Think about saving once you’ve paid your main bills. If you find that you can do this, try to save at least 5% of your income – the more you’re able to save, the better.
There are three main reasons for adding money to your savings account: for emergencies (so money is available if something unexpected happens, like your car breaking down); to fund luxuries (a holiday, new car or gadget); to live comfortably in the future when you stop working.
The best time to add money to your savings is just after you’ve been paid. Set up a Standing Order on your bank account to automatically move some money to your savings account on, or just after, pay day.
The easiest way to get your savings working for you is to add a little bit each month to your savings automatically; you won’t have to remember to make the payment and you won’t be tempted to skip a month.
If you’ve got money left over at the end of each week or month, you can save this amount. If not, you can still save – it’s not easy to change how much money you have coming in but most people can change how much goes out.
If you save money regularly, you’ll quickly find that your savings add up and keep growing. Get into the habit and watch your money turn into more money.
It is important to work out your budget regularly for example, every six months to check that you are managing your money well, and to do a new budget each time your circumstances change such as moving house, going on holiday or if you lose your job.
If you have a negative bank balance and your outgoings include debt repayments, you can contact StepChange debt charity / National Debtline / Citizens Advice Bureau. They may help you reduce your repayments, transfer your debts to a better lender, or have a debt adviser who can help you.
If you have a negative bank balance, you need to find ways to increase your income (for example by working extra hours), and find ways to reduce your spending by looking again at your budget information and deciding which non-essential items you will spend less on.
If you have a positive bank balance, you have spare money available which you can use to repay debts (such as overdrafts or credit card bills), save regularly, or buy something.