Let’s face it, saving isn’t an easy thing for most people to do. That’s even more true during the current cost of living crisis that is gripping millions across the UK and the wider world. While people can barely afford to pay their household bills and other expenses, saving is probably the last thing to do on the list. However, saving anything at all each month is such an important step for a number of reasons. In this article, we’ll explore why you should still be looking to save and why you’re best doing this on payday.
Why should you still be looking to save?
Saving is an important process to give you a financial safety net, which is even more significant in the current crisis. If you don’t have any savings behind you then you are more vulnerable to unexpected bills and emergency payments that are more likely to plunge you into debt. A so-called emergency fund is a good step just for that reason – to help you with money stashed away in the event of an unexpected expense that needs solving quickly.
If you have relatively small amounts of debt then focus on paying this off before you start to save, but if you have lots of debt that will take years to pay off – put a little aside each month into your emergency pot and then start to tackle your debt, providing you can cover all your other living expenses too.
Why should you always save on payday?
It’s an extremely effective method for several reasons. Saving on payday, presuming you’ve thoroughly budgeted, allows you to put away fixed amounts of money in your savings before you have the chance to spend your income over the month. This all but removes the temptation to buy something else or to use that money elsewhere because you’ve removed it from the equation at the start of the month.
If you wait until the end of the month to save, you’re more likely to be scratching around trying to find spare pounds and pennies to deposit in your savings account. Compare this to the nice lump sum you could have deposited at the start of the month and it becomes clear why saving first is better than saving last.
The great thing is that even if you save at the start of the month, you still have that money to dip into if you really need it (but hopefully not). This pot can be a lifeline in many situations, and if you don’t need to use it then it contributes to your future!