“Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time” – Johann Wolfgang von Goethe
Despite the fact that money is one of the most important driving factors in our everyday fast paced life, we tend to neglect it, especially when it comes to personal finances. Maybe it is the illusion of earning a paycheck at the end of every month that keeps us happy in the thought that we are earning money so the rest should take care of itself in due time.
Well the sad truth of it all is that it won’t. In fact if you don’t act right now, chances are you never will and a couple of years before you’re heading into retirement, your personal finances would be in tatters and you’d be left wondering where all the money that you had saved up over all these years has gone!
That is exactly the kind of situation we want to save you from. And today’s 5 tips will help you to regain control of your finances so that you can make the most out of your savings.
1. Claiming Back Tax Refunds For Your Pension Payments
Everyone has to pay a certain amount of money as income tax but did you know that you are eligible to receive upto 25% of your basic contributions as a tax top up? This means that if you are going to invest £1000 into your pension funds, you can receive up to a total of £250 as a top up from the HM Revenue & Customs Department. In fact if you fall into a higher rate tax payer or additional rate taxpayer groups, your percentage jumps up to 40 and 45% respectively. You can also stand to gain more tax relief by filling out the Self Assessment Tax return and submitting it within the due date. The date for 2019 has already passed but you can start preparing right now for the next year!
2. Rethink Your Investment Strategy
Most people tend to start off with a savings account at a particular bank and then not pay attention to it at all for years maybe even decades. But most banks out there offer meager interest rates especially in savings accounts so always be on the lookout for good investment opportunities. Opting for something like a stocks and shares ISA is a really sound investment strategy as it provides you with the necessary financial security while helping your money grow much faster than it traditionally would while laying dormant in a bank account. Other than that, it is always a good idea to check out the stock market and invest in a diverse portfolio for the most optimum returns on your investments.
3. Draw up a Personal Budget
This one may sound simplistic but in reality a good budget is one of the best ways to bring order to your financial life. Many of us are victims of overspending simply because we don’t have an overview of our total monthly expenditures as a whole! There are multiple smartphone apps as well as websites that can help you create a budget but the most important thing to remember here is to be diligent and keep up with the budget for at least a few months before you expect results to appear and your savings to increase.
Dealing with personal finances maybe a chore to some but in the end it is something that all of must dedicate some amount of time to for without true financial freedom, one can never really stop working!