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If you’ve vowed to do more with your savings this year, you’re not alone. Thousands make a similar vow at the dawn of a new year, determining to improve on the previous year’s effort. Unless you’ve just taken on a new job or received a promotion however, odds are you’re not going to be taking home more money. That means you’re going to have to do more with the money you have.
By investing shrewdly and making subtle adjustments to your lifestyle, you can reduce your outgoings and increase your bank balance. Sounds simple, right? It is – provided you persevere and don’t slip into old habits. That’s the key to mastering any new year’s resolution, and your savings are no different.
Make a standing order: How does money go into your savings account at present – as and when you can afford to, or on a regular basis? The first step towards boosting your savings is to set up a monthly payment that will transfer funds from your current account to your savings account. You do have a savings account, right? If not, now would be a great time to acquire one. Regular savings accounts are easy to set up and are an invaluable asset.
Don’t pay tax: Tax evasion is illegal, so sadly you’re still going to have to pay tax on your earnings. Thankfully, you don’t have to follow suit with your savings. Open an ISA and enjoy over £5,000 of tax-free cash savings this year. Best of all, should you require access to your savings at short notice, you can easily dip into your ISA. Ideally however, you’ll want to leave it to accrue interest and save those pennies for a really rainy day.
Clear your credit card: Are you paying interest on your credit card each month? Get it paid off. Sure, initially that may require making a dent in your savings, but you’ll immediately start to reap the rewards. Over the course of a year, the hundreds of pounds you’ll typically pay in credit card interest can mitigate any interest you’ll accrue on your savings.
Overpay your mortgage: Paying more money than you’re supposed to might not sound like the smartest way to save. After all, how are you expected to set money aside for an ISA or savings account if you’re also attempting to pay off your mortgage early? While this option won’t be feasible for everyone, it is worth considering if you’ve a lump sum at your disposal. If your mortgage provider will let you pay off your mortgage early, you’ll pay less interest and could save a considerable sum.
If you’re genuinely looking to adopt a better savings regime this year, there are numerous ways to go about it. Work out ways in which you can make savings, determine how much you can afford to set aside each month and then get started. There’s no time like the present.
Catherine Halsey writes for a digital marketing agency on a range of subjects. This article was written on behalf of Ulster Bank.