5 Top Questions About Saving

5 Top Questions About Saving

Contributor:
Xeinadin

Date:

Share this article:

Saving is a crucial part of financial planning and it is an area that we receive a variety of questions about. Here Anne O’Doherty looks at the top 5 questions about savings that we frequently receive from clients and the answers we guide them through.

What is the difference between investing and saving?

Saving and investing are two different ways to handle your money. Saving is generally when you put a set amount of money aside on a regular basis for a particular period of time. Savings tend to be low risk, easily accessible and shorter term. Investing on the other hand is the term generally used when you have a lump sum that you can put away for a medium to long term. It is more geared towards wealth accumulation and achieving longer term financial goals.

How do I decide how much to save?

One of the most common questions we are asked is how much an individual should save each month. The answer often depends on an person’s financial situation and their goals. A general rule of thumb is to follow the 50/30/20 rule. This means allocating 50% of your income to necessities, 30% to discretionary spending, and 20% to savings and debt repayment. This 20% can be further divided into short-term savings, like an emergency fund, and long-term goals, such as retirement. This will of course vary depending on a person’s financial priorities.

Should I pay off debt before starting to save?

This is a common question especially with clients who may have high-interest debt. While we would always suggest prioritising paying off high-interest debt, we do also believe that it is important to have some money put aside that is easily accessible, in case of emergencies.  We all know how unpredictable life can be and a financial plan should include provision for an emergency fund to avoid accumulating debt should unforeseen circumstances arise. It is possible to balance debt repayment and savings by allocating a portion of your budget to both simultaneously.

What is an emergency fund?

An emergency fund is a financial safety net and is essential for handling unexpected expenses. Having savings of 3 to 6 month’s worth of living expenses put aside is a good goal. This can be done over a period of time by starting small, making this goal more achievable. Simply setting up an automatic payment to your chosen savings account can ensure that this happens.

What should I take into consideration when choosing a savings account?

There are lots of variables to consider when choosing the right account for you. The answer depends on your own specific circumstances and you need to take into account things like what your goal is, how much you will be putting aside, how long you will be doing this, how quickly you may want to be able to access the funds and of course your attitude to risk. You also don’t have to pick just one product. You may have more than one goal and find that mixing products is the best option for you.

Whether you’re just starting out with your savings journey or would like to ensure you’re on the right path, we’re here to help you. Discussing your savings and understanding the various options available to you is a critical part of any financial plan. We’ll work with you to understand how much to save, where to save, building an emergency fund, managing savings on a tight budget, and balancing debt repayment with saving can empower individuals to take control of their financial future.

Building your savings can be simple and an effective way to achieve your longer term financial goals. We’re here to help with all your questions about saving. So if you’d like to take a closer look at saving and what kind of plan is right for your circumstances, just get in touch because we know what counts.

This website uses cookies

With these cookies, we and third parties can collect information about you and your internet behaviour, both within and outside our website. Based on this, we and third parties adjust the website, our communication, and advertisements to your interests and profile. You can read more information in our cookie statement.

If you opt for acceptance, we will place all cookies. If you opt for rejection, we will only place functional and analytical cookies. You can adjust your preferences at a later time.

Accept Reject More options

This website uses cookies

With these cookies, we and third parties can collect information about you and your internet behaviour, both within and outside our website. Based on this, we and third parties adjust the website, our communication, and advertisements to your interests and profile. You can read more information in our cookie statement.

Functional cookies
Arrow down

Functional cookies are essential for the proper functioning of our website. They allow us to enable basic functions such as page navigation and access to secure areas. These cookies do not collect personal information and cannot be disabled.

Analytical cookies
Arrow down

Analytical cookies help us gain insight into how visitors use our website. We collect anonymised data about page interactions and navigation, enabling us to continuously improve our site.

Marketing cookies
Arrow down

Marketing cookies are used to track visitors when they visit different websites. The goal is to display relevant advertisements to the individual user. By allowing these cookies, you help us show you relevant content and offers.

Accept all Save