How to ditch your daily coffee fix and boost your savings
Many of us enjoy a coffee to kick-start the day, but the costs of a takeaway hot drink can soon add up.
You might think spending £2.50 a day in your favourite coffee shop five times a week is a small price to pay, but that’s £50 a month you could put into a stocks and shares ISA where you could see some real results.
In fact, in just five years, you could be looking at a pot worth £3,307.61. After ten years this could increase to £7,303.68 and with 15 years under your belt, that’s £12,131.51. Just think how much coffee you could buy with all that interest.
To encourage people to start a simple savings plan, researchers at Fidelity have developed the ‘ISA cappuccino plan’. It’s not just about trading a flat white for a home-brew; it’s about recognising where you could make small changes to save some money.
You don’t have to have a lump sum to start up an ISA. By depositing cash little and often into an ISA you can build up a pot of money in a relatively short space of time that can generate you some interest.
This approach will also mean that you benefit from a process known as pound-cost averaging; where you automatically buy more units in your investments when prices are low. The benefit is that you will be cushioning your ISA portfolio against dips in the stock market by buying a variety of prices and spreading your ongoing investments over time.
Consider where you might be frittering away any disposable cash. If you’re not a coffee fan, it might be that you buy your lunch every day or enjoy a nightly pint at the pub after work. You could save £100 a month by preparing your lunch at home, or £30 a month by opting for a soft drink instead. The earlier you get started with your simple monthly savings plan, the better the results will be. Good luck!
For more information on how to make the most of your savings, or to arrange an appointment, call 01246 560570 or email us.