There’s nothing quite like Christmas, but it’s no secret all those parties and gift giving can make it an expensive time of the year.
The festive period can often leave us feeling slightly less flush than before, not least during a cost of living crisis when we’re all feeling the squeeze more than usual.
But that doesn’t mean there’s nothing you can do to improve your financial situation in 2023.
Plum is a smart money app that lets you save, invest, budget and manage your spending using the power of automation.
And that’s not all – it can even help you get the best deal on your household utility bills! We don’t ‘think’ it can do the washing up and write thank you letters for you just yet, but we’ll let you know if that changes…
This New Year, it’s time to take matters into your own hands and make your money work harder for you.
Here’s how Plum works, and why you need to download the app (available on App Store and Google Play)
Get smart with your money
Smart phones, smart watches, smart fridges… it’s a word you hear applied to all sorts of gadgets and household appliances (not to say you, dear reader).
But what about smart money?
That’s what you can get with Plum, which connects to your bank account before analysing your income and spending using super smart artificial intelligence (AI) technology. You can also connect more than one bank account or even your credit card accounts to get a smarter, more tailored experience.
It then calculates daily how much it can safely put aside without leaving you short before automatically moving this money to your Plum account weekly.
You can choose to save this cash into a 1.95% AER* Interest Pocket – that’s a better rate than many traditional high street banks! – or invest it instead. Please note that the rate Plum offers may change in the future.
It’s worth being aware that, unlike some savings accounts, Plum’s Interest Pockets pay compound interest – meaning you receive interest on the interest you’ve already earned as well as the money you originally put in.
This may sound like a technicality (or a riddle!), but it can significantly increase your savings over time. In fact, Albert Einstein once described compound interest as the ‘eighth wonder of the world’ for its wealth building potential!
Although compounding returns over the longer term can potentially help your money work harder, always remember that this method works best in your favour only when you give it a long period of time. Over the short-term, there may be better options.
As you watch your savings grow, it’s important to know they’re in safe hands. With Plum, deposits up to £85,000 into savings accounts are covered by the Financial Services Compensation Scheme (FSCS) in case the worst should happen. There are also safeguards for a non-interest earning pocket, such as a Primary Pocket, which is protected by the E-Money Safeguarding Rules. If you need help, friendly customer support teams are available 7 days a week, further details here.
We’ve already covered how the app automates your savings, which can help you save more by reducing the temptation to spend spare cash on things you don’t really need.
Another way Plum helps you put more money away is by ‘gamifying’ the savings process to make it as fruitful as possible.
It does this by offering lots of clever savings rules, like Round Ups, which rounds up transactions to the nearest £1 and saves the difference.
There’s also the 52 Week Challenge – which puts aside £1 the first week before increasing this by £1. This means you’ll reach £52 in the final week of the challenge and bank an impressive £1,378 over the year.
Alternatively, you can try Rainy Days, which automatically sets money aside when it’s raining (a time when you’re less likely to be out and about spending money – geddit?!)
Another way you can control how much Plum sets aside is by selecting your savings ‘mood’.
Feeling like a super saver? Then click ‘Beast Mode’ to increase your contributions by 75%. Expensive week that’s left you feeling the pinch? Select ‘Shy’ and you’ll set aside 50% less.
You can pause automatic deposits at any time and withdraw money from your interest account on the same day if you put in a request before 3pm on business days. Requests after 3pm or on weekends will be processed the next business day.
Budgeting – without the faff
Reams of bank statements, spreadsheets, sums that don’t add up… welcome to the (not always so) wonderful world of budgeting.
Making a budget and sticking to it is a crucial first step to healthy finances, but the traditional way of going about it can sometimes be arduous and time consuming.
Not so with Plum! The app does the sums for you to provide a monthly payments overview, which shows how much you’ve committed to spending on bills and subscriptions and how much is left over to spend or save, based on the information from the bank account you’ve connected.
You can set daily or weekly balance updates, and automatically track your spending by category.
What’s more, Plum can keep track of your regular utility bills to automatically check if you’re being overcharged compared to other providers and could save money by switching to a new provider.
Become an investor from £1
There’s a perception that stock market investing is the preserve of financial whizzes or people with bucket loads of cash. Well, if it ever was – it’s not anymore!
Investing some of your savings for at least five years can be a way to make them go further, and Plum helps you to get started by making the process simpler.
Bear in mind experts recommend paying off any debts before you begin investing and having at least three months’ worth of outgoings in an easy access savings account for emergencies.
Plum lets you get started from just £1**, with a hand-picked range of investment funds grouped by theme and level of risk, plus shares, including fractional shares, from more than 2,000 of the world’s top companies.
A fractional share is when you own less than one whole share of a company, allowing you to invest in companies that may otherwise be too expensive.
Plus, you can now set buy orders for individual company stocks and funds on a daily, weekly or monthly basis, allowing you to drip feed money into the market over the long term.
This technique, known as pound-cost averaging, is an appropriate solution for many people because it helps to ride out some of the fluctuations in the value of investments.
When using repeat investment, you should be satisfied that it is suitable for you in the light of your circumstances, your financial position and the risks you are prepared to take.
Keep in mind that as with all investing, your capital is at risk, meaning the value of your investments can go up as well as down.
The better way to spend
So, you’ve downloaded the Plum app and are officially a smart saver. Now the time to become a smart spender too!
The Plum Card helps you spend and manage your money, all in one place.
After ordering yours on the app, you can load it with money from your Primary Pocket or linked bank account – allowing you to keep tabs on the amount you’re spending.
The debit card is supported by a dedicated section of the app, allowing you to manage your card and keep track of purchases in the same place as your savings and investments.
Plum Card can be used anywhere that Visa is accepted, and there are no charges for using it abroad beyond Visa’s daily exchange rate.
Capital at risk if you invest. You shouldn’t invest in or deal in any financial product unless you fully understand it and the inherent risks. If you automate and invest you should be satisfied your choices are suitable in light of your financial position and circumstances.
*Easy Access Interest Pockets are provided by Investec Bank Plc.
**Other regulatory fees and fx charges still apply.
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