Budgeting & Thrifty

Be Savings Savvy

piggy bankIt does feel good to have some savings set aside. A little rainy day money or a nest-egg. Nice to see the account adding up and always good to see a little interest going on. It can provide peace of mind and it’s handy to get into the saving habit early, so that you’re used to it and don’t miss it.

Back when my life was all about finance (oh, the heady fun days!), I saw all manner of savings/debts, so I thought I’d share a few tips..

Owing money on credit cards, whilst having savings. Why? I mean, yes, if the credit card balance is paid in full each month, fine, or if the card is a 0% interest rate, then that’s actually very savvy. But, I’d see people paying the typical 17% rates on them, paying minimum amounts each month, but still saving. You’re likely to get 1-2% on those savings, meanwhile you’re paying 17% on a debt. Use the savings to pay off the card.

Keeping a little nest egg ‘under the mattress’ (yes, it happens..!) or ‘in a jar/money box’. This became even more popular during the banking crisis when people were panicking that all financial institutions would fold and they’d lose their cash. If the money isn’t in the system and earning any interest (though granted, it’s not huge), it’s being eroded daily by inflation. Get those money boxes emptied out regularly and into the bank/building society.

Unless you’ve a great rate paying current account, move your excess money out of there as soon as you can into a savings account. Make use of ISA’s first if you’re a tax payer, and then other accounts if you fill that up with your annual allowance.

If you’ve a mortgage and save regularly, or have a decent lump sum in savings, do look into Offset mortgages. There are lots of different types, and they can work differently, but generally speaking, you use your savings balance to offset the amount you pay back on your mortgage, which reduces your overall debt/term. The savings account tends to remain totally accessible, so you can still use your savings as and when you need them. Worth a look.

Rates on savings accounts fluctuate a fair bit, and what was once a market-leader may no longer be. If you’ve the time, every few months, do double-check what you’re getting and Google for the best rates around. It may be worth switching every now and then.

And do start savings accounts for children as soon as possible. You know how hard it can be to save up for things or pay for things with little notice. The odd twenty pounds here and there, maybe at birthdays and Christmas can really add up for your little ones, and I’m certain they’ll thank you for it later! We’ve gone for both instant access savings accounts and longer term accounts for ours, and though we don’t put huge amounts in, little bits regularly, such as pocket money from their grandparents, money box empties, Kidstart spends and so on, has seen them already grow to a nice amount, and they’ve years to go before they’ll need any of it, so I look forward to them enjoying it when that time comes.

How do you save? Or do you plump for debt clearance first? Very wise 😉

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7 Comments

  1. Mary Boyd November 21, 2013
    • admin November 21, 2013
  2. Iona@redpeffer November 21, 2013
    • admin November 21, 2013
  3. MummyTries November 21, 2013
    • admin November 21, 2013
  4. Gina Caro November 22, 2013

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