Review Your Finances
Please note this blog post was published over 12 months ago and so may not include the most up-to-date information, for example where regulation around investing has changed.
At the start of a New Year it is tradition to make a resolution and to try to stick to it. Most of us choose to follow a healthier diet or start the gym, but given the current economic climate, it may be more appropriate to review our finances and create some form of a savings plan.
Initially this can seem like an arduous task, however, it doesn’t need to be. Planning is key and a little refresh on your financial knowledge can also go a long way. In fact, to help clients in this area, we have partnered with the Open University to offer threefree courses to help you with your personal finance planning.
You needn’t be savvy when it comes to finances in order to review them and begin to have some control over your money. If you follow our steps below, you could still find yourself in a much better state financially than if you were to leave your finances unrevised.
The first thing to do is assess your income and outgoings every month and see where you could cut back. You may be surprised to find what you spend your money on.
If you are invested in Stocks & Shares, either through an ISA or a Personal Pension, make sure you’re invested in a risk profile that you feel most comfortable in and that you could get the best returns from.
It can be helpful to see if your current provider(s) offer a way for you to top up your account during the month without the use of direct debit. For example, clients of True Potential Investor are given access to our award-winning top-up tech, impulseSave which allows them to top up their investment from as little as £1 on-the-go, 24/7.
Make sure that any savings accounts or investment accounts you are currently in are giving you the best rates. There are numerous comparison sites on the internet that can show you the best deals. Take the time to compare different rates and companies that could potentially offer you more.
Think Outside The Box
Many of us choose to open a savings account with a bank we know or an investment account with a company simply because we trust their name. However, this ‘safe’ practice could lead to lower returns than you’d hope for.
Open a Stocks & Shares ISA. Cash interest rates are at an all-time low of 0.25% meaning that most cash savings accounts won’t give you much of a return on your money. As Stocks & Shares ISAs aren’t affected by this rate, you could find that you end up with a better return when it comes to the end of your investment term.
Look to the Future
Although for some of us retirement may seem like a long time off, starting a Personal Pension as early as possible could be of great benefit. The earlier you start to build your pension pot, the more money you’ll end up with.
The amount you put away each month needn’t be much to begin with when you’re young, but every little helps. And by following this path at an early stage means you needn’t put a great amount away each month as you grow older if you don’t wish too. Though the more you put away at any stage of your working life, the more you will have come retirement to be able to live the life you dream of.