Throughout your life, you will always feel a little better if there’s enough money in the bank to cover the cost of living. Food, accommodation, medicine, electricity – if you can pay for all of that, it leaves you free to enjoy life with very little to worry about. However, as you get older, you may find that you’re no longer in a position to look after yourself.
If, on reaching old age, you need extra help to get through each day, there are usually additional costs involved. Medical bills and, should you need to move into a care home, accommodation fees will need to be paid for if this happens. This is why it’s worth saving money to meet your long-term care needs, but how can this be achieved?
Freeing up funds
Just in case you need care for a number of years, it may be worth looking at your assets. If possible, consider downsizing. This could mean selling your current home and moving to a smaller property, doing the same with your car and selling any unwanted items. Any money you do make should be placed in a high-interest account and kept safe – an ISA would be ideal.
Before you consider downsizing to free up funds, you’ll need to know how much you’ll need to save. Although there’s no knowing when you’ll need care in the future, it’s better to be safe than sorry. Advice from someone like Tilney may help you to work out how to get to a certain amount of money as and when it’s needed.
Choosing a savings account
Arguably the safest and easiest way to build up funds for long-term care is to set up a savings account with your bank. There are many different types of savings account to choose from, which can cause confusion. Ideally, high interest account types like ISAs, where you open a new one every year, will deliver a better return for your money.
There are different types of ISA available. Cash ISAs are the most straightforward; where you just put money into one and watch it grow. A riskier but potentially more rewarding alternative is the investment ISA, where you put your savings into stocks and shares. If they work, you could end up with lots more money than you bargained for. You need to pick stocks and markets to invest in before opening one.
Living within your means
Finally, to ensure you have at least some funds set aside for care, take a close look at what you spend each month. If you’re spending money on things you don’t need like regular meals out or books you’ll never get round to reading, try to cut down on them. Longer term, this could save you enough to fund months or even a full year of care in a hospice.
Your bank statement should have a detailed list of your outgoings, as well as what money you have coming in. Read your most recent one and identify where you can make savings. Also, it’s worth doing this to see what money you have to spare each month; a portion of that could go towards a savings account.
It’s not an exact science, but saving for the future can be made possible in all kinds of ways. It’s just a case of seeing what you can afford and where you can raise funds.