This debt advice applies to individuals in the UK with personal debts.
Most individuals have to face unexpected expenses on certain occasions. It can either be due to sudden job loss, repair for broken household goods, vulnerability or any other unfortunate circumstances.
Usually, on the absence of savings, people rely on taking out debts. Somehow, as you borrow money to compensate your needs, you’re adding up another kind of debt in your way. It’s time that you manage your resources and finances and set aside money for rainy days.
What are the unexpected costs?
Some of the unexpected costs or expenses that you might be dealing with are as follows:
- reduced in income due to sudden unemployment, vulnerability or illness
- car repair or appliances breakdown
- relationship breakdowns such as divorce or separation
These expenses can be treated as emergencies when you are unable to suffice payments on it. For instance, you just had divorced and it leaves you to shoulder the essential living costs alone. Your inability to satisfy household bills and essentials can branch to several consequences. It can end up getting more loans or credits to compensate for your needs.
How can I start saving even with a limited income?
When you’re paying towards debts each month, saving with a limited income can be hard for you. However, if there’s spare money that you can set aside, eventually it can grow over time. You don’t have to start huge as everything starts with small beginnings.
You can also consider increasing your income if you wish to save more. Besides, cutting on unnecessary expenses is ideal too.
The Most Feasible Way to Save Money for an Emergency
There are several ways of saving money based on what you can afford. You can:
Monitoring Your Spending
Review your spending regularly and check it against your budget each month.
Keeping Small Change in Container
Keep small change that you got in a container and have it transferred in your savings once it grows. Since these are coins, you have to sort it out by denominations before taking it to the bank. Also, some supermarkets have coins deposit machines where you can get banknotes in exchange for your coins. These machines charge you 7p per pound being deposited. You may prefer taking it to the bank instead. However, they may reject changing your coins when they’re busy.
Save Coins Digitally
There are countless mobile banking application for your phone that controls your spending. They can round up each purchase you make to the nearest pound and placed the variation among the accurate value and the rounded-up value into a digital savings pot. These apps are frequently free to use. Additionally, you can either check your savings pot at any instances or lock it off for later.
Save on your Bills and Online Purchases
You can save money when on your bills by comparing provider or suppliers of gas and electric, water, and mobile phone contracts. Also, using cashback websites can help you save up money every time you purchase online.
Where can I put my savings?
You can either save your money through the following means:
- Opening a separate bank account that is intended for emergencies alone
- Check for a local credit union and see if you can open a savings account with them
- Make sure you save every penny in a container
Am I eligible for the Help to Save scheme?
You can boost your savings by 50p for every £1 that you saved when you are entitled under the Help to Save scheme. This is backed by the government and is designed for people with low income and few assets. If you are getting a Working Tax Credit or Universal Credit, you can try qualifying for the Help to Save scheme.
What to do if I don’t have emergency money for food?
If you need help with emergency money or food, there are various ways and help available for you. The emergency money and food scheme are designed to assist individuals who are unable to afford essential needs.