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If you have saved for years or you are only just starting, it is worth considering what you can do with your savings. There are several options available to you when it comes to using your savings for your future, and there are some considerations you should think about like inflation, an emergency fund, and investing. Inflation is the rise in prices over time, meaning that there is a fall in the purchasing value of money. Basically, your money is worth less in the future. According to a study from Business Insider, inflation takes an average of 3.87% off the value of your money every year, so if you are trying to make the most of your savings, it can be worth investing it to outpace inflation.
It is also a good idea to start prioritizing savings instead of having to spend all your money on paying back debt and considering a low-interest rate debt consolidation loan from somewhere like White Mountain Partners.
A savings account is essential, and putting money aside regularly is a wise decision. It is usually recommended that you save up an emergency fund, which contains three months of living costs. The emergency fund should cover food, bills, rent etc, and is there just in case something bad happens and you need some money you can access. Because of this, you should have an instant access savings account where this money is kept. Try to find an account with interest if you can, but the main function of this money is so that it is easily accessible.
Another popular way of saving is putting your money into an ISA, or Individual Savings Account. This is a tax-free savings account, so all of the interest you earn you keep. Every year you get a new ISA allowance, with a certain amount of money you can save every year. You can also get a Lifetime ISA or a Help to Buy ISA, and it is worth considering these options.
If you already have an emergency fund in place, then the next step is investing your savings so that your money works for you and outpaces inflation. One of the best and most popular options for saving is investing in property. Property investment has multiple benefits – the first is capital appreciation – this means the amount that your property goes up over time. Property usually increases in value, and the largest gains are over the longest period. Another benefit of property investment is the option of letting out your property to tenants. Property investment experts RW Invest have a range of properties specifically designed for buy to let property investors. Their properties have assured rental yields for a certain period, generating income, and are also available off-plan, which gives you more opportunities for capital appreciation.
If you are saving regularly, then it could be worth opening a regular savings account. These accounts are perfect for those who are saving a little bit every month, and they often have far higher interest rates than a standard account. Because of these high-interest rates, there are far more restrictions on these accounts. There will be limitations on whether you can take money out, you have to deposit every month, and sometimes they only last a year.
This is a collaborative post.
Welcome to Birds and Lilies! I'm Lou: mother, blogger and freelance writer. This is my lifestyle blog, where I talk about motherhood, infertility and IVF, beauty, my love for food and wine, as well as my thoughts about stuff, and our real-life and travel adventures.
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