No-one wants to get into debt and no-one particularly enjoys the prospect of putting their hard-earned cash aside each month to save, but, if you want to enjoy a debt-free existence, then you simply have to save up for it.
Your savings can come from anywhere, whether it’s at the supermarket checkout, in the pub or on household bills, you have to constantly review and analyse what you spend. Here are some tips to help you save and stay debt free.
Budget Properly
One absolutely essential tip for staying out of debt is making sure you know what you’re spending. You might think you’re pretty thrifty at the supermarket, but do your receipts back that up? According to a recent study by Skipton’s Financial Services, the average family of four spends £86 a week on food, so how does your spending compare to that? Each month, collect up all your receipts, sit down and work out what you’ve spent. Once you’ve added it all together, you’ll be amazed at how easy it is to carve out lots of small savings.
Prepare For Emergencies
Although most people get into debt over long-term investments like mortgages, some actually fall into debt when they’re forced to respond to an emergency. You could be forced to replace your car sooner than planned if it breaks down, have to pay for an expensive operation on a pet or have to fork out for emergency repairs to your home.
There’s no planning for eventualities like this, but you can be prepared financially if you put money aside and create an emergency fund to see you through eventualities like this. Without a back-up plan for emergencies, you risk being forced to try and borrow money quickly and could end up with a payday loan, where interest rates average around 1700%!
Automate Your Savings
It’s so easy to put off transferring cash from your current account to your savings that it’s pretty much on a par with deciding to skip the gym. So, take the decision out of your hands and set up a direct debit whereby a set, manageable amount leaves your account as soon as you get paid. It’ll be painful at first, but well worth it in the long term.
