The Guardian Online recently published an article on the importance of having a pot of savings to help guard against debt. Whilst a study showed that £2,000 would be the ideal amount to keep aside in savings, even £200 would help reduce the risk of experiencing financial difficulties. They acknowledged that saving even £200 can feel impossible to those struggling to make ends meet, however, there are some simple steps everyone can take to make every penny work harder for you:
- Earn interest when you can: Don’t let money sit in a current account earning no interest. Move it into an interest earning savings account for the days and weeks that you don’t need it so that it earns interest for you, then transfer it back into you current account as and when you need it.
- Save little and often: Lots of banks let you round up any spending, usually to the nearest £1, and put the difference in a savings pot. So if you spend £2.80, you will be debited £3.00, of which 20p will go into your savings account.
- Consider a Regular Saver account: Many banks offer a high interest rate for a savings account where you can pay a limited amount in every month, as long as you have a current account with them.
- Help to Save Scheme: There is a government-backed savings account called Help to Save that lets people on a low income get a bonus of 50p for every £1 they save over four years. This account is for working people receiving universal credit.
GMMAP are also here to help if you need advice or help with any problem debt. Getting in touch is easy. You can find your local office here.