You’ve probably heard people say that you should have a rainy day fund, or some emergency money, just in case. There are countless articles out there on the importance of this money, and how you should start to build your own fund.
They are all right, of course. You never know when you might have an unexpected expense. When a car might break down, or your boiler might stop working. It would be lovely if life always just carried on, and all expenses came with a significant warning, but they don’t. Things happen.
But that doesn’t mean that it’s easy. If you are skint or wondering do i have to pay mortgage and child maintenance payments, you might not have much to set aside each week. You might struggle to cover your bills, let alone save extra. So, how do you start to build a rainy day fund when you are skint?
Build a Budget
A household budget should be your first step if you are looking for ways to save. So many of us are living paycheck to paycheck, but still spending without really knowing what is going on in our bank accounts. Building a household budget helps you to take control of your cash flow.
Clear an afternoon, take a good look at your bank statements and payslips, and start a really simple spreadsheet, including all of your income and expenses, even luxuries and non-essentials. Taking control like this helps you to understand where your money is going.
Cancel, Switch or Negotiate
Now, look at your budget. Are you spending more than you need to? Spend some time cancelling any contracts that you can do without entirely and reducing others. Do you need a multi-screen Netflix account, or could you save a few £’s a month sticking to one screen at a time? That’s money that you can save.
Then, look at making some switches. Could you save money by switching utility providers? If not, negotiate. Ring your providers and tell them that you are thinking about cancelling; they may offer you a better deal.
Make Some Shopping Switches
Food is something that we can’t do without. But, it may be something that you could save money on. Switch to a budget store, start buying own-brand products and try cheaper versions of all of your favourites. If you were spending £80 per week, and now you are spending £70, that’s £10 that you can save.
Apply for What You Are Entitled To
So many people that are entitled to benefits aren’t claiming them. Sometimes, out of pride, and sometimes because they don’t know that they can. Look online and use calculators, even if you can’t get anything, you don’t lose anything by applying.
Focus on Debt Repayment
If you’ve got debts, they are costing you money. You might be paying monthly fees and interest, which stops you from saving. Do you need to? Could you pay a little extra off, or switch to interest-free accounts?
Remember, Every Little Counts
Savings don’t have to be huge. You don’t need to be saving hundreds a week. Even those tiny little savings start to add up. So, do what you can.