Sacrifice your morning coffee for a £18,000 savings pot
At £2.50, five days a week, a coffee can cost £50 a month. Research from Fidelity showed that giving up the daily caffeine kick and put this money to work in a stocks and shares ISA could generate up to £3,307.61 after only five years, £7,303.68 after ten years and £12,131.51 after fifteen years.
It is encouraging savers to consider an ‘ISA cappuccino plan’, a monthly saving plan designed to encourage people to invest for the future. It is also encouraging people to make other small lifestyle changes to help them save more. It pointed out that bringing lunch to work could save as much as £100 a month, giving you a £35,929 pot after 20 years. Giving up a pack-a-day smoking habit could save £150 a month, topping up your savings to £53,893.
Emma-Lou Montgomery, associate director for Personal Investing at Fidelity International said: “We all are guilty of frittering away money without realising we’re doing it, whether it is on coffees or even Uber journeys. It is important to stop and think about what you are spending your money on, identifying where you could make small changes to save some cash. Many investors struggle to find a lump sum to get their ISA portfolio started; but in fact the money is right in front of you. You could quickly build up a significant ISA pot by saving on some daily expenses, and the sooner you can start the better your results will be.
“A monthly saving plan where you drip-feed your money into your investments regularly is a great way to get the ball rolling. This approach will also mean that you benefit from a process known as pound-cost averaging; where you automatically buy more units in your investments when prices are low. The benefit is that you will be cushioning your ISA portfolio against dips in the stock market by buying at a variety of prices and spreading your ongoing investments over a period of time.”