You don’t have to have a big income to save for the future. How much you can save for the years ahead is just as much about your mindset – the value you place on preparing financially – as to how cleverly you use the resources you have at hand. Retirement is likely to hit us all at some stage and now, in the 21st century, through saving well we have the opportunity to make that post-work period not only comfortable, but a time to explore that exciting bucket list.
Saving money to fund retirement is as important as saving for those short-term needs. But are we saving enough? Is there any way we can enhance that pay-out when we finally say goodbye to the responsibilities of work? How can we take control?
We all need motivation for putting those extra few pounds away and unfortunately retirement at times can seem a little vague, distant and uninteresting. So, try to visualise what you want your retirement to look like. Where will you be living? What do you want to be doing? Who will be around you? Have a clear idea as to what you are saving for. True, your needs and aspirations will change throughout your life but by creating those foundations early on, you will get into the mindset of putting that extra bit of money away for something real and tangible.
As we head little by little towards a cashless society, we tend to use the pounds, but the bits and pieces (the copper and silver coins) unfortunately get lost along the roadside (literally!). Do you know how much money you have in your wallet, purse or trouser pocket at this very moment? Take a minute to do a little roundup – we think you will be pleasantly surprised!
These bits and bobs which would perhaps never get used, can be added to little savings pots in your home. They then begin to have a value. You can decide what they will be used for – short term or long-term savings. And though these amounts can seem tiny individually, once they start building, they can make a great difference to your overall savings – and future.
Getting into a savings mindset can make a real difference to how effective your money resources are and how smooth and satisfying your future life could be. But don’t let an overly comfortable savings habit blinker you to the value of what you can put away.
Living in the moment and spending all income on treats can be a great temptation, but if you fail to look ahead on your life journey, then you are unlikely to prepare for the hurdles or big milestones ahead. Most people tend to put their money into four (sometimes virtual) specific pots when saving for the future:
If you leave too much money in your ordinary current account, it is being stored securely but is it really working as hard as it can for you? Interest rates are likely to be low in a current account so it is being wasted while it just sits there. Can you transfer money to a higher interest account?
Short-term investment savings account -for instance ISA accounts (your savings are not available for several years but the interest is good) – can be great for putting money away for the longer term.
Opting-in to your employer’s pension can be a great way to get on the pension ladder. You will begin saving for your retirement at an early age. It takes the hassle out of putting it all in place and comes with a free contribution from your boss. However, if you have other personal pensions, it is worth regularly checking them because high charges, poor performance and bad management could be taking chunks out of your retirement plans without you noticing.
We are authorised and regulated by the Financial Conduct authority. This means we can help you to make the best possible decisions when it comes to your pension.