The Little Book of Adulting by Quentin Parker

The Little Book of Adulting by Quentin Parker

Author:Quentin Parker [Parker, Quentin]
Language: eng
Format: epub
ISBN: 9781786855237
Published: 2020-05-13T15:12:21+00:00


WTF (WHERE'S THE FUNDS?)

It's useful to know what your savings are for, so you can keep that in mind if you are tempted to spend them. Having savings goals can also really help to motivate you because you're not just adding to a total, you're working to get something.

Permanent savings

Having long-standing savings is one of the best things you can do for Future You. These are 'rainy-day' savings, or to give them their proper name, 'Look, One Day You're Going to be Too Old to Work and Then What?' savings. They can also be dipped into for emergencies like exploding washing machines or unexpected home moves. A normal savings account is best for these.

Special savings

There are some things in life that need saving up for, like a deposit for a home, a new car or a big holiday. Instead of taking out big loans or credit plans, squirrel away some money. It takes longer, but there's less risk of debt. A cash ISA can be good for this, as you're unlikely to max out their limits and there are better interest rates (so, free money).

Premium Bonds

Premium Bonds are a kind of savings account that swap interest for the chance to win cash prizes. Each bond is £1 and you must buy £100 minimum to start your saving. You may withdraw your money at any time and while it is in bonds it earns no interest. However, once a month each bond is entered into a prize draw and you have the opportunity to win tax-free cash prizes, at the odds of 24,500 to 1. If inflation increases while your money is in bonds, and you don't win any prizes, you'll have lost out (this is statistically the most likely scenario). However, the cash prizes range from £25 to £1 million, so there is also the chance you'll increase your money.

Lifetime ISA

You can add up to £4,000 a year to a Lifetime ISA and the government will add a yearly 25 per cent bonus to what you put in. This will be up to £1,000 a year! However, any withdrawals come with a 25 per cent fee, unless it's to buy a house, and you can't add any more money after the age of 50. It's the perfect way to save for a house, although only use it if you won't need to access that money for any other reason.



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