Why bother to save?
March 2009
Why bother to save, when spending is so much more fun?
It's very tempting to shut your mind to the irksome task of paying off your debts and putting some money aside.
The only convincing argument for saving is what will happen if you don’t. Do you really want to live in rented accommodation all your life? Do you warm to the prospect of poverty in old age? Are you happy to put up with second best?
It’s hard work. Easy enough to open a bank account perhaps. But much harder to put a regular sum into savings every month. It all seems to go so slowly at first. But after a while you’ll find you get used to it and you will get quite a sense of satisfaction regarding the little pile you’ve built up.
Best of all, the bank pays you money, not the other way round.
Set yourself a target
The easiest way to get started is to have something to save for. It could be an exotic holiday or a new car. Instead of taking the easy credit option, why not just start saving?
Saving for emergencies
It’s generally reckoned that you should have at least three months’ salary on deposit, where you can easily get your hands on the money in an emergency. This will help to cover you if you lose your job and is always handy if you need something around the house. If you do dip into the money, don’t forget to top up your savings as quickly as you can.
Saving for a deposit on a house
The days of 100% are over so you have little choice but to save for a deposit on the home of your dreams, and borrowing less. In fact this could save you thousands of pounds in the long run.
Saving for your children’s upbringing
When you’ve got a mortgage you’re already carrying quite a bit of debt. But, assuming you’ve budgeted carefully, you should still be able to put some money aside for your children’s education, or even just for school trips and holidays.
Saving for retirement
Retirement may seem a long way off. So you may find it hard to get started. But start you should and start today. Say you wanted to retire on half your salary, how much must you save?
Please visit our Retirement feature for more information.
