Making the right investments is crucial. An ineffective investment could leave you in danger of losing money and failing to set yourself up for a solid future. Instead, you should aim to create a financial planning strategy that can help you grow your savings immediately and over a long period of time. If you’re a parent, an entrepreneur or an investor, getting the right advice is a central pillar of this process. Below we explore the best ways to efficiently grow your money.
Set up a budget
This is one of the easiest ways to look after your money and should be an immediate step to take. It should be fairly simple to set up too. Work out all your outgoings each month (bills, shopping etc) and compare this to your incoming salary after tax. Ideally, you want to be in a position where you’re bringing in more than you spend, in order to keep your savings growing.
Build up your savings
Savings are key. They can help you move towards long-term goals such as buying a car or a house. Or they can help you ride out any sudden periods of unemployment. Ideally, you want a fund that equals at least three to six months of your earnings, in order to insulate yourself. The aforementioned budget can help you move towards this, but you can also build your savings by putting your spare money into an ISA or by investing it carefully elsewhere.
Getting on the housing ladder
One long-term way of improving your financial situation is to get on the housing ladder. Once you stop giving money up on rent each month you can begin to boost your savings. Even though you’ll still have to make mortgage payments, these will at least go towards an asset that you can work towards owning. If you can pay off your mortgage early, even better. Suddenly you’ll be in a position where you have no financial commitments towards housing, allowing you to really focus on saving money.
Paying off loans and credit cards
In some cases, it’s important just to get on firm financial ground before you start saving. Paying off any loans and credit card debt is key to this. Try and pay off whichever debt has the highest rate of interest first, while also sticking to the terms and conditions of each package. Alternatively, if you are losing control of your debts speak to a debt advice charity to prevent the situation from spiralling.
Financial planning can feel overwhelming amongst your other stresses in life. But by carefully following the advice above, you can start to save for the future.