Over longer periods of time (five years or more), investments, such as stocks, shares and funds, have the potential to give you higher returns compared to cash savings. But the value of investments can fall as well as rise. There is a chance you may get back less than you put in. Eligibility criteria, fees and charges apply. Tax reliefs referred to are under current law and availability depends on your circumstances.
Overlay
Investments
Five money tips to take into 2025
1. Building your emergency savings
It’s important to have savings, or an emergency fund, for when life doesn’t go the way you planned it. Your car could break down or your boiler starts playing up, and you could be faced with a hefty, unexpected bill.
Building your emergency fund – by saving little and often – could help you be better prepared for when something unexpected pops up.
2. Where should your money go?
If you’re not sure how much money you should be spending or saving away each month, the 50-30-20 rule is a helpful budgeting method. It’s a guide as to how much of your monthly income should be allocated across your needs, wants and savings.
1. 50% - Needs
Half of your monthly income is used for your needs. This covers your essentials from your mortgage or rent to your regular food shop.
2. 30% - Wants
This is what you spend your money on after your essential bills like dining out or trips away.
3. 20% - Savings
What you have left gets saved away. This could either be towards your emergency savings or investments.
3. Save into your pension
While retirement might feel like a long time away, getting your pension sorted now could significantly benefit your future. The state pension for most people isn’t enough to retire on, and so it’s important to review the plan you do have to help you towards your dream retirement.
You could have a workplace pension from your current employer which part of your salary is paid directly into. Reviewing this pension could help you get an idea of whether you are on track for the retirement you want. You might also have several pensions from previous jobs. Reviewing these pensions and considering bringing them together into a single combined pension pot could also give you a clearer view.
Another benefit of a pension is tax relief. This is where the government adds money on top of what you put into your pension.
4. Pay off your debts
Before considering investing, it’s worth focusing on paying off any credit card bills or debts first. The interest on your debt is likely to be higher than the potential returns on your investments. So this could result in you being in debt for longer if you’re putting any of your extra cash elsewhere.
By prioritising your debt, you might be able to pay it off faster and not have to spend as much on interest. That way you could start saving and investing, making the most of its potential returns, without having to worry about how much of your credit cards or debts you still need to pay off.
5. You could make your money work harder
Once you’ve got a comfortable enough emergency fund, you could then start thinking about putting your money to work. Investing your extra cash could give your money the opportunity to grow further over the long term. This could help achieve your goals for the future.
With NatWest Invest, start investing quickly and simply. Whether you’re an experienced investor or taking your first steps, we’ve made it easy to get started. You could even start off by getting in the habit of putting away small amounts of money each month or invest a one-off lump sum.