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It’s probably fair to say that we all want more money to spend on luxuries, rather than putting all our money towards the basics, like food and bills. But, in order to save this money, we could probably do more to make our money go further. With a little effort and some smart decision making, there are ways we can all grow our personal finances this year! Here are five ways to do just that:
The first stage of any financial plan should be to clear the decks. Borrowing can be a great way to get the things we need when we’re not able to save up for them, and many of us have taken the opportunity to borrow for larger expenses. For example, you might have taken out a car loan, or snapped up short-term financial products such as loans and credit cards, if the interest rates are low. In fact, there are many credit cards that offer 0% interest for the first year.
However, borrowing isn’t always a long term solution, and settling any lingering debts that you have will ensure that you’re in the best place to take on finance for anything that you need to purchase as the year progresses. Not only will this grow your own capacity to borrow, but it should reduce the amount you’re spending on interest and free up more of your personal finance to go towards the things you really want.
Savings accounts have taken a bit of a battering as the financial situation across the UK has worsened. But that doesn’t mean that there aren’t ways to squirrel away your cash to ensure it grows. If you put in the research, you may start to come across things such as ‘innovative finance ISAs’ that take your cash to fund peer-to-peer business loans and deliver a much higher percentage in terms of interest than other savings accounts in return.
Investing in Premium Bonds can also be a good way to earn some money on your savings. These are safe to invest in, and the more you invest, the better chance you have of winning money each month. Even if it’s only £100 every few months, that could still be a better return than leaving your money in the bank!
On top of your savings accounts, it’s sensible to look at types of investments that could grow your cash pot. For most people, this means turning to the markets. The advent of technology makes this sort of investment far less daunting or indeed difficult. With spread betting you can invest tax-free without even needing to physically own stocks or shares for yourself, making this a quick and effective way to invest.
And if you are interested in stocks and shares, if you contact a financial advisor, you’ll have a much better chance of knowing where the risks are, and if it’s a good idea to invest your money in particular ventures.
You have to keep an eye on the long term when it comes to your personal finances. Don’t judge your success based on your bank balance, think beyond that to consider what your money will do for you in the medium to long term too. Nowhere is that more relevant than with your pension.
If you do not have a full National Insurance record then, as The Telegraph notes, it pays to buy ‘extra years’ of state pension. This means that paying £733 can get you an extra £230 a year for life. The Telegraph also notes that every nine weeks you delay taking your state pension will deliver you an extra one percent a week.
Looking after your money is one way to grow your personal finances, the other is to try to grow the amount you bring in in the first place. Wages in the UK have been largely stagnant since the financial crisis but they do appear to be slowly growing again.
Make this the year you stump up the confidence to ask for an increase in your pay packet. If your employer isn’t willing to give you a raise, it might be time to look around for something better.