Almost 50 million households in the country have less than a month’s salary in savings, a report has revealed – while a further third of the population, have absolutely nothing.
That’s according to a new UK wide survey by Paymentsense and it’s pushing millions of us into a life of debt.
The report found a worrying 45.5 million people across Britain have less than a month’s worth of their wages stashed away.
With the average UK salary £27,271, according to the Office for National Statistics, that’s a rainy day fund of less than £1,819 for an entire household.
But it gets worse. A third of Brits have no cash at all for a rainy day – which may account for the 66% of survey respondents that confessed they’re living on more than one credit card.
Interestingly, it would also seem that as a nation we are actually fairly relaxed about money despite mammoth debt and rising interest rates – with only 55% of us concerned about how our debt will play out in later life.
Having a savings pot not only gives us security for emergencies – such as sudden unemployment or redundancy – but can also help hugely with budgeting and staying on top of our goals, such as buying a house or taking a holiday.
A Paymentsense spokesman said: “There’s no denying it – it’s harder to save now than it’s ever been and as a result many of us are falling back on credit cards and loans to keep ourselves in the black.
“With many of us reflecting on our childhoods and wishing we had taken heed more around advice to budget more, refrain from buying things we can’t afford and save more, maybe it’s time to reflect on the size of our rainy day fund and top it up a little.”
Having an emergency fund you can dip into is vital, it means you won’t need to turn to expensive credit cards and risk building up debt.
Remember every pound you borrow has to be paid back – and with interest on top.
To start with it can be tough finding money to save but a few small changes such as taking packed lunches to work, cutting back on shop bought coffees and ensuring you are on the best deals for your insurances and energy bills will help to free up some cash you could put aside each month.
Getting into a regular savings habit, even just £10 or £20 a month, will help you to build up a financial cushion to see you through emergencies.
How to start a savings fund
Having a financial safety net is vital in case you hit hard times or get slapped with an unexpected bill.
Getting into the savings habit is the hard part but once you get going you’ll soon get a buzz as your balance grows – and you’ll get a good feeling as you head towards financial security.
Start with just £5 a month, you won’t really miss £1.20 a week and once you get used to that try and put a bit more away.
It soon builds up £10 a month = £120 a year, £30 = £360.
You might think you don’t have a spare penny to save but there’s lots of ways you can squeeze a few pounds here and there.
Dig out that old piggy bank or create some funky jam jars and start putting a bit of that loose change in them. You could save 20p pieces or copper. It’s amazing how addictive it can become. Once it reaches a certain level pay it into a savings account.
Giving up two takeaway coffees a week will free up £4 – that’s a good £200 a year for your savings fund. Smoking two cigarettes a day less will save you around £250 per year.
Making your own sandwiches instead of buying shop bought ones for three out of five days a week would give you around £50 a month to put away.[“Source-mirror”]