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Life can be pretty fast paced for many of us. We’re all guilty of taking shortcuts or looking for life hacks to save some time in the short-term, but does it always benefit us in the longer-term? We’ve found in recent months from our customers that the cost of living crisis is leading to a growing concern around their finances. A great way to feel more confident in how you manage your money, and avoid the trap of financial avoidance, is to stay in control.
How? Read our top five tips of common banking mistakes to avoid. Small details to keep track of that can have a big impact on your finances.
Keeping all of your money in a current account could mean missing out on savings perks. The majority of current accounts don’t pay interest, meaning any surplus money in your current account, which isn’t part of your regular outgoings isn’t being put to work. It means you could be limiting the growth of your funds, which could impact your ability to achieve your financial goals.
Opening a savings account is a great way to maximise the value of your funds. Have a look at the different types of savings accounts available to find one that works with your financial circumstances. Keep in mind that you don’t have to stay with the same bank for all of your accounts, and by shopping around for the best interest rate and term, you can find the right savings account for you and your money.
Leaving your money in one savings account without staying updated on interest rates could cause you to miss out on additional savings.
By keeping an eye on the interest rates of other savings accounts, you could find one that allows your money to generate even higher returns. This proactive approach might even mean that you can reach your financial goals faster than originally expected.
If you have savings in an easy access or no-notice savings account, it could be worth checking around regularly for better savings interest rates, or, if you don’t need to access a lump sum, longer term savings accounts often offer better interest than easy access or no notice savings accounts. Find out what works best for you before you move your cash.
Having easy access to your savings can be convenient, especially if there is an emergency. However, if you’ve a longer term savings goal, having quick access can make it a bit too easy to dip into it for non-essential items. You could find yourself spending a large amount of money on spur-of-the-moment purchase instead of keeping your savings goal a priority.
If you’re saving towards a wedding, a holiday, a house deposit, locking your money away could be the best option financially for you. ISAs and a fixed rate bonds savings accounts offer a predetermined length time to lock your savings away and in many cases, the longer period you choose, the higher the interest rate. Meaning the longer you save, the more you save. By putting away your funds for a predetermined period, whether that's 1 year, 2 years, 3 years, or even 5 years, you can get your savings back on track. It’s not only a good way to put a stop to your impulse spending, but it also means you have a fixed return in mind.
Account fees can quickly add up. If your bank charges maintenance fees, overdraft fees, insufficient funds fees and stop payment fees, you could notice a significant decrease in the funds you have available for everyday financial needs and long term financial goals.
However, the good news is that the majority of these fees can be avoided. There are a number of savings accounts with limited fees, that have been designed to protect your financial stability. By exploring these options, you can effectively safeguard your finances and work towards your goals.
If you find your continually paying overdraft, late payment or credit card interest fees – it might be with sitting down and looking at some budgeting options which can really help manage spending and reduce these types of fees as well as debt.
Opening your savings account with the same provider as your current account often seems like the easy option, but it’s easier than you think to open a savings account with an online bank like Hodge, and be benefiting from better savings rates and customer service. Not to mention the added convenience that comes with online banks. Whether you want to check balances or transfer money, you can quickly and easily manage your finances online.
Be a savvy saver and shop around for alternative lenders that can offer you better financial rewards.
At Hodge, we don’t want to see you making banking mistakes. That’s why we have a range of savings account options such as fixed rate bonds and cash ISAs to help you reach your financial goals and gain financial control. Explore our savings options.
Still need some more information about the best savings accounts for you? Find more in some more of our popular and informative blogs: What type of savings account do I need?, How to get the most out of my savings? and Our guide to saving and managing money for young adults.
This article is correct at time of publishing and for general information purposes only. We recommend you speak to a professional financial adviser for advice. You can find a financial adviser and further personal finance information at unbiased.co.uk.
