for your future
When you start to build up savings don’t just stuff them all into a cash account.
You need a generous rainy day cash buffer that you can access in an emergency if, for example you were to lose your job, especially now. But once that’s in place, consider whether you can make your savings work harder by investing them in the stock market, maybe in your pension or in a stocks and shares Isa.
We think of investing money in stocks and shares as risky, but over the long term you will lose money on your cash because of inflation, £100 in ten years time will not buy you as much as £100 does now.
And you don't even need to invest that much, The Share Centre says that as little as £50 a month can prove great returns - when you think about your TV subscription or gym membership, the beauty buys and those clothes we forget to return, £50 a month seems like a much more worthy spend knowing how much you can get back from it.
There’s no guarantee that the market will rise, but over the long term - invest for at least five to ten years - there’s a good chance your money will grow more quickly than if you left it in a bank account paying very little interest.
If you’re interested in getting more out of your savings, checkout The Share Centre here.
Capital at risk and ISA rules apply.
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Women Are Proven To Be Better At Investing Money, So Why Do We Avoid It?
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