Saving your way towards financial security
Debt Advice Now has urged people to protect themselves financially for the future, by putting money into savings.
by Andrew Taylor Thursday, March 08, 2012
Debt Advice Now is reminding people of the importance of having a savings pot to help protect themselves financially - whatever is around the corner.
The comments follow research by the Institute for Public Policy Research (IPPR), which found that 20% of low earners aged 16-29 wouldn't have enough money in their bank accounts to last a month if they lost their job.
Furthermore, although almost 66% of young people in this age group earning less than £21,000 a year said they want to own their own home, just one in five have more than £5,000 in their bank accounts and savings accounts - which makes putting down a deposit for a mortgage almost impossible.
However, putting money into savings wherever possible could provide a safety net for those times when people's finances are facing difficulties.
A spokesperson for Debt Advice Now commented: "The IPPR's statistics show that a worrying number of young people aren't financially prepared in the event that they become unemployed, which could quickly lead to even more financial problems.
"Putting some money aside every month could really pay off in the long run, and give you the peace of mind that should you suddenly end up out of work or face an unexpected monthly cost, you have the means to make ends meet.
"There are various approaches you could take to making a savings plan that works for you. Firstly, you should look at your monthly budget. Are there any ways you could realistically cut back on areas of your spending, and put this money into a savings pot instead?
"For example, you may feel you're over-spending on your food shopping, and would feel happy switching certain items to cheaper brands or keeping some out of your shopping basket altogether. Similarly, you may decide that travelling to work on your own by car is too costly - why not consider a car share instead?
"However small they may seem, making cutbacks and putting the money aside for a rainy day could provide that essential financial 'lifeline' when times are tight. If you look back to your financial past, there's every chance you've faced costly expenses out of the blue (repairing the boiler, for example, or paying for vets' bills) - and if you remember the pressure it probably caused, you'll likely want to avoid a repeat further down the line.
"Bear in mind that putting money into a high-interest savings account could also earn you a fair bit more in interest over time, and see your savings pot grow at a faster rate than simply keeping the money in a standard bank account. Having said that, high-interest savings often don't allow instant access, so it may be a good idea to keep an emergency instant-access savings pot too.
"Of course, if you're having debt problems, dealing with them first should be your priority - speaking to a debt adviser could help. Even if you have a large amount of unmanageable debt you're struggling with, an approach such as an IVA could help.
"Either way, it's important to get in control of your debts as soon as possible - if you live in Scotland, there are Scottish debt solutions available on this site."
Debt Advice Now specialise in helping UK residents address their debt problems, identifying the debt solutions that can help them repay their unsecured debts in a way that''s appropriate to their individual situation. For more information, visit the Debt Advice Now website at: http://www.debtadvicenow.co.uk Contact: To speak to Debt Advice Now, please call 0800 970 7673
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