Having money in your pocket today is great. We all love the feeling of the folding stuff and knowing we can go out and spend it on anything we want, without having to worry about not paying the utility bills or having the electricity cut-off.
But what about the future? What will the situation be in 10 years, 20 years and even 30 years? Will you have the savings in place to warrant spending money today like it’s going out of fashion, probably not, especially if you never put any money aside for the inevitable rainy days.
Thinking about what the future holds for us is scary, especially when we are all expected to work longer and provide more for ourselves when it comes to housing and medical care. No longer will the state be as generous as it has been. This is why we have to plan for the future and make sure we have enough money tucked away to ensure we are comfortable in our old age.
You Never Know What’s Around the Corner
A cliché? Certainly, but it doesn’t make it any less true. Saving for rainy days is just as important in the short-term, and here’s an example of why it’s important.
In the past six weeks I have replaced two tyres on my car and I’ve had a new starter motor fitted. This wasn’t done through choice. Total cost – £450. Dipping into my rainy day savings enabled to me to quickly get back on the road and avoid commuting to work on public transport.
Here are a couple of suggestions to help you on your way to saving for the times you need money to fall back on:
Savings Account
Get yourself a bank account just for the purpose of saving money. Saving £10 a week equates to £520 a year, that’s £5,200 every 10 years and in 30 years it’s £15,600 (assuming you never touch it). If you setup a monthly standing order for as much as you can afford, you will soon see the balance of your savings account increasing.
Cut Back
If you think you don’t have enough money to start saving then you should look at your everyday spending to see what you can cut back on, and when you do this, look at the big picture.
If you buy a coffee on the way to work, it may only cost £2.00 a day, but that adds up to £10 a week, £40 a month and £520 a year (assuming you never take any holidays!). If you have a couple of take-aways and a few bottles of wine each week, cut-back to one take-away (or better still, one a month) and a couple of bottles of wine a week and save the money you would have spent.
Everyone is different, look to your own spending habits to see where you can save money. After a few weeks of doing so you’ll find the numbers will soon start adding up and the rainy day cushion becoming much more comfortable.
Photo: Images of Money
