There are different options, so it’s worth thinking about what’s out there, what your needs are and what will suit you best.
If you need inspiration, these tips might help you get organised and save well. So you can start to take control of your money, making it work better for you.
Ready to get started?
Kickstart your money-saving habit
Think about what saving habits you can start forming that will help you get to where you want to be in the future. Take the time now, so that you can look back one day and thank yourself for planning ahead.
A pension is a great place to start, and an excellent way for you to invest in your long-term future.
With over 9 million people in the UK now automatically enrolled into a workplace pension, it’s easier than ever to take that next step towards saving for your future. Read our blog to find out why it makes sense to start saving when you’re young.
By saving even a little each month, with your employer contribution too, you may also benefit from tax relief.
It could all add up over time.
And by making regular payments into your pension, you can be confident knowing that you’re saving for the long-term.
Remember, the money you save into your pension is invested, which means that your savings have the opportunity to grow over time. As with all investments, the value can go down as well as up, and you may get back less than you paid in.
So what else can you do, to make sure you’re feeling ready for those situations that are not so far in the future?
Build up an emergency savings safety net – another great habit
Life doesn’t always go according to plan, and there may be times when you find yourself facing an unexpected bill.
Getting into the habit of regularly putting a bit of money aside for a “rainy day” can help take the stress out of these situations. Keeping you in control.
Recent research carried out by Money Advice Service shows that 40% of working-age people in the UK don’t have a savings buffer. It also found that the same people have less than £100 in savings available to them at any time.
To make sure you don’t fall into this group, sorting out your everyday money and building some cash savings is key.
Look for areas where you can cut back your spending, and stay on top of what’s going in and out of your bank account. Read our blog for more tips on how to get your finances on track in 2018.
How much you need for an emergency buffer will depend on your own circumstances, however Money Advice Service recommends having 3 months’ essential outgoings available. [link]
A good place to keep these savings could be a bank savings account. You could also use a Cash ISA, which, again, is tax efficient. They don’t tend to pay much interest, though, and inflation can affect how much your money is worth.
But as both are easy to access, they could be perfect for those unexpected surprises.
Save up for the moments that matter
You’ll also want to make sure you’re prepared for the bigger things in life, such as helping your child head off to a new city for work or university.
A Stocks and Shares ISA is helpful when you have a bit of time to save – ideally a minimum of five years. This is where investing comes in again. Although the value of your ISA can go up and down, the aim is that you have more time to build up savings. Take a look at our ISA calculator to work out how much your ISA could be worth when you save regularly. You can choose where to invest or pick a ready-made portfolio of funds, depending on how confident you are about investing.
For first-time buyers looking to get on the property ladder, a Help to Buy ISA or a Lifetime ISA are both good places to house your savings for that home deposit.
With a Help to Buy ISA, you can save up to £1,200 when you open your account, and then a maximum of £200 each month. The Government will then boost your savings by 25%, giving you £50 for every £200 you save.
The maximum bonus you can get is £3,000. There are conditions that have to be met, but with the possibility of getting a bit of help towards that first home, it could be a no brainer.
The Lifetime ISA is slightly different, as you can either use your savings to put towards your first home, or to top up your pension savings.
Depending on how long you save for, you might also have the possibility of getting a bigger bonus.
You can save up to £4,000 a year and the Government will add a 25% bonus, up to a maximum of £1,000 per year.
Alice Adcock, a graduate in her early 20s, explains why she’s getting one:
“I’m trying to save for my first flat, so I’m getting a Lifetime ISA to help me. I’m going to save the full £4,000 a year if I can to get the maximum bonus – that’s my goal.”
Unlike the Help to Buy ISA, the Lifetime ISA allows you to choose whether to invest your money in stocks and shares, or put it into cash. You can find out more about the Lifetime ISA on the government’s website.
For more information on the different types of ISA available, read our short guide on ‘what is an ISA’.
Good practice leads to good habits
Mapping out where to put your savings will take a little bit of time at first, however once you’ve repeated it, you’ll get used to it.
You may find you’ve formed a great new habit, one that will help you make the most of your money.