How much should you have saved for a rainy day?
We all know that we should have something tucked away as we never know what’s around the corner. Asking around the office gave us some different approaches. From the people that have standing orders set up to move money to their savings on payday, to those who “kind of just throw a little bit of cash in when it’s spare.” We weren’t probing enough to ask exactly how much people had stashed under their mattresses but we could work out that it, although it was a mixed bag, the majority of Team YourCash had some kind of savings system in place.
So here’s a question – how long would your savings maintain your current lifestyle if your income stopped? Well, someone has the answer…
A month.
That’s the average that a recent study by Legal & General suggests, anyway.
And if you delve into the details a little more, the picture actually gets a little bleaker.
- 22% of people surveyed said they had less than £500 in savings
- 26% of people said their savings would be cleared out within 7 days
- 23% said they had nothing at all in savings
That last one is particularly scary. Obviously the results vary slightly by region, with Northern Ireland being the most prepared. People there expect to get an average of 36 days out of their stockpiled cash. Wales fairs the worst with enough in their savings to last just an average of 26 days.
We can all think of circumstances where having zero savings would be particularly painful – so what can be done to get you on track to having comfortable cash-pillow to fall back on?
Start Small
There are a few ways to get your savings pot started. One is to start small and build up your contribution into your savings until you get to a sustainable level. The YourCash #UltimateSaver plan that we launched in January starts with saving just 1p in the first day with a 1p increase each day throughout the year. By the time you’ve saved £3.65 on day 365, you will have amassed £667.95 – not a bad start!
Audit Your Outgoings
Another way to build up a cash pot is to check how much you spend on a monthly basis. If you’re not happy with how much you spend on a particular area, reduce that amount and stash the leftovers in a savings account. If you manage to cut the cost on a few of your outgoings, you could end up with a tidy bundle of cash. We’ve previously rounded up some ideas of where you could make some savings which can be found here.
Literally Any Savings Method
It doesn’t matter what method you use to save, we just wanted to get some options out there and get your ideas flowing. If you can think of any novel ways that might inspire our followers, tweet us @YourCash and we’ll get your idea out there!
Let’s just hope that if the same survey is conducted next year, everyone can confidently say that they have a little bit stashed away. Good luck and happy saving!