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Are you low on savings? Lots of us are, but there might be ways for you to save that you haven’t tried yet.
New research has shed light on the fact that millions of people in the country are finding it difficult to put a significant amount of money aside for a rainy day. Apparently, 16 million people have less than £100 in savings, leaving them vulnerable should a large unexpected bill come their way.
When you look at all the regions in the country, Northern Ireland, Wales, North East England, the West Midlands and Yorkshire and Humberside, were all identified as having the highest number of people who have less than £100 in savings.
The research, carried out for the Money Advice Service (MAS), also showed there are some workers on low incomes that do manage to put something aside each month. Some of the people questioned were earning less than £13,500 per year. A quarter of these people, still had more than £1,000 in savings and two-fifths of them managed to save something each month.
Is saving achievable for everyone?
There are some cases where it might not be possible to save anything. If you have lots of demands on your income, because you have dependents or because you have debts to pay, you might find that you’re not able to save anything.
In fact if you do have debts, it’s better to prioritise paying these back over saving. This is because you’ll still be paying interest on the debts you have while you save. And the interest you’ll be paying on those debts is going to be higher than the interest you’ll earn by saving. So paying off debts first is a smarter way to use your money.
Having said that, MAS still thinks that in most cases it’s possible for people to save a little something each month. It might just require another look at your budget to see whether there is anything you can cut back on and whether you can make the money you have go a little further.
If you want to save more or start a rainy day fund, make sure you put together a budget which shows absolutely everything going on with your finances month-to-month. You should be able to see how much money you’ve got coming in and how much you’ve got going out. Don’t forget to factor in those more infrequent costs that can creep up on you and throw a spanner in the works.
Once you know what’s going on with your money, you can see if you can save anywhere. For instance, do you need everything you’re paying for at the moment? Have you looked into the best deals on your utility bills? Really try to identify any money that’s being wasted, our previous blog on keeping a spending diary might help with this.
You can also try to use your money differently and see whether this saves you anything. Why not have a look at how and where you do your food shopping to see whether there’s any savings to be made? Changing your supermarket, shopping later in the day or buying in bulk can all make a difference to how much you shell out for food.
Or, see whether you could save by sharing the cost of something with family and friends. For example, could you car-share with a friend on your way to work and pay half the petrol costs? Or can you and a few family members pool your money for food and feed more people this way?
Saving is always a good idea
Wherever you live and whatever you’re earning, saving is always a good idea if you can manage it. It can protect you from financial shocks, mean you have a little something to put towards luxuries for you and your family, and over the long term will mean you have a something to fall back on later on in life.
Once you know how much you can realistically save each month, it might be a good idea to set up a direct debit that goes straight from your current account to your savings account – so that you’re not tempted to spend the money.
It’s important not to become disheartened if you’re finding saving tough – there might be lots of ways to put more money aside that you haven’t tried yet. Have a look at the rest of the money-saving section to find lots more ideas.
by Christine WalshBack to blog home