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Posts Tagged ‘savings accounts’

Speaking from experience I can say it’s all too easy to deny the financial issues to yourself but they will not go away. They won’t. The economic downturn is not over yet so if you’ve not prepared it’s not too late but you need to start now.

Accumulate funds for emergency savings. It is important to save money in an emergency savings fund where you have immediate and penalty-free access. It is advisable to build up rainy-day savings accounts to a level worth about three months of regular living expenses. The best place to park this money would be in a high interest savings account.

Increase Your Savings. Try to arrange for an automatic savings plan. This arrangement enables you to set aside specific amounts of cash automatically transferred from a checking account to savings accounts earning high interest or to a mutual fund of your choice. A high interest savings account should be used but you should choose one with easy access. A retirement fund will not do it because this is money you won’t need for quite a while.

Spend less. An obvious suggestion but it can seem difficult to achieve. Bundle your cell and landline phones together to save money. You can get discounts from telecommunications carriers this way. You should compare the deals on the market to get the best value deal. Cut spending on your weekly grocery bill by choosing supermarket own label brands, going to markets or joining a local food co-op. Bum rides in a car pool or take public transport instead. If you have two cars and one is seldom used, consider selling the other one. Put all the money you save in a high interest savings account intended for the rainy days.

Lower your credit card debts. Tough times mean you must make every penny go a long way. It does not make sense to shell out your hard-earned money to pay 17 per cent (or whatever) interest on debt from credit cards. Try to pay off in full the balance due each month; if that is difficult, at least pay much more than the minimum amount. Consider moving from credit to debit cards

Increase household income. During a recession this can be difficult. But you can invest some of your time in your skills and make additional money doing it. If you have a skills such as programming or any other service people may require then you could offer your services as a freelancer online or in your local area. In single income households the partner could try and take on casual or one off jobs for extra income. You could start a small business which might blossom into something bigger once the recession is over.

Make use of allowable tax deductions. Be on the lookout for tax deductible expenses such as education, charitable donations and your home office. Be religious about keeping every related receipt, so you can use these to support tax deduction claims. Put the money saved on personal tax deductions into your high interest savings account.

Spruce up your résumé. Recessions can lead to more layoffs. It is best to polish the résumé to make it current, in case the need to apply for a new job arises. Try and get the resume down to one or two pages to keep it to the point. Make it presentable, but not flashy. Your relevant work experience should stand out.

Don’t wait for the crisis to hit you, get yourself ready now. This will give you a strong sense of purpose even as it shores up your position.

Saving money takes time and discipline, but with the right strategy and a good savings account you can reach your savings goals a lot faster than you might think.

Many of the good things in life cost money and saving for big items like cars, boats, or even houses, can take months or years. However, with the proper planning and by creating savings goals you might be making that dream purchase a lot sooner than you think.

Before you begin to plan your saving strategy, you should open a high interest savings account if you don’t already have one. This will allow you to keep your savings completely separate from the rest of your money and will pay a higher interest rate. Also, if you are willing to leave the money untouched for a certain number of months, or even years, you should be able to get an even better interest rate. There are plenty of savings accounts available, so shop around for one with good interest rates and low fees.

When you have found a good savings account you can start plotting some goals. As with much in life, it all comes down to time and money – how much you want to save and when you want to have it by. There are plenty of savings goals calculators online that will tell you how much you need to put away each month.

Do not overstretch yourself. If necessary, establish a longer timeframe so you can save without putting yourself under too much pressure. Alternatively, you could take a detailed look at your personal spending to see how you can save money here and there. Ask yourself if there are some everyday items or expenses that you could live without in order to hit your savings goals faster?

The best thing to do now is create a household budget to get a good idea of all your typical ingoings and outgoings each month. It is better to over-estimate here to make sure you have enough to live comfortably. If you find you have money left over each month you can easily deposit to your savings account.

After you complete your goals and work out the amount your going to need to save each month to hit those goals on time there are some tips make things as easy as possible. First, you should arrange regular auto-deposits into your savings account from your checking account as soon as you are paid. Another option is to ask your employer if they can split your salary payments to some of your pay goes direct to your savings account each paycheck. This will reduce the temptation to spend and get your money working for you in your savings account as early as possible.

If you can do so it is critical to avoid debt wherever you can. If you have longer term, larger loans then you will just have to factor that into your budget. However, any new debt, and especially debt from credit cards, should be avoided at all costs. Attempting to save while trying to tackle an expensive credit card debt is like taking one step forward and two steps back.

When you start out your goals might seem a long way away but with some commitment those goals can be reached. For longer-term savings goals you may find that your circumstances change during the process and you can save the money even faster than expected.

Article by Richard from Click 4 savings comparison group of sites which compare products including. Visitors can compare products including ANZ Online Saver and then apply online with the bank.

Let’s face it – the economy is putting a strain on quite a bit of families. More people live paycheck to paycheck than ever before. More people are looking for money saving tips in order to keep their household in survival mode. We’ve all been at a point in our life in which we need to find ways to cut expenses and live more frugally. It isn’t always easy to make changes and put a few extra bucks into our pockets, but every little bit of savings helps – no matter how minor it may be as every extra dollar we can send to our savings account helps.

Savings accounts are the most common form of bank account that people have and they do help you to save money. You can get a savings account from when you are a young child, and they are a good account for those who wish to save their money. Savings accounts are recommended for children, and sometimes parents will give their children a ‘dollar a week’ or so to put into a savings account. Many primary and high schools will have banking systems to introduce children to saving money, and they will use a savings account. This is a good way for children to understand the idea of money and saving.

Some other money saving tips will include how things operate in your household. Do you leave a light on when you leave the room? Do you let the TV on for background noise? Do you run the dishwasher or washing machine when there isn’t very much in it? All of those things use electricity. Turning a light out or the TV off may not save you lots each month, but you will see a decrease in your electric bill. Electricity rates are always on the rise, so if you can find some money saving tips that decrease your electric bill, the more power to you. Instead of running a fan in your room, open a window a bit wider. When going on vacation, put timers on your lights instead of leaving a few on the entire time that you are away.

Some of the best money saving tips include coupons and looking for discounts. Cutting out coupons can save you quite a bit of money each week. The more coupons that you are able to find and use, the more you save. You may find yourself saving $10 or more on your grocery bills.

Despite the negative effects caused by the financial crisis, one financial commentator has took a more optimistic view after expressing hope that it will may have acted as a reminder of the need to save money, and encouraged people to take more notice of their financial status.

Although the ongoing economic downturn continues to have a negative effect on many Britons, one financial expert has expressed hopes that it may encourage people to take a more prudent view towards money management.

Laith Khalaf, pensions analyst for Hargreaves Lansdown, states that although the recession means that many are suffering from pay cuts or freezes or even losing their jobs as well, as focusing on paying down debts – which could include those accrued on credit cards – it will hopefully act as a reminder of the need to have an adequate amount of money set aside into a savings account.

"Hopefully one of the good things that will come out of the current climate is that people do realise that they need to save more and that they don't simply spend their money," he states, adding that consumers should be aware of the pressing need to put cash away not only for a rainy day but also for their retirement.

Mr Khalaf goes on claim that at the beginning of 2008, the country's household savings ratio was at the lowest point seen for around half a century.

Since then, there has been an increase recorded in the amount set aside, which has been described as "an encouraging sign" by pension experts.

"As more money flows to people as we hopefully recover from the recession my hope is people will start to save more," he added.

Indeed, he states that it is crucial the Brits make adequate provisions when planning financially for retirement. Whether a bank account, cash ISA, pension pot or some other form of financial vehicle is used he states that it is “somewhat secondary” to the overall underlying need for putting money away for retirement.

It has been reported that 12 million people have yet to start saving towards retirement, with half of these claiming that any surplus funds were used up on everyday expenses. The study, carried out by a Lincoln Financial Group highlighted the importance of saving.

Are you the type of person who is a savvy money manager?Or, are you normally struggling to scrape by till your next paycheck? If you fall under the latter category, now is as good a time as any to open a savings account for yourself and seriously start saving money.

You don’t know if unexpected expenses lay ahead so it is smart thinking to set up a high yield account. This is a secure way of saving money in a bank, with the added bonus of earning a particular percentage of interest for the amount that you will deposit.

Saving Money 101: Taking Control of Your Spending with a Spending Diary

If you’re like the average person, there would be a lot of instances when, after withdrawing $100 from the ATM machine, you will wonder where all the money went about a day later.

This normally happens when your not keeping a good track on your spending patterns. This is not a good practice at all, especially if you seriously wish to start saving money by actually adding funds to that savings account which you opened a year or so ago.

So what’s the best way that you can use to get a head start with saving money? You can do it the old-fashioned way: by creating a spending diary, keeping track of your spending habits and adding money to your savings account so that you can start saving money.

In a nutshell, a spending diary allows you to track where you money has been spent and allow you to see where improvements and cut backs can be made to save money. Going back to the example mentioned earlier – if you did take out $100 from your savings account through an ATM machine, you will see where that amount actually went.

After withdrawing the money, write down on your spending diary which items you bought with that $100. Did you spend the money on a newspaper or morning coffee while heading to work? Did you use it to buy food? Or did you have an ‘attack’ on your conscience and you actually put that amount towards your savings account?

If you’re spending money via a debit card instead of cash then you can double check your spending by viewing your bank statements with online banking.

Once you have developed the habit of writing down on your spending diary the ins and outs of your finances, you will be able to see which aspects of your spending you can actually cut back on. If you see that you’re spending too much on eating breakfast outside of the house on your way to work, you may want to pack a hearty sandwich for yourself. Better yet, wake up earlier and enjoy the financial and health benefits of eating a nutritious breakfast at home.
Once you stop wasting money on items you don’t require you will find your savings can start to grow at a rate faster than you expected. This way, you will be able to determine which purchases are wasteful and which ones should be once-in-a-while indulgences.

In addition, your savings account will be given a boost because the money that you will be able to save from the unnecessary purchases can go towards saving money instead. It might be a bit tedious and difficult at first to keep a spending diary. However, once you have gotten used to the notion of keeping tabs of your spending, saving money will be much more instinctive and less of a burden or a chore for you.

Article by Richard Greenwood who runs a number of sites to help people compare credit cards and other financial products and then make an application online.

The BBC recently commissioned a survey to gather data on a number of adults to determine whether the participants were contributing to a pension. The results from the survey suggested that around half of all adults aged between 20 and 60 do not have a pension scheme.

The survey of 1,358 people by GfK NOP – a leading market research and consumer insight agency, suggests the situation was worst among under 30s, with around 1 in 3 – 36% putting anything aside towards pension schemes or savings accounts.

Many young people cannot afford to make contributions, with a number trading it with paying off debts such as credit cards or loans.

The survey indicates that 45 percent of people aged between 41 and 60 have no pension plan.

This is due to a number of reasons, which include the high level of unemployment caused by redundancies influenced by the current economic climate, and also because of the high numbers of women that never joined a pension plan and left full time employment to raise a child.

Many of the younger age group among the participants claimed that the reason they had never acted on setting up a pension was due to not being made aware of their options in regards to getting one set up, or were not willing to think about their future just yet as it seemed to be an age away.

Although 36 percent of those aged under 30 that took part in the survey had a pension, almost 50 percent said that they felt confident they would be able to have a comfortable retirement.

Chief executive Ed Gardner of UK retirement and savings at pension and insurance firm Metlife, said young people should not presume that this would be the case. The days of generous final salary pension schemes are becoming less frequently available, which is likely to cause this new generation of pension planners to rely on defined contribution pension schemes, which tend to provide lower returns.

“Unfortunately the tide has turned and younger people face even more challenges in saving for their retirement” said Mr Gardner.

People should work out how much money they will need to save in order to retire by 65 and have enough to last for 25 years or so.

“What you will find is that many people are currently saving nowhere near enough,” Mr Gardner said.

Pension experts have revealed that the scheme set up to protect final salary pensions could be in trouble.

With the recent increase in pension shortfalls, the Pension Protection Fund (PPF) is in danger of being submerged from high volumes of claims being made as a result of the credit crunch.

According to the findings, up to 91% of final salary schemes can’t afford to pay out benefits, with the under-funded schemes carrying deficits of more than £228 billion.

The PPF takes around £700 million from companies every year, but this has proved too little and doesn’t cover its liabilities. The PPF has a deficit of around £550 million.

The PPF has already carried the weight of 62 schemes that failed, which include Woolworths, and Lehman Brothers.

There are now growing concerns that further failed schemes will result in the PPF to collapse, leaving future companies at risk of bankruptcy vulnerable to loss of employee pensions.

The government has been called on by The National Association of Pension Funds to back the scheme and act as a safety net, but the government has yet to comment.

NAPF Chief Executive, Joanne Segars, said: “In these exceptional times, maintaining confidence and security in pensions is vital so it would be a sensible measure for the Government to be the ultimate guarantor of the Pension Protection Fund.”

Vince Cable, Treasury spokesman for the Party, said: “I get a very strong sense that this is the Titanic hitting the iceberg. It is potentially very vulnerable in a serious recession, which is what we are now getting into. Companies won’t be able to sustain the fund in its present form. The Government has to be explicit that it is standing behind it.”

The possible issues were identified following a survey conducted by Punter Southall, revealing that 60 percent of pension schemes are oblivious of how their funding is being affected by the recession.

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Many people associate 'Saving' with being out of pocket and struggling to continue with their current life-style, but this does not necessarily have to be true, as it is very possible to save large sums of money in a short space of time, without having to make any major sacrifices.

You will obviously have to make some changes to your spending habits, but these could be discreet things that you may not even miss, allowing you to hold onto the things you enjoy in life, while encouraging your savings to grow faster. Another important factor is choosing the right savings accounts to provide you with the best returns on your savings, with high interest rates and low account keeping fees.

Savers tend to fail when setting unrealistic targets, leaving them short of cash in the short term resulting in them eating into what has been 'saved'. it is important to budget your money by making a list of your incomings and outgoings, but you must make sure your plan is sustainable, as planning to save anything left after your outgoings can to be unrealistic, because life tends to be full of things we didn't plan for. There may be luxurys that you don’t mind going without with to speed up your saving power, but don’t avoid paying bills such as credit cards or telephone bills in an attempt to boost your savings, as this may result in you ending up much worse off in the long-run.

You have a better chance of succeeding if you have a goal that you can head towards, offering a reward at the end of your hard work. If you are looking to save money fast, the chances are that you do have a reason, or goal, so focus on this as your target and you are more likely to stick to your saving plan.

These goal will now be the backbone of your savings journey; the next step is to find the right savings account to help you reach these goals. One affective saving engine that many people use are term deposits and other similar investment options, but these are more suited for a longer term savings plan and tend not to offer a quick money saving solution.

It is very easy to find a great online savings accounts offering low fees and competitive rates, especially when choosing to bank online as opposed to in branch, as these accounts tend to have less overheads to pay out. An effective technique for ensuring you stick to your savings plan is by setting up a transfer from the account your salary is paid into, to your savings account as soon as you are paid. This will allow you to stick to your savings plan without fail, and it is easier to budget your outgoings around your remaining money without having to think about what you need to save.

Once your balance begins to increase through interest paid on your balance, it should provide you with the motivation you need to follow your savings journey through to the end. It will also show that your goals can be turned into reality quickly and easily, giving you the faith to pursue future saving plans. You will soon find that you are fast approaching your goal milestones which will give you further encouragement to start save more and spend less.

Saving money faster is much easier to achieve when using the right savings account to not only provide the best returns on your savings, but also to suit your situation and requirements to reach financial success. A significant factor in turning your saving goals into a success is to make a clear list of realistic sub-goals, allowing you to reach these targets and be motivated to follow through through your fast growing balance. Upon reaching your savings goal, you may realise that you were happy with your current life-style, giving you the opportunity to begin stashing cash away ever month, maybe towards a new goal, or even your future.

The last few months have been devastating to the the UK's economy, which has affected us all in one way or another. Unemployment recently hit 1.92 million between September and November 2008 – the highest level since 1997.

As the unemployment rate continues to rise, you yourself, or someone you know may have been affected. There are a number of steps that can be followed to place you in the best position in terms of both employability and financially.

Losing your job can be extremely distressing, but it is important not to panic.

The first thing you should do is to make a visit to your local job centre. As well as increasing your chances of finding a job, this will also help you to find out exactly what benefits you’re entitled to.

If you require any kind of technical or legal advice, make an appointment with your local Citizen Advice Bureau.

You may be offered redundancy counselling, which is designed to help you deal with this change, as well as offering support with getting your life back on track. This can be anything from helping you to make the first steps to find a new job, to providing financial advice.

You may think you are strong enough to deal with losing a job on your own, but doing anything towards getting yourself back on track both emotionally and through finding work, is a step in the right direction and is always recommended.

You could be entitled to a redundancy package. Always make sure you understand your rights as an employee, so read through your employment contract. By law, employers must give employees notice before mading them redundant. This tends to be at least 1 week for every year of service, up to a maximum of 12 weeks.

If you completed two or more years service for the company that made you redundant, you qualify  for a statutory redundancy payment, which can be calculated by half a weeks pay per year of service for those aged between 18 and 21, a full week between 22 and 41, and anyone aged 42 and over is entitled to 1.5 weeks per year of employment, to a maximum of 20 years. Unfortunately for high earners, the weekly payment has been capped at £350.

Beyond this statutory pay, some firms offer additional packages to further compensate staff they have to let go. This is usually calculated by multiplying one months salary by the number of years service completed, with the first £30,000 tax free. Anything above this amount is subject to your tax band, so anyone that earns below £34,800 will be on the lower rate of 20%, and anyone above this amount will be on the higher tax band of 40%.

If you earn more than £34,800, there are certain measures you can follow to ensure you don't pay more tax than you need to. Ask your company to hold the payment back until they have issued you with your P45 as this will mean that you will only have to pay 20% of the remaining payout.

If the payment is added to you last pay check, 40% will be deducted at source. The remaining tax is usually paid in the following year's tax return.

You may find it useful to consider negotiating with your company allowing you to put yourself in the best possible financial position. For example, you could discuss the possibility of exchanging your notice period plus any holiday owed for payment.

It may be wise to consider putting these savings into your pension

You could avoid having to pay any tax on any surplus by paying your payment straight into your pension. Every year, everyone is eligible to make tax free payments into pension schemes amounting to the equivalent of a years salary.

This may be a very appealing option depending on your situation, as if you are 49 or over, you can withdrawals up to 25% of your pension without having to pay a penny to the tax-man. This is definitely worth considering if you are over the age of 50.

NOTE - As of April 2010, those aged under 55 will be unable to qualify for the 25% tax free sum.

For younger individuals, this may not be the best option, as it would involve locking your money away for many years.

If you were wise enough to take out unemployment insurance, make it a priority to find out exactly what you're entitled to.

For homeowners, redundancy can be a chilling prospect. The last few months has seen a jump in repossessions and people falling into difficulty repaying  mortgages. You may wish to consider taking out insurance to cover your mortgage should the worst happen. Ensure you understand what the insurance offers, as many providers have tightened their conditions due to the current economic climate.

To qualify for unemployment insurance, employees must not have been informed of any job cuts or voluntary redundancies, and you will not be covered if you're made redundant within 120 to 190 days of taking out the policy (depending on your provider).   

Also, check your existing insurance policies, as you may be surprised at how many products also cover redundancy.

If you find you are facing problems keeping up with mortgage repayments, the first thing you should do is contact your mortgage company. This is very important, as if you were to face repoession, the fact that you didn't keep them informed of your situation could work against you.

Many lenders are now offering between 3 and 6 month payment deferrals based on your current situation. Again, being able to prove that you are actively looking for a job will work in your favour.

Once your payment comes through, you need to know what to do with it, and for many this means finding the best savings option. Earlier we covered the option of depositinf funds to your pension, but for those that are not in a good position to lock their savings away for a number of years, it is well worth considering fixed rate bonds and ISA's, as these tend to provide higher returns than regular savings accounts.

UK Price Comparison website Which4U – Compare Credit Cards, Savings Accounts, Fixed Rate Bonds, Bank Accounts, ISAs, Loans, Mortgages, Insurance, TV & Broadband and Gas/Electric bills to find the best UK deals

According to a recent report card on poverty, those unemployed in Australia have been found to be the poorest in the developed world, with retirees living in Australia ranked as the fourth poorest.

According to The Organisation of Economic Co-operation and Development, 50% of single Australian retirees live in poverty - defined as less than 50% of average earnings. This figure has risen by 4.8% over the last ten years. Other figures also indicate that an alarming 27% of all retired people in Australia live in poverty.

One way to avoid becoming a victim of poverty is to open a high interest savings account and deposit whatever money you can afford. Those in need can then call on this as a source of financial income to keep them above the poverty line.

Families and Community Services Minister Jenny Macklin said the figures shown from the report are "shameful" and emphasized 12 years of neglect by the former Howard government.

“This is a searing indictment of the Opposition’s record in government on older Australian,” she said.

National Seniors chief Michael O'Neill said the report only reiterate what Australian pensioners already knew.

“The single pension is inadequate and needs to be increased to two thirds the rate of the couple pension,” he said.

However, the report has also revealed further figures indicating that those without a job in Australia are suffering even more than the retired, with unemployed ranked as the poorest of all developed nations.

Sydney's Welfare Rights Centre policy officer Gerard Thomas said that this was a very serious message, and that unemployment is expected to continue rising due to the global economic slowdown.

“The Government has recognised that pensioners are doing it tough but they appear to have blinkers on when it comes to understanding the real situation that unemployed people find themselves in,” he said.

The Rudd Government has introduced a $500 allowance this year in an attempt to boost pension incomes, and will be raising the telephone allowance to $132 a year.

In October 2008, the Government unveiled plans of a one-off lump sum Christmas bonus of $1,400 for single pensioners and $2,100 for couples, in an effort to increase consumer spending.

An inquiry is also under-way to increase the single pension, which currently stands at $281 a week.

The unemployed are provided with $50 a week less and they were not included in the Government’s recent economic rescue package.

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