Maximise your savings: Stash it now and you’ll live like a lord later.

Despite her wisdom on matters pertaining to stain removal and the best type of mints, grandma’s approach to banking – stuff it all under the mattress – was somewhat short of the mark. If you’re going to hoard, and let’s face it, you should, make sure every penny works its socks off…

Take the no-risk gamble
The practice of hooking up with a building society in the hope that it one day converts into a bank – and gives you a cash windfall – is called carpet-bagging. And Sean Lewis at finance website Maxxsave (www.maxxsave.co.uk) approves. “Back in the ’90s,” he says, “loads of them converted, including the Halifax and Woolwich, and they all paid out about £1,000 to savers. It’s been a while since any have floated, so now may be a good time to spread your savings around a few of them in the hope they float.”

Get addicted… to saving!
“Start by opening a high interest savings account,” says Barry D Horner at Paradigm Norton Financial Planning (www.paradigmnorton.co.uk). “And commit to paying in as much as you can each month. Then get used to admiring your account balance rather than that new pair of trainers and build from there. Move on to shares or other riskier investments when you’ve built up a good cash reserve.”

Use your house as a savings account
“Rent out a room,” says Jane Gilhespy at Payplan (www.payplan.com), a specialist debt company that offers debt solutions free of charge. “When we’re looking at ways to help people, this is an oft-overlooked idea which also works for people who want to be pro-active about their finances. The going rate for a double room in London is over £100 a week, and isn’t far short for much of the rest of the UK. Think of it as a savings plan, and in ten years, your spare room could easily have earned you enough to buy a Porsche Boxster.”

Don’t put it in Premium Bonds
The lure of a massive jackpot encourages millions of us to buy these government bonds in the daft idea that we’re getting a decent return. Visit Martin Lewis’ Bonds predictor at www.moneysavingexpert.com and you’ll realise how dozy an investment it really is: over ten years, £10,000 of bonds has only a one-in-30 chance of winning £5k or more – a figure you have a 100% chance of getting in a high interest bank account.

Prepare now for Christmas
A startlingly good offer with those in the mood for a little squirreling: Skipton Building Society has launched a Christmas Saver account which pays a fixed rate of 7.55% (AER) until it matures on November 24. All you have to do is fund the account to the tune of between £10 and £250 each month.

Invest in your own mortgage
Continues Sean Lewis at maxxsave.co.uk: “One way to save money on your mortgage is to close your savings account and use your savings to pay off part of the mortgage. It might sound strange, but it works because the interest rate on debt is usually higher than on savings, plus you have to pay income tax on any savings interest that you earn.” For example: £10,000 mortgage debt at 6.4% interest per year is a £640 interest cost per year. Meanwhile, £10,000 of savings at 5.7%, plus up to 40% income tax, can leave just £342 of extra savings per year. If you’re a high-bracket taxpayer, by putting £10,000 in a saving account you are actually losing £298 per year!