6 Valuable Tips To Set Up And Grow Your Savings
We are currently in the midst of a cost-of-living crisis, and prices are rising on essential items. Putting money away in a savings pot may not be at the top of your list, but it could be a lifesaver down the road.
Below are 6 valuable tips to set up and help grow your savings.
Lendwise is the UK’s only peer-to-peer platform that is dedicated to education finance. As an Investor on Lendwise, you can back ambitious individuals studying for MBA and Masters programmes by financing their education at Universities and Business Schools across the UK and beyond.
By investing in a Lendwise IFISA, you could earn up to 9% p.a.* tax-free interest on your investments. By investing in a Lendwise classic account, you could earn up to 9% p.a.* interest on your investments.
*Capital at risk. No FSCS protection. Terms and Conditions apply.
1. Work Out Your Goals
Before saving money, you should first figure out what you’re saving for. Are you saving for a holiday, a housing deposit, university or your retirement? Whatever goals you have in mind, it’s important to keep a note and have a rough idea of how much money you’ll need for each.
Knowing the reason for each saving pot and how much it requires can be helpful when deciding which pot is most beneficial to you. For example, a holiday is a short-term saving while a housing deposit is a longer investment – as such, a Lifetime ISA could be beneficial. You should also regularly review these goals as things can rapidly change in an instant.
2. Set Up A Backup Savings Account
It’s vital to set aside some money for an unexpected emergency, especially in today’s economic climate. It means you have money to hand for anything; a surprise bill or a drop in income. It can save you from falling into the vicious cycle of credit debt.
Aim to have a few months’ worths of your usual income set aside, but you should make it a habit to deposit regularly.
3. Find An Account Paying Interest
With the current inflation soaring and predictions of further increases, this means saving rates on most accounts are awful. However, it’s worth finding the accounts with the best interest rates. Even small interest is better than no interest.
4. Use An App
A quick and effective method to keep track of your spending is through handy apps. Another method to save money by tracking your spending is to round up to the nearest pound, or another figure. For example, if you purchase a sandwich for £1.50, round the price to the nearest pound and 50p will be sent to your savings.
5. Use Your ISA Allowance
The ISA allowance is reset every tax year on the 5th of April. You can invest as much as you want within the allowance. However, the allowance is set for the tax year, any remaining will not roll into the next year. You can only invest in one of each type of ISAs every tax year, but you may hold more of the same types of ISAs. Learn more from our previous blog post.
6. Don’t Put All Your Investments Eggs Into The Same Basket
Don’t concentrate all your efforts and resources on the same area or you may risk losing everything. The general rule of thumb is the higher the risk, the higher rewards – but you need to ask yourself if it’s worth it.
Investing your money is seen as a long-term investment and one of the best ways to earn higher rates of interest. There are many different routes you can take, and it’s advised to take as many as possible to reduce losses. However, taking many different routes can also amount to little gains and higher losses.
With a regular IFISA at Lendwise, you can use the AutoLend feature to diversify your investment pool and earn up to 9% p.a.* take-free interest.
*Capital at risk. No FSCS protection. Terms and Conditions apply.
*This blog is not intended to be financial advice from Lendwise Ltd. Lendwise Ltd, trading as Lendwise, does not provide investment or tax advice, and information on this website should not be construed as such. You should consider seeking independent tax and financial advice before making a peer-to-peer loan.
As with all peer-to-peer loans, our products place capital at risk. You may not get back the full amount you lend and/ or the interest you expect.
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