By Dave Kavanagh

In an ideal world, people should plan to have savings for different requirements. Short term savings is aiming to have about a month’s salary put by, for things like the washing machine breaking down or similar. Medium term is aimed at planning for things that will be happening in a year or two, such as needing to change the car, having a wedding or having a special holiday (when we can again!). These might require 3-6 months’ salary. Beyond these is what is referred to as long-term savings. This is usually aimed at a period of 5 years or more. It can be anything from saving for children’s third level education to planning to buy a mobile home. The main difference with this time frame is that it opens up more options to try and get some reasonable growth on your savings.

As most people know, bank deposit accounts pay little or nothing in terms of interest. In some cases with certain balances, they are actually charging negative interest, meaning they charge you for minding your money! Savings plans that utilise investment funds are a fast growing option for people that want to get the best out of their savings. They are managed by experts that use a variety of investment types within their funds, such as equites and bonds. Your level of risk is assessed, and a fund or choice of funds that matches your requirements is used. With regular savings, the great part is that every time there is a fluctuation in fund value, you get more units for your premium that month. In the long term, these funds usually way out perform bank deposits. Plans can be tailored for your specific requirements. Talk to your financial advisor to find out more.

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing info@financialcompanion.ie or use the contact form on www.financialcompanion.