In volatile times such as these, it’s understandable to be anxious about your financial situation. With the cost of living increasing faster than wages, active consideration about your savings – and your hopes for the long term – would absolutely be a wise thing to do. Here we’ll examine some key ways you can gain control of your expenditures, create extra savings and prepare for a more comfortable future.
Though easier said than done, eliminating debt should be the first step you take in preparing for your financial future. Rather than creating a new account to place savings, funnel any extra income or savings you may make into outstanding overdrafts or credit card debts. With the help of professional insolvency practitioners like Hudson Weir, prioritise the debts with higher interest rates, as eliminating them first will prevent your debt increasing incrementally as you attempt to clear it.
With your debts cleared, you now have a clean slate on which to build your savings. Judicious use of a budget will have you squeezing the most out of every paycheck, and saving to your best. Figure out your monthly incomings and outgoings to the penny, and find your net income. With rough estimates of food and fun expenditure, you now have a clear picture of what you are able to save monthly.
On the subject of reviewing your income and outgoings, now would be a good time for you to review your utilities. Are you paying the best possible price for energy or internet? Better deals might be available, which could mean additional saving power.
While counterintuitive in the short term, certain well-placed purchases can save you considerable amounts of money in the long term. For example, the rising cost of petrol might make an electric vehicle far cheaper to run; Vauxhall electric cars are affordable and reliable, reducing maintenance costs as well as fuel and consolidating all of your energy expenditure into one place.
Perhaps the most important tool in saving for the long term is that of the diverse portfolio. Rather than using a savings account with a marginal interest rate, entrusting your savings to an investment fund is the easiest way to do this, wherein your money is pooled with others and entrusted to a specialist fund manager, who invests on your collective behalf. Funds tend to carry less risk than trading on the stock market directly, but also return modest rewards – and those rewards are not guaranteed. However, performance is often better than the interest rates offered by high-street banks, resulting in more savings for you.