A study by the Money Advice Service (MAS) found that 16 million people in the UK have savings of less than £100. The MAS said that the findings were worrying and presented a particular challenge for low earners. The results further raised the question of whether the poor level of savings is as a result of low incomes or whether people do not know why and how to save.
Why people fail to save?
According to Nick Hall, a money expert at MAS, “for some with low incomes, savings is a real challenge as they may simply lack the income needed to save”. However, the research also shows that some people on low incomes do save money. Roughly, a quarter of adults with household incomes below £13,500 have more than £1000 in savings. And 40% of people in that income bracket manage to save something every month.
This finding is both reassuring and encouraging to UK residents, to save a share of their income every month.
What are some benefits of saving?
- It is less stressful
Having to keep your spending on hold until the next pay cheque comes along, is disruptive and inconvenient. A repeated monthly dose of anxiety and anticipation, may lead to health conditions like insomnia and heart problems.
- It makes you happier
Achieving a saving target leaves you feeling great. Whether the saving is meant to buy something for yourself or surprise a family member, it is always a delight.
- It is useful for unforeseen emergencies
While we take precautions against disasters, they do sometimes occur and you need money immediately. So, if you save, you will feel safer.
What are some simple tips to save money?
- Record your expenses
Have a written record of all your spending in a month, this will give an idea of how much you spend in a month and how much you can save.
- Make a budget
The purpose of your budget is to help you balance your spending with your income towards saving. Find more information about creating a budget.
- Choose something to save for
Have a short term and long term goal for the money you are saving.
Do you have any other suggestion? Feel free to leave a comment below.