Spare money at the end of the month? “What’s that?” I hear you cry.
Believe it or not, life circumstances can change for the better. End of childcare fees, loans coming to an end, pay rises and promotions, drops in mortgage rates and inheritance. Life may not always be hand to mouth, and if your financial situation were to change for the better, would you know where to put the extra cash?
I have to say, this kind of stuff has never really been my bag, because it hasn’t ever really had to. But, now that we have returned to a two salary household after half a decade of surviving on one, it figures, we have, in theory, more readily available income.
So what should we do? Run for the travel agent? Fill my ever expanding wardrobe with more clothes that I don’t really need? Fine dine and live the high life? Or perhaps try and think a little more carefully about preparing for the future, and making sensible financial decisions.
Savings accounts are far from what they used to be in terms of interest, however it may be the case that you want to save hard for something in which you’ll need to draw that cash in the medium term future. Saving before buying seems a novel approach these days, but with interest rates on loans being sky high, you are always going to get more for your money with a cash payment than a forward loan. You can always pay yourself back the amount you’d have spent on repayments, interest free…
Should you go down the savings route, think ISA ISA ISA. Tax free savings and relief on stocks and share gains…it’s always the first place to explore.
I recently had the opportunity to chat through some financial queries with a pensions adviser. He enlightened me to all sorts of twists and turns in how your pension works at varying stages of salary and investment.
Ultimately, if you imagine seeing out your days in the garden with a smile on your face it’s probably worth building up your pension pot while you can. Get some advice from your workplace if you aren’t sure how to go about it, but cash in your pension may be a place your money works hard for you long term.
Additional payments on your mortgage may not seem the sexiest way to throw a few quid, but with your mortgage being (probably) the biggest loan you’ll ever have, the APR is, long term, one repayment you ideally want to lose as soon as possible. The day you pay off your mortgage may seem forever away, but it’ll come a darn site sooner if you’ve topped up when you can.
Stocks and shares
If you’re feeling a little bit Wolf of Wall Street and fancy dabbling in some stocks and shares, there is plenty of scope to make or break the bank. Investing in shares is often high risk, and to make big gains, you have to take bigger risks, which has never been up my street. That said, many organisations offer competitive share schemes which could be a nice way to spread your assets and put something aside for a rainy day.
I’ve picked up a few shares along my career in pharmaceuticals, and aside from calling it my ‘running away money’ (JOKE) it’s been interesting to watch it’s value rise and fall, and maybe one day we’ll be ballsy enough to make that call SELL SELL SELL.
Bricks and mortar
Many people still claim the best way to invest your money is in bricks and mortar – and one thing is for sure, that this kind of investment has the double whammy of offering you something to enjoy in exchange for your money.
Whether you move to a larger house, build up or out an extension to your existing home or even dabble in a portfolio of properties, there is plenty of opportunity to speculate to accumulate.
Of course, the worriers will always point out the house market can be unpredictable and for sure, you’d be at risk of losing big figures if house prices drop after you’ve purchases, but this is an option for those wanting a side project or business, and who are willing to take the plunge.
If we ever could, our dream would be a second property on the Kent coast. A weekend hideaway, a holiday letting, and who knows, one day perhaps a retirement home. Better get saving in that ISA for a deposit then eh?…
Clearly, I am not a financial expert and this ramble is just the dumpings of my own mind and absolutely not financial advice. But expert advice is available online in places like this website www.wealthify.com, or www.moneysavingexpert.com, or even in your good old fashioned banking provider.
This time next year Rodders…