Saving and investing money from home in 2020

*Collaborative Post

Whether you have money burning in your back pocket or are starting to feel a pre-Christmas pinch, we all want to know the best way to handle our hard-earned cash.

With lockdown two in full effect and redundancies high, people more than ever are struggling with the best ways to deal with their incomes. Should I save for a rainy day? Should I invest what I’ve already got? If I want to invest, where do I start? All these questions are completely normal and surprisingly they have far easier answers than you may expect.

How to save

For starters let’s clarify exactly what is meant by saving and investing.  Saving is the idea of putting money away a little bit at a time. You may want to save for something specific, and with Christmas around the corner you may be trying to figure out how best to turn your weekly wage into a magical Christmas for you and your little ones. Maybe you are eyeing up a holiday, a house, or maybe you want to be fully prepared for all the uncertainty yet to come from Covid-19.

Whatever your predicament, the Money Advice Service recommends setting up an emergency savings fund. The general aim is to have three months’ worth of living expenses bottled up in a handy and easy to access savings account. Ideally, you should aim to include the cost for food, rent or mortgage payments and any school fees your little ones may require. Of course, saving isn’t just a quick fix, and it may be a good idea to start putting away some percentage of your monthly income – as much as you can afford.

For the best easy-access savings accounts, the Money Saving Expert recommends Atom Bank. It has no minimum deposit and pays the top interest rate of 0.75%- the only downside being you need to open your account using its smartphone app.

Is Investing in stocks the way to do it?

If you have your finances in check and are looking to make more money, investing may be the route for you. Investing is the idea of putting your money into something, like stocks or property, and hopefully increasing the amount of money you get out.

If you’ve considered going down this route before, chances are you’ve considered the stock market. Getting into the stock market allows you the chance to own a piece of a company. From Amazon to Apple, Morrisons shares and other huge companies are on the stock market. You can buy multiple shares in each, given you’ve got the money to spare, and then sell them on at a later date if the price goes up. But the key word is ‘if’. Prices can fluctuate constantly, and you may lose your investment in the short term.

Buy to let property investment a safer bet

For a more secure investment, you may fancy the idea of buy to let property.

If you’re new to the world of buy to let investing, it refers to the idea of buying a house or flat with the view of letting it out to a tenant.

Despite Covid-19 rocking industries across the globe, the UK rental market has remained strong and steady. UK rental prices have increased over lockdown, with housing company Rightmove reporting a 3.4% growth compared to 2019. The asking rent outside of London has now hit a record £845, meaning there will be more money for your pocket.

You can also be assured you are putting your money into a safe industry. The price of UK properties is set to grow exponentially over the next four years. Savills has recently updated its industry acclaimed five-year house price forecast, predicting a national 20% growth by 2024. The numbers are even bigger eye-candy in the North West, with a monumental increase of 27.3%.

How to get started in Buy to let?

If those numbers sound appealing, you may want to consider getting involved with buy to let. But where to start?

For beginners it can seem quite a monumental prospect to invest in a house and become a landlord. Firstly, where should you invest? How do you know if you are getting the most bang for your buck? What is a rental yield?

As mentioned earlier, the North West is a sure-fire bet, with Liverpool, in particular, offering some seriously impressive rental yields of up to 10%. Rental yields are essentially the percentage of return on your investment you receive through rental income. Anything above 5 or 6% is generally considered good, showing how far ahead of the game Liverpool is at the moment.

If you want to learn more about rental yield and understand exactly how to calculate it, check out the ultimate guide to rental yields from RWinvest. If you are interested in looking at opportunities from home, RWInvest also has a handy VR feature so you can tour properties remotely.

Overall, it is a vital time to look after your money and investing it in property could be a top way to sort your finances out in the long-term.

*This is a collaborative post. For further information please refer to my disclosure page.