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The rising costs of living, education and retirement have all been recognised in recent months, especially now that the financial sector is at an all time low. Jobs are hard to come by and certain items, activities and schools just won’t pay for themselves.
With this in mind, it’s important to start saving now. It’s wise to be prepared for whatever life may throw at you and if you suddenly lose your job, you’ll need a back up at hand. Everyday Loans such as short term loans can help in an emergency but it is best to have savings in place to cover you in an emergency. Always only borrow what you know you can afford to repay.
Savings are not only useful for the times you desperately need money; those that have big plans for the future, such as a stint at a top university or retirement in a warmer climate, will do well to begin saving for these activities now.
Whether you plan to enroll on a higher education course or you wish to spend your later years traveling the ocean to a variety of different destinations, all of this requires funding. Student loans can often mean hefty repayments later in life and quite simply relying on a pension alone won’t get you very far.
If you choose to be wasteful with your money earlier in life, this can have a drastic effect in later years, where you will quickly find yourself with little funding, which will in turn prevent you from achieving certain goals and embarking on the adventures you have always dreamed of.
Every little helps
Even putting a small amount away each and every month will ensure you have money to fall back on when it comes to funding the important things in life. You may choose to put this money in a savings account, or even better, an ISA. When you need it, it can then be removed from this savings account and put towards your child’s education, a dream you’ve always wanted to pursue or a deposit for a house.
There are a number of ways to save but it is wise to check out all the options prior to tying your money down in order to get the account best suited to you with the best possible interest rates. It’s also important to consider your financial situation. If you’re struggling to pay your bills at present, it could be a bad idea to tie your money into a fixed ISA, where it will stay for the next few years. However, if you can afford to do this, an ISA will offer a much better rate of interest on your money and this interest will be tax-free.
Savings is good. I always keep a 6 month emergency fund for rainy days like getting laid off, health emergencies, etc.
But the real trick in today’s economy is figuring out where to put it. Savings accounts are paying no interest, or in some cases negative interest. Laddered CDs are relatively secure and give a little more interest but are a hassle. Precious metals are relatively stable over the long haul, but the friction in the bid/ask spread makes it painful to liquidate them when you need it.
I haven’t been able to figure out a good solution, other than watching inflation eat away at my savings, but I’m still looking.