How often have you heard the phrase ‘saving for a rainy day?’ And have you ever thought to yourself that it should be something that you should be doing? It’s very easy to spend your wages just as soon as it hits your bank account.
Monthly bills rise, the cost of food and fuel seems more-and-more expensive every day. And somewhere in the middle of all of this practical spending, occasionally it’s nice to treat yourself. For most people, money seems like an abstract concept and is gone the moment you think you have some.
But what happens when something goes wrong? You may need an emergency boiler repair or a new car. The big things that we take for granted won’t last forever, and sometimes they can break without warning. Then there is your health. If you need dental work doing, this can be very expensive. In life, it is always best to have some kind of contingency fund to help you when you need it the most.
For many, the temptation might be to have a decent sized credit card put aside for emergency spending. But with interest rates on credit cards usually being between 15% and 20%, this can add a great deal onto the cost of your emergency transaction. In addition to this, if you can’t afford to pay back your credit promptly, then you will end up getting yourself into hot water financially.
Here are a few ways in which you can proactively save for a rainy day, because you never know when your roof will leak!
Budget Your Expenditure
Before you can start saving, you need to know what exactly you are spending. Create a spreadsheet and list all of your incoming money in one column. If you get a different amount each month, use the minimum that you can expect to receive as the basis of your calculations.
List all of your outgoings, starting with your largest ones such as rent, or mortgage. Work down to the lowest. Highlight any non-essential outgoings. Hopefully, there will be a difference between your monthly income and your monthly expenditure. If there is not, then you will need to look at cutting some of the non-essential expenses out.
Set A Monthly Savings Goal
Your budget planning will let you know about any surplus money that you have each month. You can plan to save some of this money each month. Make your savings goal is achievable, but also make sure that it is substantial enough to rise.
If you set up a standing order into a separate savings account, then you will be less likely to spend it. Keeping it separate from your regular spending money is always an excellent idea. And if you don’t have ready access to withdrawing the money quickly, you will be less likely to spend it.
Use Cashback Apps
Whenever you do need to make a purchase, see whether there are cashback options available. There are plenty of sites such as Topcashback, or Quidco that will give you money back on any of the purchases that you make.
Make sure that you are only using these offers when you would typically be buying an item because buying something just to get the cashback is counterproductive.
Keep The Change
Whenever you get change in cash, put it in a jar. It will soon build up. Once you’ve got quite a bit, you can either take it to the bank and get it changed or convert it using a change converter.
Some internet banking services offer a keep the change feature. When you are paying for something that is an odd amount, the bank will round the value of the transaction up and put all of the small change into a separate account for you. This will soon mount up.
Shop Around
Think about ways that you can save money on the things that you would typically spend. Look around for new deals on things like car insurance, mobile phone contracts, and broadband. You’d be surprised how much these services slide their prices up for existing customers. It is always worth checking whenever a deal is up for renewal to see if someone else can beat the amount that you are currently paying. You’ll generally find that it can be beaten.
Often, energy bills are some of the most expensive bills in the home, why not try switching to a new supplier? With many new, green suppliers joining the market place, there are lots of great offers out there if you switch.
If you have any large purchases to make, make sure that you have checked out all of the options for buying it. There may be shops or websites that you haven’t thought of that may have it cheaper.
Save Any Windfalls
If you’re lucky enough to earn a bonus or get some of your income tax refunded, it can be tempted to go out and blow it all on a big treat for yourself. This money could make a substantial difference to your savings account and is better being kept there until you need it.
Sell Unwanted Items
If you own lots of things that you don’t use anymore, why not sell them on eBay, or have a car boot sale? There is no value in keeping things that you have no use for, and as long as they are in good condition and can be used by someone else, then you may as well turn them into cash.
Cut Down On Your Spending
There a few ways that you can cut down on your daily spending. If you buy coffee when you’re out and about, why not make your own at home and carry it in a travel cup? If you buy lunch on your break during work, taking a packed lunch could save you a substantial amount of money. These little things will soon mount up, and pretty soon you will find that you have saved quite a bit.
Get Insured
Building a rainy day find is essential to cover unexpected costs, but it’s also helpful to go a step further to secure the financial future of your loved ones. This is something you can do by taking out a life insurance policy. You may be wondering is life insurance worth it, especially if you’re trying to build an emergency fund. An emergency fund is used to cover everyday, unexpected costs. In contrast, a life insurance policy provides financial security in the event of your passing. Many people choose to have life insurance if they have dependents, as it brings the peace of mind that if something happens to them, their family will have help to cover the cost of outstanding mortgages, loans, and funeral costs.
*Collaborative post*
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