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If you are reading this piece, it is because you have already started thinking about retirement. You are probably interested in gathering information in order to handle your financial future in a more conscious way. Are you aware of your overall earnings and of the expenses you have? Making a plan is the right thing to do, in order to have a general overview of your situation and needs. While doing research online, it is common to come across the topic of savings accounts. A lot of people in the United Kingdom own one. Reading and studying the matter is the right thing to do in order to understand and decide if it is convenient for you to open one. In this article you can find some useful information that can help you have a better understanding of the topic.
How is your financial situation?
Making a detailed examination of your financial situation is the first step in developing a savings strategy for your retirement, since it helps you get a clear view. Maybe you have already started saving some money, but you don’t know if you are on the right track and how much savings is enough. For more info about the Average savings by age and income in the UK, you can check out this page. Whether you have already chosen the amount of money to deposit into your account or not, it is a very good idea to keep an eye on all of your earnings and outgoing costs. Once you are able to evaluate the situation, you can go further and consider creating your own plan. It is not an easy task, since there are many factors to consider that can affect or influence in some ways your strategy.
Have you set up your goals?
Once you have your plan, it is time to set up your goals. What are you aiming for? Why do you want to save some money? Is it for a holiday? Are you interested in buying a property? Do you want to save more money for your retirement? The answers to those questions are important and they can amend your strategy, guiding your decisions towards the right direction. Setting goals can give saving money a new purpose and ensure that you stick to the plan.
Set a monthly deposit for your savings plan
Choose a monthly contribution that you are able to maintain and whenever you are ready start with your savings plan and try always to stick with your plan. In order to do so you should consider this deposit as any other expense, something you can’t avoid to pay. If it can help you, make the transaction at the beginning of the month, or make it automated. This way it will be deducted from your salary automatically. Even if it is a small sum, consider the bigger picture, it will grow over time and maybe in the future you will be able to save more each month.
Leave your money in the savings account
The money you save for your future should be in a separate savings account. If you accumulate the sum in the account you use every day you are always tempted by spending it or somehow using this amount. Once you create a different account for this purpose, it is better not to take any sum from it. You can be charged fees each time you withdraw money from your savings account, depending on the type of account you create. Moreover, you might also lose interest. For this reason, consider an emergency fund before opening it and begin to save.
Investments, another option
A savings account is a place to start, especially if you invest for a longer time. However, allocating your money purchasing unit trusts, stocks, ETFs (Exchange traded funds), bonds, etc., can be risky. The markets are volatile and no one can predict the results. Although, these kinds of options might have more results in the long run. There are several assets to consider. If you are curious, but you do not feel like understanding enough, you can always count on professionals for help.