By Jim Dean, Chiprang.com guest writer (for Guest Posts TOS, please refer Terms ) We are all familiar with the saving during blue skies ...
By Jim Dean, Chiprang.com guest writer (for Guest Posts TOS, please refer Terms)
We are all familiar with the saving during blue skies for a rainy day – though how many of us follow this rule and how often do we wonder how much should we have saved here and there for emergencies.
Well there are numerous different things you should save for and also there are numerous personal and relative factors that you should take into account when thinking about your savings. Savings is not a simple factor of having x amount by a certain stage.
Saying all of that there is a number of things you should take into consideration, when questioning the health of your savings.
The government currently provides nearly £115 a week to people as a pension, now it doesn’t take a mathematician to work out that this is not a large amount of money to survive on. Saving for a pension is one of the most important things you will ever do, lest you wish to live a life of penury in your old age.
Saving 5 -10 per cent of your monthly salary at least and placing it in a high yield pensions account can make a huge difference if you start early. Obviously if you start at a later stage of your life this percentage needs to increase.
As far as savings for contingency goes you should try and save about 3 month’s salary and keep it aside and in an easy access savings account that you can instantly access at all times. This means should any certain sort of emergency scenario come about you will be able to drop back on that cash and survive until you find another job.
Obviously these figures aren’t concrete and you should aim to increase or decrease these depending on certain circumstances. Increasing to amount you save, to we will say 20 per cent can have massive consequences on the amount of money you have for a rainy day. You must remember that you still need to live today also, so don’t cut things too close to the bone.
There are currently a number of good deals available for savers as interest rates are expected to rise in the coming couple of quarters. The biggest line to draw with these costs is the balance between having access to cash instantly and having longer term investments. It is advised to have cash for around one fifth of your savings and the rest invested in something else and higher yield.
Investing money in ISA accounts is a good bet and one that will carry a certain amount of a return after a certain period of time – though you cannot delve in during the set period or you will be penalised heavily.
These are all things to consider when saving and can make a massive difference to the lifestyle you lead in emergency or latter life.
Jim Dean is a keen financial writer who works for Ulster Bank who can help you deal with your regular savings accounts.