There are three main ways that you can maximise your savings. Managing your money carefully; taking advantage of opportunities to increase its value; and reviewing what's happening on a regular basis.
Where do I start to maximise my savings?
Quite simply, if you have money in bank accounts or building societies, make a commitment to review how much interest – if any – you’re getting on that money, and switch those accounts if you can find a better deal elsewhere. Take notice periods into consideration, but look around as every bank lists their current rates online, and many comparison websites hold listings which show the best rates currently available.
How do I ‘manage money more carefully’?
Look at your debts and aim to reduce the interest you’re paying for them. If you can’t pay off all your debts by the time you retire, try to pay off the ones with the highest rates of interest.
Why? Because the interest on debt is usually higher than the interest you’ll receive by investing or saving your money (unless you’re investing in riskier funds, where of course the value may fall as well as rise). Do bear in mind though that sometimes paying off a loan early can trigger an additional payment.
When it comes to ‘reviewing my savings’, what should I do?
We would recommend in the first instance you speak to a professional financial adviser. He or she will help you understand what savings you have, what they are earning you and what the short, medium and long term implications are of making changes to the savings you have now. They will help you maximise your savings potential for growth, whilst considering your appetite for investment risk.
How else can I maximise my savings?
Maximising your savings is all about making sure the interest you earn is generating what you want or need. You can however use your savings to make investments if the returns you’re getting aren’t sufficient. Investment can take many forms. Why not find out more about the types available.