Martin Lewis advises on saving money on energy bills
Saving money is important because it helps protect you in the event of a financial emergency. Whether it’s losing your job, or being forced to fork out on essential repairs for your car or home, it’s always good to have some extra cash in the bank. Additionally, saving money can help you avoid debt, reduce financial stress and provide you with a greater sense of financial freedom. In truth, there are countless reasons to start saving your money, and they’re all as good as each other – so here’s ten ways you can start doing this.
Assess your cash holdings
While there can be a great sense of comfort felt from holding cash, the reality is due to historically low interest rates, it’s likely not in your finances’ best interest.
With the rate of inflation significantly higher than rates being offered in most cash ISAs, your cash is effectively shrinking.
Carlisle-based Racheal Bell Wealth Management advises people to explore their investment options and think about switching to a different ISA, such as a stocks and shares account, to fit their long-term goals.
Check your pension
When it comes to pensions and retirements funds, there’s a lot to think about.
Hiring a good financial planner will ensure your future is as well planned out as it possibly can be.
If you’d rather have a go at it alone, consider contributing more to your pension fund, checking its value and naming beneficiaries in the case you die before you can claim.
We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
Make the most of your ISA
ISAs provide a simple, tax-efficient solution to invest for the future. The yearly allowance of £20,000 for the Tax Year 2020/2021 remains an important and valuable investment opportunity.
The Rachael Bell team writes: “Some investors may be anxious about investing a lump sum and fearful they will get their timing wrong, particularly during a period of market volatility.
“However, even professional investors cannot consistently and successfully time the markets, so taking a long-term view is of paramount importance. Consider making the most of this year’s ISA allowance, which refreshes at the beginning of April.”
Take advantage of your gifting allowance
One of the easiest ways to reduce a future inheritance tax bill is to give away some of your wealth during your lifetime. You’re allowed to give away as much as £3,000 per tax year without having to pay Inheritance Tax on it.
You can also make use of any unspent allowance from the previous tax year, so a couple could potentially remove £12,000 from a joint estate before the tax year renews on April 5. The last year’s allowance will be lost after that date.
Think about your children’s investments
One of the ways of ensuring your children have the best start in life is to manage their savings for them until they reach adulthood.
Take time in 2021 to think about what’s best for your children and if your current accounts are providing you with the best returns.
One route to consider might be a junior stocks and shares ISA, providing your children are at an age that you can undertake the minimum five-year review.
Sign up for cashback sites
There’s a lot of money to be made from signing up to cashback sites and using them with day-to-day purchases. You can very quickly build up a savings fund to put towards one special purchase, a holiday, or consider investing.
The most popular cashback websites are free to join and your accrued savings could soon be into the three figures.
Will HMRC text me about a tax refund? [INSIGHT]
Pound euro exchange rate climbs above ‘crucial mark’ [EXPLAINED]
Sky Q viewers could see their bills rise next month due to Disney [REPORT]
Be mindful of your financial wellbeing
The uncertainty and stress surrounding the Covid pandemic has leaked through into people’s finances.
This is understandable, given the huge uncertainty surrounding everything right now.
But while you can’t control the pandemic, you can control your own budget and planning, so make a warts-and-all list of your outgoings and set it against your income. This will give you a clear picture from which you can plan the rest of your year.
Consult with a financial advisor
Making your money work for you is incredibly important and you shouldn’t be afraid to pick up the phone and make the first call. You should always get financial help when you can, as these are experts who know how to maximise your financial potential.
Use any reputable wealth management firm or consultant if it means you are taking positive steps to manage your money.
Start saving for next Christmas now
Many will likely be reeling from the astronomical cost of Christmas as the credit card bills start coming through the door.
But it doesn’t have to be like that, and with just a little bit of organisation and financial planning, Christmases will be stress-free forever.
Save what you can afford every month in a Christmas savings pot. If your budget is already a bit stretched, consider cutting down on some luxuries and putting the equivalent away.
Manage your debts
While saving is very important, it’s equally essential that if you do have debt, it’s well managed.
Always make payments in full and on time for any credit cards or loans you have and keep a constant eye on the APR you’re paying on the interest.
The Rachael Bell team says: “Money is cheap to borrow at the moment and it may be worth consolidating your debt into one figure at a competitive APR – or in case of credit cards transferring the balance to a zero percent rate for fixed time.”
Source: Read Full Article