The main ethos of my website is to cut costs so that you can save money – either for your home, your retirement, a new venture or simply an emergency fund. So, if you’ve been able to put aside some cash, I’m absolutely delighted to hear it! Now that you’ve got some funds to your name, it’s possible to make your money grow simply by saving it in the ‘right’ place. Of course, where you keep your money and what you do with it is up to you, but I’d like to share some ideas that I’ve personally been considering.
In fact, I’ve been studying a number of courses and watching webinars with Female Invest to learn more about investing, savings and pensions. There are so many things that I didn’t know about making the most of your money before I started using the FI app and I’m now excited to start boosting my savings with some of the following ideas:
Investing
You can do some straightforward investing with your money with the aim of making it grow. However, with the stock or currency markets, your investments can also go down as well as up, so it needs to be carefully considered and researched. I’ve found that it’s easy to chart the progress of the financial markets using the published graphs. This allows you to see fluctuations in possible investments such as foreign currencies, Bitcoin price, funds, stocks, shares and real estate.
One of my main conclusions from studying such graphs is that over time, investments tend to outperform savings in terms of % gain. If you’re committed to investing for the very long term – 10-20+ years, there’s usually an upward trend on the stock market graphs I’ve studied.
That said, it’s all down to the funds or bonds you choose and how ‘weather-proof’ your portfolio is in terms of geographic location and spread of industries. There are SO many variables and you can never know what the future holds so don’t put all your life savings into investments and do plenty of research before you start. Plus, you’ll need to pay tax on income gained from your investments.
ISAs
I’ve found that keeping your savings in an ISA is a great way to allow your money to grow without needing to pay any tax on the returns. This could be in an instant-access ISA or fixed-term ISA that pays you a percentage of interest. You’ll be paid interest monthly or yearly and never need to put that gain on a tax return.
Alternatively, your savings could be in a stocks and shares ISA that allows you to invest in the market and still not pay tax on dividends or capital gains from your investments, which seems like a sensible option compared to standard investment accounts.
The thing with ISAs is that you can only save £20k per year in any ISAs you have (which can be split between cash and investment ISAs) so if you have even more than that to save, you won’t be able to put it all into ISAs all at once.
That said, if you’re saving monthly like I am, you might not reach the yearly £20k limit and it’ll reset in the next tax year, allowing you to save up to £20k again the next year. I think it’s a nice aim to be able to save £20k each year – that would be very nice indeed!
Fixed term savings
You can also help your savings to grow by keeping your money in a savings account that offers a good interest rate. This can be an instant access account that allows you to withdraw and use your savings whenever needed (great for an emergency fund) or you could get a better % interest rate if you commit to a fixed term.
Choosing to put your money into an account for 1 year, 2 years, 5 years or more could allow you to lock in a much better interest rate than the current fluctuating rates, and for a much longer period. You’ll be pretty chuffed if you’re still earning 5% on your savings if interest rates have gone back down to 2% in a few years time.
However, this usually means you can’t access your money during that time, or can only withdraw a small amount of it with there being a penalty fee to pay – similar to a fixed-term ISA. So, if you think you’re going to be needing your savings (perhaps in an emergency) you may not want to commit your savings for a long duration.
Actually, most of these savings ideas benefit from making a long-term commitment to save your money. No matter whether you’re investing in stocks, bonds and funds or saving in an ISA or fixed-term savings account, the longer you’re able to keep your money ‘locked in’ (I’m talking a decade or more) the more likely it is that you’ll come out with a profit at the end, even after fluctuations in the market or interest rates have happened.
Let me know if you have other ideas for growing your savings pot in the comments below. I’d love to hear how you were able to use your money to make more money! 🙂
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