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How to make the most of your savings

How to make the most of your savings
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Saving for a rainy day can be a difficult task at the best of times and now with the UK facing a crippling economic depression it appears harder than ever. However, it is still worth saving for the future, and here are a few handy hints about how to make the most of your savings.

Get Rid of Your Debt

Before you consider saving, it is important that you eradicate any outstanding debt. There is little point to hoarding away money when you have creditors at your door. Be realistic about how much you can pay back each month and approach your creditors with your offer. There are many charities and web sites that can help you get rid of your debt such as the Money Advice Trust and moneyexpert.com.

What is it For?How to make the most of your savings

A great way to make sure you put money away is to set yourself a goal. Think of an incentive such as a holiday, a new car or even a lump sum for your retirement and use this to keep you going when you get tempted to dip into your savings. It would be wise to have two separate savings accounts so one can be used for future goals and another can be accessed during financial emergencies.

Set Up Regular Payments

To ensure you accrue savings, it is sensible to select a date you will place money into an account each month and stick to it. The simplest way to do this is by setting up a direct debit to this account. Also, if you get a pay-rise or a pension increase, increase the amount of money you transfer to your savings account.

Set up an ISAmake the most of your savings

Did you know that 20p out of every pound earned in interest on savings is taken in taxes? This can be avoided by setting up an Individual Savings Account (ISA) which allows tax-payers to place up to £5760 into an account each year without paying any tax on these savings.

Shop Around

Don’t feel obliged to place your savings with your usual bank due to a sense of loyalty as the loyalty will not be mutual where finances are concerned! Some savings accounts offer temporary rewards, so do feel free to move your money to a more attractive account once this reward has been achieved. It pays to be proactive where savings are concerned, so look online at comparison sites to find which savings accounts will suit your best. Be aware of what access is offered as some accounts restrict how often you can dip into your savings, which is not ideal for those unexpected emergencies.

Other ways to Invest

If you are looking for a way to save for the future you don’t have to just put your money into an account and wait for it to grow. Think about investing in property such as your own home or homes for your children. With a dwindling economy, now is perhaps a favourable time to buy and if you purchase a property besides your own, rent it out to achieve additional income to put towards your savings.

Beating Inflation

One of the bug-bears of many savers is the effect of inflation on savings. The Government has recently released plans to reintroduce Index-Linked National Savings Certificates which promise to increase your investment despite changes in the cost of living. This is a plan for those that are looking for a long-term investment, as the insurance only exists if you do not withdraw your money before the date of the agreed term.

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About Denise Morgan

About Denise Morgan

Denise has five years' experience writing for various web-based companies. During this time she has also contributed to magazine articles and brochures. In addition to writing, Denise is a gigging singer/songwriter and is proud to have featured on the first series of BBC One's The Voice UK, having been selected by the great Sir Tom Jones. Denise is mother to the most talented and ridiculously intelligent two year old that has ever been and ever will be (until she creates another one that is). This kind of hyperbole is restricted only to her progeny and is not a reflection of her usual writing styles... Denise and her son live in Manchester along with their five cats - yes that's right, five.

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