We’ve recently heard about an elite tool called Flagstone, which can be used by wealthy customers to maximise the amount of interest that they earn. It’s what’s known as a ‘cash savings platform’, allowing customers to save directly with a variety of different banks and lenders.
This means that people can move their money between accounts quickly and without the hassle of actually setting up a new account, making it possible to move your money into the account with the best interest rates. They can also secure more competitive rates for their customers.
Traditionally, the £250,000 minimum savings amount has acted as a barrier of entry for many, however, this year they have announced plans to reduce that amount to £50,000. This will be a lot more achievable for many, although it certainly doesn’t help the third of British people who have less than £1500 stashed away in savings, or those in between. With that in mind, we decided to look at a few other tips for managing your money in the way that wealthier people do.
- Think long term. It may be that you’re already doing this, but if not then it’s one of the most important shifts – and it’s a philosophical one. It means thinking about your money in terms of long-term growth rather than short term pleasure. For instance, if you get a pay rise then you should consider saving or investing the difference, rather than using it to push up the quality of your current lifestyle.
- Start investing. If your spare money is currently tucked away in an ISA then you could be missing out on a lot of potential ROI. Investing, when done sensibly and in a risk-aware way, can help you to grow your money far quicker than you could with a savings account. There are loads of ways to start investing, from accounts that will manage most of the hard work for you to the option of investing in start-up companies via crowdfunding. The important thing is to seek advice so that you can come up with a strategy to suit your needs.
- Pay yourself first. This popular modern mantra means putting money into your savings account straight after you’ve been paid, rather than waiting to see what money you have left at the end of the month. By treating your savings contribution as another bill to be paid before you start treating yourself, you make it a lot easier to avoid reckless spending.
It can be difficult to start capitalising on your income, especially if you’re feeling the squeeze each month. But one thing that we’ve learned from the savings tips of the wealthy is that it’s as much about mindset as how much you earn. People who think about their money in terms of the freedom, security and comfort that it can bring them in the future are likely to find it easier to delay the gratification of spending. If you can think of the money that you don’t spend now as money earned for the future, then hitting that savings goal suddenly becomes a lot easier.