Each of us is different, not only in terms of our personalities but also our priorities. At different stages of our lives we’ll all have different things we want and need to do and that informs the financial decisions we eventually make.
This matters when it comes to your savings. You must always save with a purpose in mind. Consider your goals – as well as your own character – and, from there choose a product that suits your circumstances. Here’s what you should consider…
Are you the sort of saver that might need regular access to your account?
This can be the case if your job situation is fluid or you are planning to move house and might need to dip deep into the savings for all the associated costs of making the move, for example.
Which account? Take a look at the instant access accounts on the market. Tesco Bank has just launched an Internet Saver, with a strong introductory offer.
Are you desperate to get on the housing ladder? For so many people the hardest hurdle to overcome when looking to become a first time buyer is in raising a deposit. This can typically be ten or more per cent of the price of the home itself and, inevitably, needs to be saved before you can buy.
Which account? It’s worth exploring the possibility of a Help To Buy ISA. The government adds a £50 bonus for every £200 saved in the account, up to savings of £12,000 (therefore a maximum bonus of £3,000).
It’s not just houses that people save for, of course. If you’re the sort of person who likes to make big plans and work towards them then it’s time to dedicate a savings pot just for the cause.
Which account? Short-term bonds might be best in this case. These are accounts that don’t lock away your cash for too long but still deliver decent returns.
Do you like to plan ahead? Many of us have the long term in mind – whether it’s funding our retirement or helping our children to have the best possible start in life. A carefully managed savings pot can help ease your fears about the financial challenges of the future.
Which account? There are a whole range of longer term bonds open to people who aren’t in a hurry for their money while personal pension pots can top up the future income from the state. Plus anyone who has had anything to do with premium bonds will attest that these can be a fun way of setting a nest egg aside for a young relative.
You can get a greater reward from an investment that carries risk. If your financial circumstances allow, it can be worth your while looking for an account that is linked to the stock market. This is ideal for the sort of character that likes to speculate to accumulate and make a calculated decision that brings rewards.
Which account? Investing in funds can be a safe, flexible way in to this form of investment.
Ricky Willis is the original Skint Dad. A money-making enthusiast, father, and husband to Naomi. He is always looking for unique ways to earn a little extra.