Saving from the short to medium term 💪 💸 👉
People aren’t all made the same. We have different motivations, careers and lifestyles, and all this should be reflected in our savings strategies. Determine your savings goals: you may be looking to get on the property ladder (long-term goal) or book an exotic getaway (short-term goal). Tim Bennett, Partner at Killik - an investment management and financial planning firm - put together this instructive video where he discusses saving from the short to medium term.
- Short to medium term funds need to be placed somewhere that ticks the following boxes: low in price, liquidity, and default risk.
- If you’re looking to save in the short term, you should be able to have immediate access to your account - which means a lower savings rate. You can get a higher interest rate if you put your money away for longer, say, 12-24 months.
- Medium term accounts will work harder for your money and (hopefully) get you a higher return.
- The potential returns are still significantly lower than longer term options.
- It helps to identify your future cash needs in order to maximise your returns. The longer you can lock up your funds, the greater the return.
- Don’t forget about your emergency rainy day fund.
- Have you considered investing in bonds? This could be a great way to save in the medium-term. Take a look at the video for a great analysis of gilts vs. cash.
*Please note - this is not a sponsored post.*