Last-minute mistakes that could cost you your ISA allowance
Human nature is such that there is a tendency among us all to leave things until the very last...
When it comes to saving and investing, the perception can sometimes be that you must have a lot of cash to get started. Yet amid the chaos of our daily lives, we all have something we want to save towards, whether it be buying a property, sending the kids to university, securing our retirement income or just taking a much-needed holiday!
As inflation edges higher and wages are perhaps not rising accordingly, saving money may feel as if it’s more difficult than ever. But it doesn’t have to be. There are lots of small ways to reduce your spending and try to free up some cash to invest.
I did a quick office poll and here are five tips offered by some of my colleagues.
Wheeling the trolley through the aisles of a supermarket, particularly when taking the kids shopping, can sometimes conjure up a few mystery items or impulse buys, which you neither want nor need. Switching to online can comfortably save you up to £20 a week as you only buy what you need. If you prefer the in-store experience, then be sure to look for items like herbs and spices in the ‘world food’ section where you are likely to get more bang for your buck.
Many assume that the longer you stay tied to a company for services such as television and internet, the better the deal you will be offered. In fact nowadays, new customer deals can save you a lot more money. Comparison sites such as Compare the Market and Money Supermarket do all the hard work for you, so just see what’s available out there and you may find the bargain you thought never existed! This includes hassle-free pay-as-you-go TV services rather than the standard 24-month contract you can get tied into, and keeping track of your insurance renewals to ensure you are not paying more than you should.
Facebook, Amazon, Ebay, Gumtree… the list goes on! As well as being able to buy second-hand goods far cheaper than in stores, you can also sell unwanted items of your own rather than taking up valuable space in your house. There are markets for all types of things today, ranging from prams to Peppa Pig collectibles to printers.
Dinner parties are a great and cheap way to enjoy your friends’ company. You can use online shopping for ingredients, invite whoever you want, and have no potentially excruciating cab journey home to look forward to. For the gin-lovers out there, a colleague of mine recommended a monthly Gin Explorer box, which consists of around eight gin shots and mixers for £24.99. What’s more, you receive four different types of gin!
Believe it or not.. there’s more ways to get around than a car! With cars come insurance, regular repairs and fuel. If you live in London, you can get a Boris Bike card for just £90 and avoid those car-related costs. If outside London, you can still ride a bike to work, or even walk. The exercise means you could even ditch the gym if that new year’s resolution is coming unstuck.
You save £250 a month!
Taking advantage of the above five tips could comfortably save you more than £250 per month. If you invested that over five years, assuming 4% annual returns, that could build your pot to over £16,000! That’s a lot for what might be just a little effort in getting the most out of your finances. Even if you invested a smaller amount of £100 per month, assuming the same 4% annual returns, you could net more than £6,500 in five years*.
Don’t worry if some of the above don’t relate specifically to you – as we said, there are lots of ways to reduce your expenditure.
For those of you that are new to investing, read our guide on how to choose a fund.
Multi asset funds are an attractive proposition as the manager picks the underlying investments, but also rebalances the portfolio as the investing environment changes, meaning you don’t need to have sleepless nights worrying about whether you’ve invested in the right asset at the right time.
*The Calculator Site, compound interest calculator, £250/mth, 5 years, 4% annual interest rate, compounded monthly
**The Calculator Site, compound interest calculator, £100/mth, 5 years, 4% annual interest rate, compounded monthly