With the economic forecast looking decidedly gloomy, putting money aside into savings accounts may be more of a financial fairytale than a reality given the state of the economy.
Currently household and family budgets are being hit from all sides. An increase in fuel and food costs and rising inflation combined with a VAT hike in January means that the average household income is being financially extended.
For savers that earn an income from interest on savings accounts, the fact that the base interest rate has been holding steady at 0.5% for the last 29 months means that they are also facing financial challenges. On the up side, people that are able to borrow money are benefiting from the lower interest rates.
When times are tough and budgets are taking strain, it is vital for your financial survival to take control of your money and plan for your future. This means looking at ways to reduce your debt and using savings accounts for emergency funds and high interest savings accounts for retirement and/or education funds.
If you do not already have savings accounts for future education expenses or your retirement, it would be prudent to build a savings component into your budget now. No one knows what the future holds and if you wait for the economy to pick up before opening savings accounts, you may be waiting longer than you can afford.
As with any other purchase, it pays to shop around for high interest savings accounts that offer the most competitive interest rates. Most banks and building societies offer online savings accounts also called internet savings accounts that make it easier for you to manage your money and keep track of interest rates. By saving a little today in high interest savings accounts, you can look forward to a brighter financial future tomorrow.