For many, the concept of having money to ‘put aside’ can be a daunting one. However, it is possible, even with your first job.
You are here because you want more disposable money. You may finally have a bit of money coming in or have done for a long time but cannot seem to get it to go far. It is important to think about tomorrow, and this means putting a little money aside, or paying off those persistent debts. Here, we look to help you make your earnings go a little further.
Look at your debts
Having outstanding debt is something that you will want to tackle before beginning the process of saving money. The interest you wlll be paying on these is more than any interest you will earn on savings, so focus on paying this off first. Going further, debts with high levels of interest, think credit cards, can be balance transferred to lower-interest accounts to reduce the interest payable per month.
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Cull your spending
You need to have a look at what you are currently spending money on to see if you can make any cuts to this. Sit down and analyse you recent bank statements and carefully look to see if anything is unwarranted or no longer needed.
Making a note of all of your essential expenses and comparing this to your actual outgoings is an effective way of seeing if your additional spending is high. If there are any services that you are paying for but don’t use, cancel them. Although they may only cost you $10 a month, this, accumulated with other ‘negligible’ expenses can save you thousands of dollars a year.
Look into better saving accounts
Many people have money build up in a current account and receive nominal interest on these savings. Transferring this to a savings account can help you build some additional money with minimal effort.
Compare savings accounts between banks and see if you can negotiate a good rate on a savings account with your current bank holder. Savings accounts are low risk and suited for those finding their feet with disposable income.
Invest your money
If you are in a position to have saved up some extra money, a smart move would be to invest this extra money.
There are many ways to invest, from common investments in bonds and stocks, to alternative investments growing in popularity such as student property or debt investment.
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Generally speaking, investment in property is a safe bet. Whether this is the purchase of a property for the purposes of buy-to-let or a more short-term investment in a loan note, the money you can earn on this approach when compared to a savings account is substantial, particularly with interest rates remaining low.
Some alternative investments can return as high as 15% per year with companies that have paid out to investors on every occasion prior. You simply cannot find a saving account that will match anywhere near this and you mitigate the risk when working with a financial professional in the field.
Change your mindset
Getting back to basics, changing your mindset on money will be crucial. Consider it a challenge, aim to put aside a set amount each month as your personal challenge or aim.
Once you get used to having additional money, we find it easier to get used to the lifestyle this allows, but harder to drop it if money decreases. Put aside some money for savings or investments to help mitigate any changes in personal circumstances or emergency expenses.
Following the above tips, you should begin to realise a little extra disposable income, or even a lot If you were overspending considerably previously. Be tough, if you don’t see enough value in an expense, cut it. If you think your money should go further, invest it. Being proactive is the biggest and best step you can make here.