Take control of your finances: five steps to growing your money
There's no magic solution to growing your money - but there are some things you can do that will help. In the second part of our guide to taking control of your finances, we reveal the five steps to make your money go further.
Although it takes discipline, saving or investing your money is the best way of ensuring you're financially prepared for it in the future. Here are five ways to get started.
Build up an emergency savings pot worth three to six month's salary – how big you make it will depend on your financial priorities – for example do you have a family to provide for or a hefty mortgage to clear? Make sure this money is easy to access.
After securing emergency savings, the best place to put your money is in an ISA. As a tax-efficient savings account all of the interest you earn will go to you compared to standard savings accounts where you have to pay tax on any interest made.
If you've got a lump sum look for a fixed-rate account that accepts a one–off payment great otherwise set up a direct debit from your current account so that you put money away each month. Arrange the direct debit to come out just after you've been paid so there's sufficient money in your account.
If you've got a longer timeframe – and an appetite for risk consider a stocks and shares ISA. Instead of choosing individual stocks, you can select collective investments, which give you exposure to a variety of companies and mean that you reduce the level of risk you're exposed to.
Of course there is always risk attached to investing so have a look at the investing section on our website for more help on how to pick your potfolio.
Start saving into a pension as soon as you can – especially if your employer promises to match or even exceed your pension contributions. Don't forget that you'll also benefit from tax relief on your contributions so for every £1 put into a pension pot a basic-rate taxpayer will in effect have contributed £1.20, while a higher-rate taxpayer would have put in £1.40.
And if you're already paying into a pension be sure to check how it's doing on at least a yearly basis to ensure you're not investing in duds.
It's all too easy to get caught up saving money on things like our weekly food shop, bills and holidays but these changes will prepare you for the long term.