How can you make a difference with your personal finance choices?

As individuals, we have the power to make a real impact through our personal financial choices. There are many ways to do this, and one important approach is to consider the environmental and social impact of the financial products and services we use.

?Some options to consider include:

1.????Green savings

2.????Green investments

3.????Products that support a more sustainable lifestyle – green loans, green mortgages, green insurance, green energy.

In this post, we’ll talk about green savings in more detail.

Look out for the blog post on green investments and green lifestyle banking next!

Savings and the main types of savings accounts

Let’s start with fundamentals of savings.

Whether your savings goals are big (your first home purchase) or smaller (your next weekend getaway), there are several types of savings that you might consider, each with their own benefits and drawbacks. In general, with savings account, it is important to remember that saving is a very safe financial product, as in the UK you are generally protected by the FSCS guarantee up to ￡85,000.

Firstly, there are easy access savings accounts. These are typically designed for people who want to be able to access their money quickly and easily, without any penalties or restrictions. With an easy access account, you can withdraw your money at any time without incurring any fees, the trade-off can be that you generally earn a more modest rate of interest on your savings.

Another type of savings account is the fixed-term or fixed-rate account. With this type of account, you agree to deposit your money for a set period of time, typically anywhere from a few months to several years. In return for committing to this period, you may be able to earn a higher rate of interest than you would with an easy access account. However, if you need to withdraw your money before the end of the fixed term, you may be charged a penalty.

There are also notice savings accounts, which require you to give a certain amount of notice before you can withdraw your money. These accounts may offer slightly higher interest rates than easy access accounts, but they may not be as flexible in terms of access to your funds.

Finally, there are ISAs savings accounts or “cash ISAs”, which allow you to save tax free up to a certain amount every tax year. Typically, cash ISAs offer a lower rate of interest so if you’re not paying tax on your savings – it may not make sense for you. Each ISA will have its own terms.

The most important thing about savings, is to get started!

There are several tips to keep in mind when building healthy money habits and starting to save

Firstly, it's important to set a savings goal and work towards it. This could be anything from saving for a vacation or a down payment on a home, to building an emergency fund or planning for retirement.

Secondly, it's a good idea to create a budget and track your spending. This will help you to identify areas where you can cut back on expenses and free up more money to save. You might also consider automating your savings, by setting up a direct debit to transfer a set amount of money into your savings account each month.

Finally, it's important to choose a savings account that works for you and your financial goals. Consider factors such as interest rates, fees and charges, and access to your funds when choosing an account, and make sure to shop around to find the best deal.

By following these tips and choosing the right type of savings account, you can build healthy money habits and start saving for a brighter financial future.

?Keep reading for our bonus top 10 tips to get you started with savings

1. Start small: begin by saving a small amount each week or month, and gradually increase it as you get more comfortable with saving.
2. Set a goal: determine what you're saving for and set a specific target amount to work towards. This will help keep you motivated and on track.
3. Create a budget: understand your income and expenses to identify areas where you can cut back and save more money.
4. Use technology: there are plenty of apps and tools that can help you track your spending, set savings goals, and automate your savings.
5. Take advantage of workplace retirement plans: If your employer offers a retirement plan, consider participating and taking advantage of any employer matching contributions.
6. Reduce debt: high-interest debt can be a major obstacle to saving, so consider paying down debts with the highest interest rates first.
7. Consider ways to get additional income: look for opportunities to earn a little extra, such as a part-time job, freelancing, or selling unwanted items – this is also great for the planet as it keeps things in circulation for longer and away from landfill
8. Be mindful of your spending: before making a purchase, ask yourself if it's a need or a want. Being mindful of your spending can help you avoid unnecessary expenses and save more.
9. Avoid ‘lifestyle inflation’: as your income increases, it can be tempting to upgrade your lifestyle. However, this can make it harder to save. Instead, try to maintain your current lifestyle and put any extra income towards savings.
10. Be patient: building a savings habit takes time and effort, so be patient and don't get discouraged if progress is slow at first. Celebrate small victories and keep pushing towards your goals.

What are 'sustainable savings'?

Sustainable savings refer to a type of savings account that is designed to have a positive impact on the environment and society.

These accounts may be offered by banks or other financial institutions and typically use the money deposited into them to invest in a range of sustainable and socially responsible projects, such as renewable energy, social housing, or sustainable agriculture. Just like a normal savings account, sustainable savings are a very safe way to grow your wealth.

Sustainable savings accounts can help individuals to align their financial goals with their values and support positive change in the world. In addition to providing a social and environmental benefit, sustainable savings accounts can offer competitive returns on investment. By choosing a sustainable savings account, individuals can achieve their financial goals while also supporting projects that contribute to a more sustainable and just future.

Shoal is an example of a great sustainable savings product that can help you reach your savings goals in a way that also supports sustainable development and the fight against climate change.

Shoal's fixed saver account will offer 3, 6 or 12-month Savings Pots that earn a competitive fixed rate of interest and help support a portfolio of sustainable projects around the world.

Saving through Shoal, you can support the avoidance of CO2, help create clean water and support other ESG investments like microfinance loans – so it’s a win for the world, and for your wallet.?

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