Whether you’re young and just beginning your career or you’re approaching retirement, it’s always a good time to start thinking about your financial future. You might not think you have enough money to start saving for your future, but any amount of money can help, however big or small. So why exactly is it so important to save for your financial future?
Why it’s so important to save for your financial future
Nobody ever knows what’s going to happen. You might feel secure in your job and have a steady income right now, but unforeseen circumstances such as redundancies can always occur. If you unexpectedly lose your job, it’s important to have a safety net to fall back on. This will help to tide you over until you find a new opportunity, and that’s where savings come in. Regularly putting part of your income aside in a savings account is a great way to get some peace of mind. It also helps you to prepare for the unexpected.
How much to save for your financial future
Saving money will also benefit you when it comes to retirement. If you work within a UK company, the chances are that your workplace already has you enrolled in a pension scheme. Many workplace pension schemes can help you retire with an attractive sum of money. However, combining this with your own personal savings account is often the best strategy.
Lifetime ISA’s are a popular way to save for retirement. With these, the government provides a 25% bonus on your savings contributions. This means that if you were to put the maximum amount into your account each year… You’d receive a £1,000 bonus every 12 months.
When to start to save for your financial future
One of the most important things to remember when it comes to saving is, “the sooner the better”. The earlier you start saving money, the more interest you will gain. This is why saving money while you’re young is so vital. If you find it hard to save for your financial future, think of things you can do to simplify the process. This could mean setting up a direct debit with a small sum of money to leave your account each month. This option will make you less likely to notice the money leaving your account.
Predicted Retirement Income
While these strategies are all well and good, the reality is… The higher your income, the more money you’ll be able to save and the better your financial future will look. You can check your likely retirement income with pension calculators. These use your current salary, date of birth and gender to predict the yearly income you should have once retired. If this doesn’t fit your financial goals for the future, it’s worth thinking about ways to boost your income as a whole.
One popular way to do this is with investing, and property investment is the perfect route to take. When done properly and with the right know-how, property investment can boost your income dramatically. Certain UK cities like Manchester and Liverpool provide a lot of potential for return on investment and capital growth. Companies like RW Invest, for instance, offer opportunities with rental yields as high as 7 and 8%. By investing and generating money on top of your monthly income, you’ll be able to save larger amounts which will help as a rainy day fund or go towards your retirement.
Finally, I hope this post has been useful. Check out more of my finance posts here.