Amid the living cost crisis in the UK, people are struggling to see a positive outcome of using time-honoured budgeting tips. You will probably not feel a pinch in your pocket as if now, and you most likely know the reason, but the crisis is harming the buying power of people, and soon you may find yourself belonging to the crowd of those on a low-income.
When you feel something wrong with your finances, you are supposed to put your finger on it. Amid the crisis, financial experts’ suggestions are not going to back you, so now is the time to go back to the basics. Priorities keep changing life, but budgeting and saving will always be your priority.
The most important thing is to analyse the way of doing so, bearing the current scenarios in your mind. There are some new tricks to save money.
New ways to set aside money when a living crisis bites
Thankfully, the following tips can help you get a grip on your money amidst a crisis.
1. Find an accountability partner
You often have a tendency to put off budgeting and saving as part of you cannot put up with the damaging effect of your misdeeds on your money, but unless you take charge of your finances, how will you be able to bounce back?
Just take a pledge that you do not repeat those mistakes. However, some people do not have this reason for keeping them from not taking it seriously. They lack the motivation to do so. Well, if you are one of them, you should find an accountability partner.
The fear of letting someone down will help you keep going. You can approach a friend of a group of friends where you all discuss money issues and brainstorm what you can do to deal with them.
Try to keep one day for this activity. Of course, an hour will be enough to complete a session. People are seen putting off little money problems, but when you have a dedicated space, you will likely be able to discuss those issues to turn a new leaf.
Inspiration from others will fill you with motivation. You will likely see in yourself new energy. Instead of being afraid of discussing money, you will find more and more chances. You will also know different ways of dealing with money problems. Such gatherings cannot be less worthwhile than advice you get from a financial counsellor.
2. Save before you get your paycheque
Affordability is not just the only factor that keeps you from building a safety net. Often, it is procrastination. Savings are often associated with retirement funds. Suppose your company does provide you with a workplace pension. In that case, you contribute a considerable amount of money that you are left with little or no money for meeting the emergency cushion.
It is worth noting that emergencies can crop up at any time, and the money you contribute to your pension cannot be utilised for that. Due to a lack of accessibility to a safety net, you are compelled to take out loans for people with bad credit, which may sometimes be another turn of a screw. This is because interest is an additional burden on top of the principal.
You did not have enough money to cover the cost, and now you have taken on the interest burden. Along with a workplace pension, you should have a safety net that allows you immediate access in an emergency. Some companies have come up with an automatic savings trial aiming to pull £40 to £50 from your wages and move them to an accessible cash savings account.
This is helping employees to have an emergency corpus growing without making an effort. However, if your company does have this facility, you should try to transfer a fixed amount of money from your payment account to a savings account when you receive your paycheque.
The savings account should be easily accessible so you can dip into funds as and when an emergency pops up. However, do not use these funds for any general expenses. If you have taken out a loan, you cannot use the savings for the payment of this debt as this is an essential expense. Use your easily accessible savings account only when you are caught unawares by an emergency.
3. Set your own savings challenge
Take up a savings challenge even if you want to be more rigorous. You should try to put in a fixed amount of money every day just as a part of your daily routine without aiming at its growing size. Deciding the set limit seems to be a severe challenge for a lot of people, especially among those who are living paycheque to paycheque.
Well, you can still challenge yourself by salting away £1 every day. You will have put by £30 monthly and annually £360, and if you are earning a good amount of money, you can use the method of setting by £1 on Monday, £2 on Tuesday, and £7 on Sunday.
You will have saved £28 weekly, which amounts to £1344 annually. If you are living paycheque to paycheque, look at your budget to see if you can adjust your expenses. Try to cut back on your discretionary expenses. You do not need to be harsh.
You just have to find a wiggle room for stashing away £30 every month, £1 per day. Of course, this does not seem like a lot of money, but it will probably help you avoid borrowing money every time you encounter an emergency. If you still need some money, you can take out a loan for poor credit with no credit check.
Having a little rainy-day fund is always better than having no money at all. Try to open a separate savings account and link it to your payment account. You can choose an auto-debit option so you can free yourself from moving a set amount of money from your payment account to your savings account.
If you are following a savings challenge of stashing every day £1, you can do it manually. Just take an empty wallet and pop money into it every day, and at the end of the month, deposit it in your savings account. However, take a pledge not to dip into these funds unless an emergency crops up.
The bottom line
Amid the living cost crisis, many people struggle to keep the wolf from the door. It does not seem to be recouping very soon, but you can still maintain your financial health by sticking to the budgeting and saving methods mentioned above. Traditional advice given by financial experts cannot be ignored, but sometimes you may need to invent new ways to keep going.
Regardless of your financial condition, you can never stop budgeting and saving money. Life will never stop throwing a curve ball, and you must have easy accessibility to a cash reservoir that you can exclusively use during emergencies. You should never stop stashing away, even if you are on a low income. Setting aside £1 every day can even amount to a lot of money – after all, many a little makes a mickle.
