Cash advice: Boost your savings
January can be a difficult month with the financial hangover from Christmas spending. Be better with money, shift your debt and boost your savings all year round with these top tips from the Financially Fabulous money team...
1 CLEAR DEBT
If you have credit card debt, consider moving it to a 0 per cent balance trasnfer card. Just remember you’ll need to pay off your debt in the 0 per cent balance period, otherwise interest rates will shoot up – and don’t spend on it. See moneysupermarket.com for deals. Talking about debt is also vital. If you’re concerned about debt, contact stepchange.org or nationaldebtline.org (the latter offer a webchat service, too) for help.
2 MAKE SAVING EASIER
If you find it difficult to meet your savings goals each month, set up a direct debit moving money from your current account into your savings just after you get paid each month. While you’ll want to keep monthly outgoings (rent/mortgage, bills etc) as your first priority, savings should be your next.
3 BUDGET CAREFULLY
Find it hard to keep track of where your money is going? Keeping a money diary, whether it’s a physical or digital one, like the Yolt app ( yolt.com), could help you ‘see exactly where your money is going. Being more mindful can help with extra costs if you’re saving for something specific, too, to help you set up a realistic savings goal.
4 CHECK YOUR INTEREST
To make your savings grow, it’s all about interest. The rate of inflation was 1.5 per cent as of November 2019*, so any money in an account that pays you less interest than that figure is actually losing value! To compare rates for savings accounts, check out comparethemarket.com. Saving into a Stocks and Shares ISA is worth considering as it can help your money grow ( you can invest up to £20k into an ISA in this current tax year).
5 CONSIDER INVESTING
This idea may seem intimidating but, with poor interest rates and inflation eroding the value of cash, it could be a way to supercharge your savings. Some investment apps, such as moneyboxapp.com, even let you begin with just £1. It then rounds up your loose change each time and puts it into an investment fund/or an investment ISA.