Save to see yourself through a squeeze

Don’t have an emergency fund? Vicky Shaw has some expert tips to help you build up that allimportant savings pot

If you found yourself in a sudden tight spot, do you have a pot of money set aside to see you through the squeeze? Nearly half ( 45%) of adults throughout the UK don’t have an emergency savings safety net, according to a new survey.

Sarah Coles, a personal finance analyst at stockbroker Hargreaves Lansdown , which commissioned the research, said: “People of working age should have three to six months’ worth of expenses in an easy access savings account for emergencies.

“Our calculations show that this means having at least £3,000 in savings for the average single person.

“And that just covers the bare minimum: If you don’t want to be forced to make harsh cutbacks in a crisis, you should have at least £6,000.”

Building up a savings sum like that isn’t easy for everyone, of course, especially if your day- today budget is already quite tight.

The financial impact of Covid- 19 has stretched many household budgets even further, making it even more difficult.

But could there still be ways to save and set aside that all- important safety net?

To get started, here are five tips from Ms Coles for working towards that crucial £ 3,000 safety net and beyond...

1. Work out where all the money is going

Some banking apps will break down your spending for you. Otherwise, keep a diary of everything you spend over a few of weeks and check your bank statements to see what your bills add up to.

2. Put it in a budget planner

There are several available, but the one on MoneySavingExpert is a good place to start. Take all the spending information you have and put it into the planner – alongside your income. It’ll show you how much you’re overspending by, and how much you need to cut your costs in order to free up a lump sum each month to save.

3. Focus on cost-cutting painless

The easiest ways to cut back are painless – so shop around for cheaper bills, consider trading down to a cheaper supermarket, and cut spending or subscriptions you don’t value.

Then you need to make some slightly more painful decisions about spending on luxuries you don’t really need.

4. Set up a direct debit Savings contributions should go straight out of your current account on payday, before you can spend them. Set them up to go into a competitive easy access savings account.

5. F i n a l l y, d o n’ t overwhelmed

A sum of £3,000 can feel like a huge target, but don’t let it put you off. Save whatever you can afford, as soon as possible, and make a note to revisit it each month.

If you find that you’re not even noticing the cash you put away, see if you can squeeze a bit more out of your budget, and put a little more aside each month.

Small changes will soon add up. be

SAFETY NET: Nearly half of adults in the UK don’t have emergency savings set aside, according to a new survey.