Advice For When You Need To Save Money
Once you start getting into the habit of saving you will quickly find the money will stack up and keep on growing.
Saving is a habit and as most will know habits can be broken. To beat this one of the best things you can do is setup your savings system so its automatic. By doing this, you won’t need to remember to save the money.
Very quickly you will have a nice sum of money tucked away for a rainy day. You could take advantage of one of the government-backed scheme called a Cash ISA.
All you need to do is set up a standing order from your bank to your ISA account.
The government says that saving is when you put money to one side without any risk and usually can earn interest. Investing is when you put money in, to get more money out. Investing differs from saving as it has a higher level of risk and there is a possibility you might lose money.
With investing you can make payments starting from £25 into investable markets for example such, bonds, shares and trust funds. Investing is usually long term with the money tied up for a set period to see financial return making investing is only suited if you have enough cash to keep you going for 6-12 months.
As you pay more money in, the amount you save will keep growing and growing. Every time you pay you will get a little bit more interest, which you will also earn interest on. This is called interest-on-interest or compound interest. Over an extended period, it can make a big difference to amount you save.
Best Day is Pay Day
The best time of the month to save money is the day after payday. By setting up your standing order then you have less chance of spending the money you plan to save.
Some employers will have a savings scheme. If you can join one of these then saving money can be even easier. The amount you want to save will be taken out of your wages and straight into the saving scheme, so you won’t even noticed its gone. All the while building up a good size of money.
What Can You Afford To Save?
You might not have money left over every month, but that won’t stop you saving. It hard to control the money coming in but you have total control of the month going out. All it needs is some careful planning.