Five Ways to Stretch Your Budget Without Giving Up Life’s Luxury, by RACHEL RICKARD STRAUS
The New Year’s resolutions that will make the biggest difference to your bank balance don’t have to be a slog.
In fact, you could check them off your list today.
So before you decide to give up morning coffee or takeaways, consider the following:
1. Move your savings
Switching to a new savings account used to be quite a task. Now you can do it in minutes from the comfort of your home.
Choose one of our savings guru Sylvia Morris’s top picks from our independent savings tables and get started.
2. Set up a standing order for savings
If you really want to boost your savings with minimal effort, you can set up a standing order in your savings account that will be debited from your checking account just after payday.
This is about the most painless way to save, because the money leaves your account before you have time to spend it.
Perfect time: The new year offers a great opportunity to boost your finances
3. Increase pension contributions
Ask your employer if you can increase the amount towards your pension. Adding a percentage point can increase the size of your pension pot by a quarter, according to figures from the financial company Wealth at Work.
For example, if a 25-year-old earning £40,000 a year paid the minimum allowable amount of 5 per cent in pension, and his employer paid 3 per cent, he would retire at the age of 68.
But if they paid an extra 1 per cent – and the employer matched that – they would have £248,353 – an increase of £49,670, assuming a 5 per cent investment return after fees.
4. Open stocks and shares Isa
If you have savings that you probably won’t need for the next five to 10 years, consider investing them.
You will probably make more money from investment returns than from interest on savings. Start here with my six golden rules.
5. Read Money Mail, Wealth and personal finance and this is money
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I wish you a very happy and prosperous New Year from the Money team.
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