Task 2: How can I save money for a rainy day?
Why should I care about having savings?
We want you to thrive, not just survive.
That means you need some cash to fall back on in an emergency. Like car repairs or a vet bill.
And goals give our lives meaning. A savings target gives you something to work towards. It feels good to pay with money you saved instead of putting it on a credit card.
Most importantly, by saving money you are ‘buying’ yourself peace of mind. You know you can cover costs without putting your budget at risk.
Now we know the ‘whys’ of saving, let’s look at the ‘hows’…
1. Pick a goal
Putting money towards your goals makes them more ‘real’, which can positively effect on your life. Your goal could be anything, like:
- Saving up £50 for a new winter coat
- Saving up £100 towards Christmas
- Saving up £250 in case your washing machine breaks
- Saving up £500 to buy a pram for your baby
Starting small is fine. Even saving just £1 a week gives you £52 in a year. That is not to be sniffed at.
2. Commit to saving an amount of money each month
You may have seen where you can save money when you built your budget on Day 3.
Put these savings aside each month.
For example:
- Switch to a cheaper supermarket: You could save £5 a week on food. £5 x 52 weeks is £260
- Cancel a £40 gym membership: You could save £480 over 12 months
- Cancel your £50 satellite subscription and switch to Freeview: You could save £600 over 12 months
On Day 5, we talked about earning extra money. You could put that aside too.
Make sure your saving goal matches what you can realistically afford after living costs and household bills.
3. Give your savings a home of their own
Keep your savings separate from money you spend on daily living costs.
You could:
- Set up a basic bank account: Pay your savings in each week by Standing Order
- Use pots in an online banking app
- Put your savings in a jar and watch them grow
4. Upgrade your growing savings pot
Once you have saved up a chunk of money, look at how to make that money grow.
Phew! We have covered a lot these last few days. Tomorrow is the final day of your 7 Days, 7 Ways journey.