«   |   »

Achieving Financial Security in the UK: Are You Making The Most Of Your Money?

Money doesn’t quite make the world go round, but most people would agree that financial security sure makes it easier to have a relaxed and happy lifestyle. Unfortunately, achieving financial security is more dream than reality for a lot of people. There are mortgages to be paid off; university funds to be saved for; and the looming prospect of retirement and the world of pensions to consider. However, with careful planning and a bit of financial acumen, the prospect of financial security can be a reality for just about anyone committed to making their money work for them.

Achieving financial securityRemember, for advice tailored for you and your family’s personal situation, it’s best to consult with an independent financial advisor who will be happy to help you make sure your money is working hard for you.

Pay Off Debts First

You might be proud of having saved a bit of cash in a savings account making, at most, 3% interest per year – but have you considered your credit card debts are costing you interest at 19% APR? If you have £1,000 in savings and £1,000 in credit card debit, the paltry £30 earned in interest from your savings will be devoured by the £190 charge on your credit card.

In short, the quickest way to lose money is to let interest from your debts eat away at your savings: so pay off debts as soon as you can. Only very rarely will the money you make from investments come even close to exceeding the interest on money owed.

Invest Your Savings Wisely

Far too often, people leave their savings lying half-forgotten in old ISAs, earning a pitiful rate of interest. Or they might automatically save their money at the same bank where they hold their current account without taking the time to shop around and find a better deal.

Since banks are eager for your custom, they can and will offer very competitive savings rates, particularly for new customers. Depending on the size of your savings, even something as small as transferring your ISA to another bank with a higher interest rate can leave you hundreds of pounds better off every year. Take a look at the current rates for ISAs from National Savings and Investments to get an idea of what your ISA should be paying you.

Other Investments

If you’re looking for something a bit bolder, you can consider investing in the stock market. This can be a highly risky or comparatively safe investment, depending on what you do with your money. You could put all your money on the next Google and make a killing overnight – but it’s just as likely that the company will fold and you’ll lose your entire investment.

A more sensible option is to invest in a fund or tracker that is influenced by hundreds or thousands of companies and will rise and fall more gently, in line with the general performance of the stock market.

If you don’t fancy following the complex undulations of the stock market, there are a host of alternative investments available. Becoming a landlord with a buy-to-let mortgage has become increasingly popular and can ensure a steady income, but will require extra work managing the property and meeting with tenants. You could also consider contributing more to your pension – since employers will often match what you pay in, it can ensure you make the most of your savings.

See Also:



Image courtesy of Vichaya Kiatying-Angsulee / FreeDigitalPhotos.net