I am by no means a money saving expert, in fact I can sometimes be a little naughty splashing money onto a credit card every now and again to purchase a really "must have" gadget. However most of the time I like to make credit cards work for me as per my last article Making money off your credit card using 0% cards.
One of the things that gets me when I talk to younger (and some of my older) friends is what they do with their savings. There seems to be a common theme that goes a long the lines of "Oh I don't earn enough money to worry about a proper savings account". These very same people will have a standard savings account you get from your high street bank which pays a very low rate of interest and on top of that the bank will also be paying the Inland Revenue tax on your behalf off the interest before you get it. While at the same time that so called "paltry" amount could be placed inside a MINI cash ISA and be earning 5% interest tax free!
When I explain the above there is still a reluctance as they seem to think an ISA is some kind of a special shares thing they need to sign up for. Its only when I explain that just about anyone can open an ISA account and that it can be treated as just a normal bank account except for the following rules.
- You can only deposit £3,000 in a cash ISA each year
- If you saved £1,000 and then withdrew it you would only be able to put £2,000 back into that ISA within the tax year.
- If you have £3,000 in your cash ISA by the end of the financial year you can place a further £3,000 when you get to the next tax year.
I don't think enough people make use of these convenient financial products.
For more financial tips take a look at Money Saving Expert