As a business owner, it can be hard to save money for the future when you’re living for the now.

In part, this is because it’s so much easier to spend than save. Reinvesting in your business and then spending the remainder on your desired lifestyle can feel like the most rewarding way to live, rather than thinking about the long term.

In reality, you need to strike a balance between living your lifestyle now and paying your “future self”. This is key in ensuring you’ll be able to continue living your desired lifestyle later on.

Here’s how you can go about paying your “future self” now to make the most of your money throughout your lifetime.

Start with your goals and ambitions


The best place to start is with your goals and ambitions for the future. Setting concrete targets can refine your saving strategy, giving you a clear focus on what it is that you’re trying to achieve.

Whether you want to retire early and travel the world, or stay on as the figurehead of your business for the rest of your life, knowing what your future self looks like is the most effective way to save.

This has two valuable benefits. Firstly, it allows you to see how much you need to reach your targets. Travelling the world has a calculable figure that you can work out, so you know exactly what you need to save to do it.

Secondly, it gives you a reason to be excited to save. Having something to look forward to can turn saving into an enjoyable experience, knowing that all your hard work is going towards something tangible that you want.

Pay yourself first each month


Once you know what your goals are, you can start building in habits to your financial schedule that put you on track to achieve them.

A simple yet effective strategy for doing this is to pay your future self first each month before you spend.

A common mistake that business owners can make when managing their money is to spend on their wants and needs, only saving what’s left.

Instead, pay your future self first when you take income from your business or any other source. Set aside a certain amount each month and then only use what remains to fund your lifestyle.

This means you’ll always prioritise saving your money before you spend it. It can also help you to make more incisive decisions about where you can cut expenditures from your lifestyle, further improving your savings plan.

Actively save for the future through your pension


With your goals in mind and your saving intentions clear, it’s now time to think about the specific ways you’re going to save and invest your money.

One of the most popular ways to save for the future is through a pension, thanks to the valuable tax advantages.

The tax relief on offer could boost your pension contributions by up to 45%, depending on your earnings. That means a contribution of £100 could “cost” you as little as £55 if you’re an additional-rate taxpayer.

Tax relief is available on contributions up to your pension Annual Allowance, which stands at the lower of £40,000 or 100% of your earnings in the 2021/22 tax year. This can make a great target for building a pot.

One thing to bear in mind is that you may be subject to the Tapered Annual Allowance if you’re a high earner. This could reduce your Annual Allowance to as little as £4,000, meaning you’ll only benefit from tax relief on this amount of your pension savings.

Invest effectively and incisively


If you’ll be subject to the Tapered Annual Allowance or you already maximise your pension contributions, you may want to consider other investment options that you could use to build savings for the future.

For example, investing through a Stocks and Shares ISA could allow you to build a portfolio without having to worry about Income Tax or Capital Gains Tax (CGT).

The ISA allowance in the 2021/22 and 2022/23 tax years is £20,000, so making the most of this each year could be a realistic and achievable goal for you.

If you’ve already used your ISA allowance, you could also consider higher-risk investment options such as Venture Capital Trusts (VCTs) or the Enterprise Investment Scheme (EIS).

These higher-risk investments come with valuable tax benefits that can reduce your Income Tax bill and allow you to save more of your money towards your future.

However, bear in mind that they also present a higher chance of losing your investment entirely. Make sure you’re willing to take on this risk before you invest.

Start small and build up


This can all feel like a lot to take in. So, if you only manage to build one or two new habits into your financial strategy, try to:


  • Pay yourself first and only spend what’s left
  • Contribute to your pension regularly
  • Make regular payments into an ISA each month.


At the very least, doing these simple things can put you on the right path towards saving for the future.

Work with us


If you’d like more clarity over how to manage your future finances, please get in touch with us at Cordiner Wealth.

We can help you to save and invest for your future self to ensure that your business ultimately helps you to get what you want out of life.

Email or call 0113 262 1242 for more information.

Please note


A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

The Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCT) are higher-risk investments. They are typically suitable for UK-resident taxpayers who are able to tolerate increased levels of risk and are looking to invest for five years or more. Historical or current yields should not be considered a reliable indicator of future returns as they cannot be guaranteed.

Share values and income generated by the investments could go down as well as up, and you may get back less than you originally invested. These investments are highly illiquid, which means investors could find it difficult to, or be unable to, realise their shares at a value that’s close to the value of the underlying assets.

Tax levels and reliefs could change and the availability of tax reliefs will depend on individual circumstances.