Why you should be saving £3 a day
Are you living on the financial edge? If so, it’s time to take action now.
Why you should be saving £3 a day
An interesting article appeared on line recently which really hits the nail on the head.
With all the talk recently regarding pay day loan companies cashing in on peoples hard luck, or is it their inability to manage their finances,
A third of us are living on the financial edge with no savings whatsoever, according to new research by the Money Advice Service.
Yet over two-thirds of us faced unexpected costs last year, having to find an average of £1,101.
The three most common unexpected costs were: car repairs, optician’s bills, and technology that needed urgent repair or replacement.
Worryingly, a quarter of us would either have to get into debt or increase our debt if we were hit by unexpected bills.
And, unless you can rely on family or friends, getting hold of a decent chunk of cash fast will cost you.
Financial expert Andrew Hagger of moneycomms.co.uk worked out that the cost of borrowing just £400 varies by nearly £130, depending on whether you have a cheap credit card or have to resort to a payday loan.
So what should you do? If you could save £3 a day x 365 you would have the money to pay the average unexpected costs.
Put the money in a cash ISA or high interest bank account, one without a bank card so you are not tempted to spend it.
Once you have built up a reasonable emergency fund you could take it to the next stage.
How much will your next holiday cost? What would you need to put away.
How about your next car in 5 years’ time could you budget for it now and never need to borrow again.
If you invest your money in the right place depending on performance you may not even need to save the full amount.
Have a good look where you spend your money, where could you save?
Skip having that extra coffee, take a packed lunch, car share, there are all sorts of ways.
Are you paying too much for your mortgage, could you get your life cover cheaper?
Is your pension in the right place?
Talk to an Adviser get a financial health check.
Until the next time Paul Hoskin at Hoskin Financial Planning.
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