Start saving now
40 % of the UK's working population could not live on their savings alone for more than a month, according to credit reference agency Callcredit. More than a quarter of the population have no savings at all, and a further quarter have less than £3000 in savings, say Credit Action.
How do you react to this? ‘That’s awful / normal / scary / just the way things are these days’. When I first read these statistics, I was shocked. Then it hit me – I have no savings. I’m twenty-three, and have been working for fifteen months, since graduating from university last summer. Naturally, I’m in debt to the student loans company (somewhere in the region of £13,000), but I don’t think about it. A lot of people are in my situation.
But… no one else is going to take responsibility for my finances. Only I can do that.
Bringing it home
I’m fortunate to have a job and (other than my student loan) no debts. So what am I doing with my monthly income? From my half-hearted attempts at budgeting I can now tell you about the bills leaving my account, and my regular spending on food and petrol. I don’t have much left over.
But here’s the thing – If I lost my job, or got sick, or for some unforeseen reason had to pay out my month’s wages on my car, where would I find money for the next month? I have no savings. Nothing. Nada. Really, the next step is obvious. I’ll just start saving.
Navigating the banks
I have to admit, I get confused when it comes to banking. There’s so much out there, and to be honest, I don’t know who to trust with my finances. But I just need to apply myself to finding a savings account that does what I need it to do and start putting some money into it. I’ll choose the account by asking a few key questions:
• What’s the interest rate?
• Will the interest rate change if my savings drop below a certain amount?
• What’s the minimum amount I need to set it up?
• How easy is it to withdraw the cash when I need it?
Direct debit is great. Payment for my landline, gas, electricity, mobile phone and insurance go out on the dates I set up, and as long as the money is in my account, it runs like clockwork. So perhaps if I add ‘savings’ to that list of direct debits, I won’t notice it! In a little while, I could have 2 months worth of savings stashed away, and one less thing to worry about.
Time to get started
I’m writing myself a little ‘to-do’ list:
1) Research savings accounts (Of course, I won’t do all the leg work myself – I’ll go to a comparison website and see which one suits my needs best.)
2) Open a savings account
3) Set up a direct debit. I think I’ll start with £10 a month, and see if I miss it. If I don’t, I’ll put in £20 a month.
At least it’s a start.
Written by Becky Matyus.
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