Brits aren’t saving enough for tomorrow, let alone retirement.
That’s the takeaway from the Financial Times’ disturbing report on U.K. savings rates, which fell to 3.3 per cent in 2016. That’s lower than at any time since 1963, when modern record-keeping began.
How does your savings rate compare? Are you stretching your paycheque far enough to cover everyday expenditures and prepare for whatever the future might bring?
There’s always time to catch up. If your paycheque isn’t going as far as you’d like, adopt these seven commonsense strategies to get more value for your money.
1. Begin Saving for Emergencies
According to experts interviewed by BBC Magazine, the ideal emergency savings fund is suitable to replace six months’ income. Of course, for middle earners, that’s tens of thousands of pounds. If you don’t have a substantial savings cushion today, you’ll likely take years to put away that kind of money.
No matter. Start small, keep at it, and resist the temptation to touch your emergency fund in any situation other than a verifiable emergency.
2. Work With an Experienced Financial Advisor
Financial advisors aren’t merely for the well-to-do. When looking at investment advisors, try to find one without obvious conflicts of interest and choose the firm that seems best suited to your needs. Even if your liquid assets are modest, it’s never too early to begin investing for life’s major purchases: buying a house, welcoming a new child, retirement, or all of the above.
3. Get a Flatmate
No flatmate is perfect, but even boring, messy ones help pay the bills. Don’t pay another full month’s rent without first putting out an advert. Who knows: perhaps your new flatmate won’t be so bad after all.
4. Live Car-Free
Unless you live in a country house far removed from public transport lines, living without a car is easier than you imagine. On the rare occasions when you do need a private ride, hiring a carshare should be well within your means.
5. Become a More Confident Cook
Even a modest kitchen is suitable for the average home cook. Start simple, using straightforward recipes from cookbooks or family members. Buy ingredients in bulk whenever possible to cut down on input costs, and remember to make enough to supply lunch the following day. Cutting out weekday takeaway lunches will really trim your food budget.
6. Shop Around for the Best Deals on Recurring Expenses
You’re probably paying too much for your phone, Internet, insurance, and other recurring weekly or monthly obligations. Use trusted online databases to sort through the best deals on these unavoidable expenditures. Sometimes, simply threatening to switch insurance or mobile providers is enough to secure a better-than-advertised deal from your current carrier.
7. Use Less Energy
You don’t have to sell all your possessions and live in the wilderness to reduce your carbon footprint and reduce your electricity bills. All you need do is make sensible, mindful lifestyle adjustments, such as turning off lights when you leave a room, unplugging appliances when not in use, and using a “smart” or programmable thermostat. By some measures, such simple adjustments can reduce your electricity usage by 15 per cent or more — a good deal for the planet and your wallet.
Financial Freedom Is Within Reach
If you follow these seven money management tips, you’ll find yourself well down the path to financial freedom. Moving forward, persistence is key. The moment you let down your guard and allow yourself to slip back into unhealthy financial habits is the moment you cede control of your fiscal destiny. You owe it to yourself and your family to keep on.