Spend, save or invest?

Money is of course for spending, but the virtues of saving are drummed into us from the moment we get our first money box. Saving money in an account means that the bank or building society adding to our cash is the next step, and the longer you leave money on deposit, the more it could grow.

But now, thanks to paltry interest rates and the effects of inflation, saving money means watching the value fall. 

Price inflation – which is currently running at over 5% and forecast to soon hit 7% – means the real value of your savings is dropping.

The pound you saved this time last year might buy around 95p worth of the things you want today – and next year, even less.

In inflationary times like these, you might be tempted to give up on savings altogether and spend everything you have as soon as you get it. 

At Continuum, we think there is a better way, and that spending, saving and investing can work together to improve your financial outlook.


There is always a need to spend. Putting food on the table (not to mention buying the table and keeping a roof over it) will always demand spending. 

Making good use of the money you have coming in is the first step towards financial security. Make a budget, stick to it and you can see what you can afford to spend, and just as important, what you will have left over. 

It might make sense to buy some large items now if you need them, before prices increase any further. But although it may not seem like it, the best way to use any cash you have left over each month is to save it.


In the short term, it’s a good idea to build up ‘rainy day’ cash savings you can easily call on if you need to. Emergencies can come along at any time and having some cash to call on makes them easier to deal with. Yes, you could use a credit card to deal with the unexpected expense, but it will need to be repaid and until it is, the high interest rate will cost you more money.

Having a cash reserve to call on limits the damage to your finances.

If you need to deal with repairs to your car, boiler for example, or if you have a change in circumstances, having cash to call on will make it easier.

You might want the equivalent of 3-6 months income in reserve to call on and you will want to be able to access your money straight away.  Even these days, stuffing cash into the mattress is not a good idea. At Continuum we can help you find the instant and easy access accounts that provide the best returns on the money you want to keep in reserve.

Remember, most cash savings are completely safe. They may not grow fast in the current economic climate, but they are protected by the government’s Financial Services Compensation Scheme (FSCS). It protects 100% of the first £85,000 you have saved, per financial institution (not per account).

You can even put money into a Cash ISA, ensuring that you make full use of your valuable ISA entitlement of up to £20,000 a year and keeping your money safe from the taxman.


Longer term, you might want to consider investing as a way of growing your money. So, when your savings have reached a point where you can deal with emergencies, it is time to start looking at investing. 

Investing is very different from saving. Your money does not remain as cash and instead is used to buy assets intended to grow in value or bring in an income. Unlike the security offered by cash, investments come with no guarantees. They can fall as well as rise in value, so you could get back less than you invest – however, over the long term, a sound investment has the potential to help you make your money grow.

You don’t need to be an investment expert to be a successful investor.  You don’t even need to understand the stock market – our experts can guide you through the world of investing.

Get some help

Spending is easy enough, but to make saving or investing work harder for you it makes sense to get some expert help. At Continuum we can work with you to help you prepare a financial plan covering everything from basic savings to sophisticated investing. It can mean making the most of all of your money, increase your financial security and improve your financial outlook – and you can start by calling us today.

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.

The value of investments can fall as well as rise and you may get back less than you invested.

The Financial Conduct Authority does not regulate deposit accounts

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