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New year, new savings resolution

pile of coinsThe best resolutions are the ones you can keep beyond this month. In this house we’ve settled for junior making his bed every day and promising to try a new food once a week. I’ve gone for money saving ones, of course. That means planning meals, trying not to use the tumble dryer too much and cutting back on the Nespresso capsules. But on a more positive note, I’ve also resolved to save more cash. I was inspired by the 365 Challenge (see here) to put money away. Basically, you start on Monday 1 January with £1, then put £2 in on the Tuesday up until Sunday when it’s £7. Then you start again on Monday. It means you’re putting away £28 a week which works out at £1,456 over a year.

But here are the downsides with this scheme. First of all, you have to be the kind of person who has lots of cash in their purse. I failed by Wednesday – I didn’t have £3 in change. I did have a tenner so bunged that in the savings bowl, which covered me for Thursday too. But it’s not for me a good idea to have notes and coins sitting around: I will only dip into it if I need cash (say, if the window cleaner calls). And this cash wouldn’t earn any interest – also it’s a bit unsafe leaving piles of notes/coins at home. So I’ve already given up on this scheme: a resolution broken within the first week of the New Year...

Perhaps a better idea would be to set up a regular payment into an account. Santander’s Regular Esaver issue 6 pays a fixed 3% on monthly savings of up to £200. You do need a Santander current account. If you’re a Santander 123 or Select customer you get 5%. Lloyds Bank Monthly saver pays 2.5% fixed on monthly savings of up to £250 and again, you need a current account with the bank If you’re a Club Lloyds customer you get 3%. I’m not sure I can manage such a commitment: but if you’re able to put aside a regular sum, it’s surely a good idea.

And if you’re in for a long-term commitment, you might be even better off putting small, regular amounts into a share Isa (or even a pension). Shares usually outperform cash deposits over time but with the stock market so high at the moment, do proceed with caution and drip in small amounts. Jane’s guide (see here) to first-time investing is invaluable.

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Saturday, 20 April 2019