3 easy steps to save on a low salary
Most of us are aware that we should have about three months of savings accessible for emergencies. However, according to Finder.com, one in three Brits has less than £1,500 tucked away. The problem with this is that it makes us unable to handle unexpected expenditures, which often lead to us reaching for expensive credit. And, as most of us pay the minimum amount on our credit cards every month, we end up paying three times the amount we spent, making the banks richer and us poorer.
Sadly, but not surprisingly, the worst age group when it comes to saving money is 22-29-year-olds, with 53% having no savings at all. People in their 20s are new(er) to the workforce, have had less time to accumulate savings. Additionally, this age group is vulnerable to influence from social media to spend on expensive holidays, clothes and cars.
Why should we prioritise building an emergency savings pot? Being able to pay cash for unexpected emergencies empowers us and makes us more financially independent. It also helps us grow our money rather than wasting it on high-interest credit.
A better financial future depends on making better financial choices today. 40% blames low earnings for their lack of saving. However, even saving one per cent of your income will make a difference.
Let's say your income is £22,000 a year. That is £17,135.84 net. Saving one per cent adds up to £171.36 a year. Saving in a high-interest savings account will accelerate the growth considerably. Some banks offer up to 5% AER if you tie the money for e.g. 12 months. At this rate, and saving only £14.28 a month, it would take you seven years to reach £1,500.
However, saving only £58 per month would get you there in only two years. I believe anyone can save £58 a month. Keep reading for three easy adjustments that will help you save your way to financial freedom!
1. Revise your subscriptions
So many of us have numerous subscriptions that cost money every month. You don't need HBO, Netflix, Amazon Prime, Spotify Premium, extra cloud storage AND Glossybox.
Cut one and save £10
2. Introduce one walking day a week
Get those steps in! Fresh air over sweaty tube carriages.
3. Bring a packed lunch
Packing your own lunch can save you a small fortune, and get you in control of what you eat. Uninspired? Check out @thefoodmedic and @deliciouslyella on Instagram!
Bringing in lunch one day a week can save you £27
Monthly savings: £58
There you go! Three adjustments anyone can make and stick to, that will get you on track to financial independence on a modest salary.