Money is tight for many of us and that means that you should always be on the lookout for ways to make your cash earn its keep and give you the best return.

The old ways of putting some money aside in a savings account for a rainy day are long gone, thanks to interest rates that are so low for most savers that it barely seems worthwhile, which is why you have to find some smarter strategies for getting a decent return.



Here is a look at how you can put your hard-earned money to work. There is an overview of how to spread your money around for the best return, how to generate more savings and some tips on boosting your savings with some help from the taxman.

Dual-Purpose Saving

There are several ways to increase your return on any money you are saving and it often pays to consider a variety of options as a viable solution rather than just one.

It makes sense to have some spare money set aside in a savings account for financial emergencies. Hot water tanks, furnaces and cars seem to know when you are low on cash in your current account and often conveniently break down at this very point.

It is expensive to take out short-term loans for emergencies, so instead, be proactive and shop around for the best possible instant-access interest rate you can find, and put a sum of money in that account so that you can get to it in a hurry if you need it. Yes, you will be paid a small amount of interest on that money, but better yet, you will not to have borrow money and pay high interest fees, in order to pay for any financial emergencies.

Work out how much you think you might need in your emergency savings fund and once you have that covered you can start to look for more rewarding places to stash the rest of your savings cash.

Boost Your Savings Potential

You might be wondering how you can put regular amounts of money away each month if you are on a tight budget, but there are always some savvy ways to find more cash from your monthly income that you can then put into savings.

Make it a regular habit to check whether you can better your current deals on the Internet, phone contracts, utilities, and insurance.

Low-cost car insurance deals are out there and if you can shave some money off the amount you are currently paying this can instantly generate some extra cash for savings that you didn’t have before.

Review all of your deals regularly to check if you could be paying less and to make the most of the money you have to work with.


Take the Tax-free Bonus

With paltry interest rates in so many savings accounts, you need to either take a few extra risks to get a better return, which means investing in the stock market, or you could also make the most of your tax-free allowance.

The Personal Savings Allowance has made all savings accounts more attractive from a tax perspective but the smart option is still to make the most of your tax-free ISA allowance. Your money will continue to grow without being taxed in an ISA, whereas interest on other savings can be charged at your marginal rate once you go beyond your personal allowance limit.

Finally, another option to consider is switching to a current account that pays interest. You might as well be earning some interest on your balance while the money is in there and there are various current account deals around that pay much better interest than most standard instant-access savings options.

These are just a few smart ways to make your money work for you, which makes sense when you consider how hard you have worked to earn it in the first place.