It’s difficult to know where to start when thinking about saving money. It might seem like an impossible task or like you won’t be able to save enough to make it worth it. But it’s worth saving even just a small amount if you can as this could help you should an unexpected cost arise.
How to start budgeting and saving money
Start by reading our guide to building a budget to help you get a better understanding of your finances. Once you feel more in control, you will be able to see if you have any money spare each month, and if so, how much.
Open three bank accounts: one for your bills, one for your disposable income and one for your savings. Start small; save a few pounds a month to start with. Then increase if you can. Transfer what you can afford to your savings as soon as you get your income into your bank account. Then you won’t be able to spend it during the month.
Be kind to yourself. If you haven’t saved before, it might take a bit of trial and error to figure out what works for you. The most important thing is to give it a try.
How much should you save a month
In short, save as much as you can afford. Some experts recommend saving a set amount of your income such as 10–20%. If you can’t afford that, even just putting away a couple of pounds a month will help you save over time.
How much should you have in savings?
As a rule of thumb it’s recommended to have three months’ essentials outgoings in a savings account you can access instantly. This means if you lose your job or become ill and can’t work, you’ll have a three month buffer.
However, any amount saved will help you deal with unexpected events better than if you had nothing saved.