It may come as somewhat of a surprise to learn that a considerable percentage of US adults don’t consider their savings a priority.
Even more surprising is that those who do save admit to knowing very little about the details of their savings accounts, such as interest rates, minimum balance, the number of withdrawals permitted before your account is penalised and so forth.
It’s all well and good putting a little bit of money away into an account every month after being paid, but if you don’t know how effective your savings account is there’s a good chance you’re not receiving the kind of return that you could be.
Today we’re going to look at five tips you can implement today to get your savings working harder for you in future.
This simple little word is enough to send a lot of savers into a cold sweat. It brings with it images of well-dressed men and women on financial TV shows talking in a language that most people don’t understand.
Trust me, it doesn’t have to be that way.
Diversifying your savings is relatively straightforward when you get the hang of it. All it takes is a little bit of time, which will result in a higher financial reward.
Most people have a single savings account, which is fine if you do not want your money to work for you. If you want to get that extra bang for your buck you have to look at diversifying your savings portfolio.
What this means, in very simple terms, is that rather than only putting your money into one low-interest savings account you invest it in various assets over a variety of sectors. This approach will allow you to vary the risk you take according to your circumstances, and will also spread that risk out.
I’m not going to lie to you, it will take a little research and some homework on your part, but nothing in life comes free, right?
Take some time to gain the knowledge today, and you’ll be all the more thankful for it when your retirement day comes.
Adjust your contribution regularly
Most of us have that workplace pension plan that takes a certain dollar amount from our pay every month, and those plans are certainly valuable in the long-term.
What most of us do though is sign up, choose a monthly figure to contribute, and then we forget about it.
As the years pass we get that promotion, enjoy that pay rise and yet we’re still contributing that initial amount to our pension scheme.
Take some time out of your schedule every year (having it coincide with tax season usually helps) to assess what you’re paying into your pension, and have a look at how your finances have changed over the past year.
If you can afford to pay more, then bump up that contribution!
Have a plan
Most important of all is to have a plan. Don’t just pluck a number out of thin air and contribute that amount to your pension on a monthly basis, do the math and figure out as best you can what you’ll need to live on come retirement.
If you have some sort of ballpark number that you want to retire with you’ll find it a whole lot easier to assess your current savings plan and how you want to approach it over the coming decades. This will also allow you to work out the level of risk you may want to take when diversifying your savings across different financial products and services.
These three tips should help put you on the right path when it comes to your savings, or at least should get you thinking about ways in which to improve your chances of retiring to a lifestyle that you want.
Here at Ria Money Transfer, we are always looking for ways to ensure that our customers are able to transfer money to family and friends with the minimum of hassle and in as cost-effective a manner as possible.
Get in touch today for advice on making that international money transfer to your friends and family back home.