Saving money the easy way

Putting money into savings every month is a discipline and one that it takes some people quite a few years to get around to – you’ve worked hard to pay off your debts and are now in a situation where you actually have some cash left at the end of each month.

All too often, however, this money is not put to the best use.

Firstly, if you have money in any type of high interest account but do not have an ISA then you are giving money to the taxman. A number of cash ISA’s are available and every year you have an allowance for tax free savings – in other words you won’t have to pay any interest on money within that ISA. There are a number of instant access accounts, so you don’t need to worry about your money being trapped.

The next stage is to make sure you’re getting the best possible return on your money – and be careful of introductory offers. Some accounts offer a high percentage for the first six months, or on the first couple of thousand in the account – be careful with these, unless you are disciplined enough to move the money after the special offer period.

Take a look at some regular savings accounts – these are often not included in the “top percentage” tables found in the Sunday Papers, as they operate on a strict basis. With this type of account, as the name suggests, savers have to save a specific amount each month – if you miss a month then you will not get the high rate of saving. Some accounts offer a relatively normal percentage for the majority of the year and then on the anniversary of the account pay a bonus percentage on the year as long as all criteria have been met (normally something like money not being taken out, or specific monthly payments going in). If you can be disciplined enough to make sure you make those regular payments then this could be the ideal account for you – read the small print carefully though.

And finally…normal savings accounts. If your account is not giving you the highest percentage then consider moving it. It may be worth looking at offsetting your savings against your mortgage. The Sunday Papers or various financial websites will give you the league of the best payers – loyalty to your existing provider is misplaced, you should be making as much of your savings as you possibly can. Afterall, you earned it!