In these unpredictable and cash-strapped times it can be hard to know how to manage your finances. Many young couples will be thinking about putting money aside to buy property for the first time; while those further down the line, who are already settled with a house and children, might be looking to save money for their children’s university education. And then there’s the issue or funding your retirement – it’s no secret that state pensions in the UK aren’t all that substantial, and that to be comfortable when you’re no longer working, it pays to have money to fall back on.
So it really pays to start thinking about how you can make your money work for you as early as possible. There are a number of ways you can deploy your funds in order to make them grow, but choosing a way which works for you really depends on your personal circumstances.
Here are the main options to consider putting your money to work:
Buying shares in a company can be a good way of making your money grow. Investing in companies isn’t an elitist business any more, or something which only financial experts with five figures to spare can do. Those with just a few hundred pounds can take the plunge, and some companies even offer the option of buying shares at reduced rates to their employees, as an incentive to invest. But do be wary, and do your research – while the rewards can be potentially very high, the losses can also be extremely damaging. Buying shares is a high risk business, especially if the company you’re investing in is a fledgling, or dealing in an industry which is susceptible to decline. As an amateur investor, limit what you put in, and if you’re not sure, choose a safer place to put your money.
Property prices have fluctuated over the past few years, but investing in houses and letting them out to tenants remains a viable option for those looking to get more out of their capital. Due to rising and falling prices, buying property also comes with a certain amount of risk involved, and as an owner you would be responsible for maintaining it – which could entail further costs. But, if you already own your own home, and you’re lucky enough to have money to spare to start a mortgage on a second, buying and letting property is a good way of getting a steady return on your investment.
In the past, pension schemes have been a risky business, due to companies failing and going bust. But thanks to the new workplace pension programme set up by the government, pension plans are now a much more stable option. If you don’t have a lot of ready capital but do have a steady income, and if you’re searching for a low risk return on your saved money, then a workplace pension plan is certainly worth looking into and talking to your employer about.
Savings accounts are arguably the safest place to put your money in these unpredictable times. Depending on how much you can afford to put away each month, there are a number of varying products available on the market. If you’re looking to make life more comfortable for your children when they leave home for instance, then a Children’s ISA will undoubtedly be the best course of action.
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This article is written by Adam who works for The Childrens ISA in the UK. The company offers many services for people who those who are looking to save for their child’s future.