The cost-of-living crisis continues to put unprecedented pressure on families. The impact is far-reaching, too: between February and May 2023, at least one in 20 UK adults reported running out of food and being unable to afford to buy more.
With some adults turning to charities and support networks, others try to ease the pinch by taking money out of savings accounts or entering credit agreements. There’s no right or wrong answer to alleviating money worries, but certain strategies could be more suitable than others.
Regardless of your approach to personal finances, it’s worth knowing about how you can carry on saving through difficult economic times.
Are people still saving money?
If you’re struggling to save money now, you’re not alone. However, with a proactive approach and some sensible, realistic planning, the situation could be more promising soon.
According to a recent survey undertaken by Leeds Building Society, 18% of people said they can’t save money anymore. But six in ten are still managing to put some money aside each month, and there’s more hope on the horizon. Findings from the same survey suggest that:
- Only 16% have dipped into savings to cover current living costs
- 23% are looking to save money for a rainy day
- At least 70% are aiming to save up to £10,000
Do I need to earn more money to start saving?
The survey by Leeds Building Society pointed out some significant income splits. Those earning between £30,000 and £39,999 were the least likely to find their savings habits affected by the current cost-of-living crisis.
Given that the average household disposable income in the UK was £32,300 last year, it’s easy to see why those on a lower income are now struggling more. Prices continue to increase, and wage growth remains slow in most areas.
How can I save money through the cost-of-living crisis?
- Set a realistic budget
Budgeting is sensible, but only if you can stick to it. Work out your monthly incomings and outgoings to set yourself limits in every area. Think about insurance costs, fuel money, and the extra food you like to buy from restaurants before setting a low budget.
You could always set a ‘buffer’ if you’re not sure how much you’re going to spend. Keep some money aside and aim for the first figure, but don’t worry too much if you exceed it.
- Open a savings account
Opening a savings account will encourage you to make better use of your pay. Make sure you can afford it first, but choosing a fixed account means you won’t be able to withdraw the money without a fee, which could incentivise you to save more.
No matter whether you’re working towards a specific goal or if you’d just like to put some savings aside for another time, fixed rate bonds could make an excellent way to put away some money.
- Keep working hard
It’s tempting to jump ship in the hope of better pay, but staying put could reap more rewards. Depending on your employer, look for opportunities to progress within the company you work for now. And if that’s not possible, there’s no shame in seeking extra work.
If you have the time and resources, do whatever you can to provide an extra form of income if your current wages leave you unable to save.
Don’t forget that if you’re in an urgent situation, help is still available. Through the UK Government and organisations like Citizens Advice, you can find free and confidential advice, services, and resources.