Are you prepared for unexpected costs?

We all want to save some money. Ideally, we would all put some money away every month for the future. However, in reality, that can be much harder than it seems. Many of us now survive on a paycheck to paycheck basis, and when something suddenly crops up – a car that needs fixing, or a broken fridge freezer or boiler – it can put us in a challenging position with money. We all deal with financial issues like this in different ways – some of us borrow cash from family or friends to tide us over, some of us do our research on the impact of a secured loan on your lending profile, and others make cut backs in everyday spending.

Saving is always going to be a challenge if you are living on that payday to payday basis, but it is not impossible. It does involve some tight budgeting, lots of self-control and plenty of organisation and planning, but if you put some of these tips into practice, you will save some money to help cover those unexpected expenses.

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Separate your savings from the rest of the money

If your savings are lumped in with the rest of your money, they will be spent. The most important thing that you can do is to put away anything you save, even the smallest amounts in an account that you cannot easily access. This may be a bank account where you have to physically go into a branch with a book rather than being able to withdraw it from an ATM. If you do have a card for your savings, take it out of your purse and keep it somewhere safe so that you are not tempted to dip into it while you are out and about.

Save the pennies

When we think of saving money, we think of significant amounts of money, but really, any amount, whether it is £1000 a month or £10 a month will make a substantial difference over time. When we are only saving small amounts, it can be demoralising to see, but as long as it is going up rather than down, it is going in the right direction. No matter how small the amount you save, it will help you when something unexpected crops up. Every penny literally helps!

Consider skimming your bank account.

This sounds like something dodgy, but it is far from it!  It is the digital way of saving the spare change. Every evening, log into your online banking and check your balance – it is good practice to do this anyway to check for fraud or other issues. Take a look at the figure, and then round it to the nearest pound/five pounds/ten pounds. So, let’s say you have £56.56 in your account. At the end of that day, transfer 56p/£1.56/£6.56 to your savings account, depending on your budget constraints. As we said above, even the odd few pence here and there adds up, and you won’t miss it from your current account!

Take another look at your outgoings.

Almost everyone can cut back somewhere, even if they are on a tight budget. The easiest thing to do is look at your bank statement and see where your money is going. Do you really need Netflix, Sky AND Amazon Prime, or can you cancel them and stick to Freeview? Do you really need to buy that takeout coffee every morning on the way to work or can you take a travel mug made up at home? 

Even if you are on a tight budget, there usually are some small things you can cut back on to save money. Think about your food shopping; could you get more deals to save money or search for coupons and money off vouchers?

Check your insurance policies

Getting new quotes for your car/house/contents insurance can be tedious and time consuming, and it is far too easy to let them auto-renew. However, this is rarely the cheapest option, as the vast majority of providers increase your premium rather than decrease it. Once a year, sit down with your policies and get new quotes on them. Even if you can’t get them any cheaper, you may find you can get more for your money. It is just a case of spending a little bit of time looking and making a few calls. 

Even the most frugal of households will have areas in which they can save a small amount of money here and there to make those unexpected bills a little more manageable. 

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