It may seem counter intuitive, but sometimes you really do have to spend money to make money. It’s important to invest in yourself to boost your future financial success. Whether you want to start investing your cash into ISAs, squirrel away some funds into a pension packet, or try a new skill, then we’ve got you covered.
Here at MoneyMagpie, we’ve cherry picked five things you can do right now to invest in your future.
- Get Yourself a Pension
- Take Classes and Additional Courses
- Set a Savings Rule
- Invest in an Equities ISA
- Invest in Yourself
- More Money and Wellbeing Tips
You might already be stifling a yawn, but sorting out your pension is a great (and easy) way to invest in your financial future.
A State Pension is paid to everyone who pays into the National Insurance pot for 35 years. If you haven’t paid for the full 35 years, then you’ll receive a smaller State Pension.
Here at Money Magpie, we know that even the full State Pension doesn’t provide enough cash for a comfy retirement. You can check your State Pension forecast on the Government website here.
If you want to thrive in your old age, you need to start paying into a private pension pot as soon as you start earning.
First things first, opt into your workplace pension scheme. The amount you and your employer will pay, depends on your employer’s chosen scheme. If you’ve been enrolled automatically, you’ll make contributions based on your pre-tax earnings. As of April 2019, the minimum your employer can contribute is 3%, while an employees minimum contribution is 5%.
Remember! These amounts will vary based on your place of work, so check your employer’s scheme. You can also increase your pension contributions too, but ask your employer for more details.
Other pension schemes
If you’re self-employed, pension contributions are a little trickier as you have to decide the scheme that’s right for you.
As someone who is self-employed, you won’t have an employer contributing to your pension scheme. But there are some tax breaks that you shouldn’t miss out on. You’ll get a tax relief on your contributions. Most self-employed people use a personal pension pot, which means you can pick your contributions. If you’re 30 and put £100 into your pension pot every month, the Government will pay £25. This means your pension at 65 will stand at a whopping £70,000!
Remember, too, that the sooner you start paying into a pension, the smaller your contributions can be to achieve a realistic pension pot by retirement. You also benefit from compound interest – turning your pension pot into a nice tax-efficient savings vehicle!
The perks of a pension
If you’re still not convinced by a pension’s importance, then maybe these perks will change your mind.
- Pension contributions from employers are taken from your salary before your tax is deducted. This means you won’t have paid tax on your pension contributions.
- Workplace pensions include employer contributions – that’s free money!
- The Government pays tax relief on your main pension pot – that’s more free money!
- For private pensions, you’ll pay Income Tax on your earnings. But don’t fret, your pension provider will claim this tax back from the government!
- Pensions don’t count as assets towards the entitlement of a State Pension either.
Investing in yourself doesn’t always mean spending money, either. As you grow through your career (and your life), you’ll need to take on new skills to increase your financial potential.
If you fancy refreshing your CV, then learning a new language may be the way forward. The BBC has a range of free online language courses that you can start from the comfort of your own home. With 40 languages to choose from, you’re truly spoilt for choice.
If you’re not keen on spending time on your laptop or computer of an evening, then maybe you should try Duolingo. With over 300 million users, this free app is easy to use. It’s also a convenient way to build up your language skills – whenever you have a spare five minutes.
Learning a language may not appeal to you, and that’s
OK because there’s plenty more courses on the web!
First up, there’s Skillshare. This online community has thousands of courses and classes for every creative. With topics such as illustration, photography and videography, there’s a new skill on there for everyone. They even have a selection of free classes you can try, before you pay for a monthly subscription.
Another online learning platform is Knowable. These audio courses offer a bit of something for everyone including self-improvement hunters, entrepreneurs and creatives. For just over $4 a month, you can unlock hundreds of course to invest in yourself and your future.
Remember! The internet is your oyster. If there’s a skill you want to obtain you can search YouTube, podcasts apps and plain old Google. You don’t
More importantly, take classes that make you happy!
Hit the books
If you want to improve your mental health – and attitude to money – good old books are still a fantastic resource.
From learning a language (as above) to researching topics that have always interested you, there’s a book out there for everything and anything! If your bookshelves are bare, but you’re a tad broke, ask friends and family if they’ve got any books they’d lend you. Alternatively, use your local library! Many are still operating limited hours even in lockdown – and those that aren’t open still have a click-and-collect service. Libraries are great – if the book you want isn’t there, they can order it for you! The best bit is, even though it doesn’t cost YOU anything, you’re still supporting the author, as they get a tiny royalty payment for each time their book is borrowed.
One of our favourite books at the moment – that’ll help you invest in yourself AND your financial situation – is Your Money Makeover Mindset by Andi Atherton. It covers the importance of making small changes to your attitude to improve your overall finances. We can get on board with that!
One of the best ways to invest in yourself and your finances is to save.
Don’t hold yourself accountable to saving the same amount each month. You might have more outgoings one month, which could scupper your savings goal and make you feel rubbish. Instead, we recommend you get into the habit of saving.
Make a point of saving your cash when you’re paid. It’s better to put your savings aside first thing. Jasmine always says: “Pay yourself first, then pay everything else”. That way, you won’t end up spending it on something you don’t actually need. Then, at the end of the month, save whatever else you have leftover too. After all, when you take care of the pennies, the pounds will look at themselves.
Other great ways to save include:
- Creating savings pots with banks such as Monzo and Starling. On these apps, you can create several pots that have individual savings targets. So if you’re saving up for a holiday, car and a new sofa you can spread your savings across multiple pots.
- Get a debit card that rounds up your transactions. For example, if you spend £9.67 at the supermarket, then some banks will round up your transaction to the nearest pound. You’ll need up saving the odd 30p here or there and increase your savings without even thinking about it.
- Use an autosaving app, like Plum and Cleo, to save money for you. These apps work out how much you can afford to save each month, then they squirrel away this amount each month. You’ll be saving cash without evening thinking about it!
A great way to invest in yourself is to invest your cash in an equities ISA (also known as stocks and shares ISAs). These long-term investments are a great way to compliment your retirement fund.
These tax-efficient investment accounts let you put money into a range of different investments like shares, funds and trusts.
For the 2020/21 tax year, you can place up to £20,000 into an ISA. You can split this allowance across four types of ISAs too.
If you’re still not convinced, then listen to Jasmine explain why you should invest your money into an equities ISA:
Investing in yourself sometimes means saving for the bigger things – but sometimes, it means spending money to improve your overall wellbeing. That, in turn, helps you with your money management habits, too.
Insight Therapy is a fairly common form of therapeutic treatment. With Insight Therapy, a therapist works with their patient to help them understand how their past may be affecting their future. During therapy, they’ll talk about their thoughts, feelings and experiences.
To find out more about Insight Therapy, use this link here.
More useful reading
If you’ve found this article useful, then you may also like…
- Easy steps to investing with Jasmine
- Stock investment: 3 biotech stocks to consider in 2021
- Pension awareness week: make your pension a priority
- The best free and cheap online courses to keep your brain active
*This is not financial or investment advice. Remember to do your own research and speak to a professional advisor before parting with any money.