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Be Savvy With Your Cash Like the (Ahem) Big Boys

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RETIREMENT PLANNING
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There's no doubt that when it comes to saving we're all talk and no trousers. You could also be forgiven for thinking then that men are better at it than women, but even that's
not true.

Even odder - and up there with life's great mysteries (for me anyway) is why we're not sensibly squirreling our cash away. Not all of it, just a sensible amount, for a rainy day - our retirement perhaps? It seems that most of us spend our lives sweating it out in the office or on the factory floor but will throw away our hard-earned cash at the drop of a nicely tailored hat. The truth is we hate saving so much that most of us have next to nothing for a pension and are walking blindly into retirement poverty.

Admittedly (and it's usually only short lived), but the new year is perhaps the one and only time when our thoughts do actually turn to saving. Whether we do anything about it is a different matter but we certainly think about it - usually because we're so far in the red and sick of eating baked beans for breakfast, lunch and tea, that we can hardly think of anything but how much an extra tenner would bring to the table.

This year for most folk who get by managing their finances without the wizaldry of Starbucks and Amazon, getting money in, nevermind saving it, is the problem. The double-dip recession is hitting hard. The office for National Statistics has found that household incomes are being squeezed more than in previous recessions, and even when the government introduces compulsory pensions we are inclined to opt out. Saving is the last thing on our minds. Markets are crashing all around us and we are struggling to get by.

There's no doubt in my mind that what we need is a saving revolution. Psychologically I mean. If we could all be retrained to realise it can be bearable to save money, that it doesn't have to be about scrimping and saving all the time, then maybe we could all start going places.

There are no excuses really. Admittedly there are more things there to tempt us: iPads, iPods, kindles, mobile this and that, everything electronic, but in this new economy there is more around to help manage our finances too. Most of us are signed up to Groupon, Living Social or the like and there are people now who pride themselves on never paying full price for certain things.

Other money saving tricks include going on a VAT free diet, and switching from say chocolate coated biscuits to chocolate chip cookies or from potato crisps to tortilla or corn chips. And there's your gym membership. Are you sure you really need it or could you just go out running instead? Consider switching your energy supplier, buying cheaper brands of food, and next year, scheduling in a day in August to go Christmas shopping and bagging yourself some bargains in the summer sales. Day-to-day savings like this really help. The sky really is the limit however if people would only take a long term view and looked properly at their retirement savings. For example at the age of 30, if you can shop around and increase the return you get on your pension by 2% it will increase your retirement income by 135%. That is, you don't have to save more to increase your retirement income you just have to get a better return on either what you have paid or what you are already paying!

As I see people dashing around from pillar to post, stressing about work, it really does remain a mystery to me as to why people don't take a sensible look at their finances - it's up there with the best of life's mysteries.

Alex Campbell, Founder and Managing Director at Campbell Harrison retirement and investment planners.

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