We are told from an early age to get into the habit of saving a bit of our income each month, but the high cost of living is making this hard to achieve in the current economic climate.
Take a look at some of the reasons why many people fail to save, and how these problems can be best overcome.
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Are you overspending on an expensive and luxurious lifestyle? Or are you simply struggling to make ends meet as fuel, food and energy are all putting extra pressure on your monthly income?
If you are not prepared to make any changes to your current lifestyle to be able to save some money each month, then think about how your lifestyle could change should you lose your job, and this may change your mind.
Without a pot of money put aside for the future you could easily be plunged into poverty if you lose your job suddenly and are unable to find a new one straight away.
If your income is being so stretched just meeting monthly bills and essentials, then it is advised you look at ways you can reduce these outgoings. Whether it’s switching credit cards to receive vouchers and discounts off your everyday spending like petrol, or even giving up your car and walking to work, making these changes will be worth it in the long run.
Low Interest Rates
The low interest rate market may be off-putting for many potential savers out there, with some possibly waiting for the base rate to rise before committing to a certain savings product.
However, the Bank of England has for the 27th consecutive month announced its decision to hold the base rate at 0.5 percent, so for those waiting for this to rise, their money could be missing out on valuable interest.
Even if you can only afford to tuck away a small amount here and there, it will be worthwhile for the future, and you will have a good pot of money set aside for when interest rates do rise and you can be pickier with where you keep your hard earned savings.
Invest in an ISA
In the meantime, Instant Access Cash ISAs can give savers tax free savings and the flexibility to access their money should they need it, without losing the interest they have accumulated up until that point.
Santander is offering a competitive Instant Access Cash ISA which gives the saver a gross rate of 3 percent interest on their savings. There is a minimum investment of £1.00 for the eSaver Issue 3, so you do not need to deposit a hefty amount to start receiving interest.
If you are in a slightly more stable position and can afford to tuck your money away for a year, for example, then you could take advantage of some better interest rate offers on the market.
NatWest is offering an impressive gross rate of 3.70 percent on their 3 Year Fixed Rate ISA (Issue 12) when a saver invests a minimum of £1,000. This fixed rate ISA does not require the saver to deposit savings monthly, but to receive the interest the money has to stay put for the term of the contract.
Guest post provided by Moneyexpert.com