Conversations about money seem to be very few and far between for most, whether it be due to the embarrassment of your financial situation and debt, or fear of not being relatable to those struggling, money seems to be a taboo subject.
This Debt Awareness Week, we explore how managing your money more effectively can have a positive impact on your relationship with money, and in turn, help you pay debt back and even start saving.
The UK’s Saving Situation
Finder found that 1 in 10 Brits have no savings, and around a 3rd of us have less than £600 in savings. It’s recommended that people should have three months’ worth of expenses saved, so in case of time without income, household bills can be maintained. So, what can be done to change this?
For some, a simple change such as maybe opening a savings account can make a big change. Some people like the idea of using three accounts: one for bills, another for spending, and finally a savings account. That way, you know that your bills will be paid on time, you’ll have money set aside for groceries etc and will have some savings for emergencies or yearly costs.
Saving Methods to Help
There are a few different options when it comes to savings, so we’ve round up 4 of the most common:
- Saving challenges – many like the idea of putting aside every £1 or £2 coin, others every £5 note they receive. This is usually by having an unopenable jar or tin to keep the money at arm’s length until it’s full. Once it’s full, you’re likely to have built a rainy-day fund.
- Save your change – some current account providers offer the option to virtually save your change. This usually means that they’ll round your transaction to the nearest pound and put the extra into a savings account. E.g., £1.55 transaction, 45p into savings.
- Save a percentage – calculate a percentage of your income, let’s say 5% and set it up as a standing order into your savings account. If you treat it as a bill or as part of your budget, it will become a habit that you’ll soon find easy.
- Save a fixed amount – create a budget plan listing all income and outgoings, figure out how much you have surplus and set a figure to transfer into savings each pay day.
Essentially, when it comes to savings, the only wrong way of doing it, is by not doing it at all! If you find a way that you like saving and it works for you, stick to it. You’ll have saved a rainy-day fund in no time.
Struggling with saving due to debts?
If you find saving difficult, or battle with your finance’s month on month, seeking advice and support could be the turning point for you. Meeting minimum payments to credit facilities and then using it again to get by can be a sign of persistent debt. You can get free, impartial debt advice from Angel Advance via telephone, email or by using our Online Debt Advice Tool.