With all the cost necessary expenses becoming higher and higher, saving money is important to buttress yourself against the increasing cost of living. Having savings set aside or committing to saving, no matter how difficult, will help safeguard you in times of financial stress. We have some tips below to help you.
Saving for the Unexpected
In order to be prepared for the unexpected expense, you need to have a savings or “Rainy day” fund built up to avoid financial stress. You should aim to set aside a % of your household income aside each month to fund future expenses. Financial experts usually recommend that you have savings of at least 6 months’ worth of expenses to cope with financial upheavals in the market. If you are saving for a mortgage, then you may have to save a lot more than this in order to build up a deposit. of 6 months expenses.
Developing Savings Habits
The habit of regular saving is vital for planning for the future and becoming financially independent. Many financial experts recommend having a savings ratio where you save a certain amount if money each month e.g 5 or 10%. This allows you to plan for short-medium term expected expenditure such as back to school costs or holidays.
Saving for the future
When one considers savings, many forget to save for the future and when the future arrives, they are unprepared. Regular saving with the future in mind as well as continually building that savings balance can help households cope with future expenses without needing external assistance. This could be saving for a future house insulation upgrade, pension planning, saving for a mortgage or saving for a wedding. Determine your long term savings goal and try and dedicate a bregaulr saving amount each month to it to support your rainy day fund.