28th March 2013
Saving money isn’t easy. With advertisers constantly vying for your last disposable pound and living expenses creeping up year after year, keeping back a part of your salary every month isn’t a simple task.
Despite this though, millions of students, professionals, and investors manage to contribute to their savings accounts every month. Using these three simple tips, you can achieve the same level of financial security and savings, as the world’s top investors.
1. Don’t ignore or devalue small contributions
A single pound invested every day may not mean a lot, but 10% of your total income does. Most people can tolerate a 10% hit to their income, without an extreme change in their living standards.
Force yourself to contribute this percentage of your income to a savings account or long-term deposit, and you’ll be able to produce a meaningful balance every year. Thanks to the power of compound interest, a small percentage of your income is all it takes.
Many bank accounts nowadays have low interest rates, so an ISA really is your best bet at present.
2. Start saving as early as possible
Look at any corporate success story and you’ll see that the earliest investors tend to walk away with the highest payoffs. The same is true of long-term savings. Budget a small amount of your income as savings as soon as possible, to enjoy the best return.
The difference between a comfortable retirement fund and a tight pension can often be just one or two years of investment. If you start saving as soon as possible, you’ll be able to enjoy financial freedom during your retirement.
We recommend you to start saving as early as yours 20’s, but if you haven’t put anything away by the time you reach 30-years-old, you really need to get a move on.
3. Set milestones for your savings as you get older
Unexpected events make it futile to plan out every detail of your life. However, it’s not a bad idea to create targets for your savings account of retirement fund as you start to get older.
Create a loose set of milestones for your savings account, and make a real effort to stick with them as you grow older and more wealthy. While it’s unlikely that you’ll hit all of your targets, having a template to follow is a great motivational tool.
Examples include getting onto the property ladder and setting up a pension’s scheme, by the time you reach 30-years-old.
This article was written by Cheselden Continuing Care. Visit their website to learn more about continuing healthcare, and gain expert advice on paying for care home fees.