Savings are probably the last thing on your mind if you are on your last pound and payday is still a couple of days away. Many people in the UK find themselves in this situation, relying on benefits or emergency loans for extra cash in case of a medical emergency or a boiler breaking down in the middle of winter.
At the same time, many online financial advisors will suggest that you have an emergency fund that helps you through difficult times. However, that’s not easy to do when you can barely get your paycheck to last you through the month.
If you’re in a similar situation, you might be wondering if there’s a way you’ll be able to get out or if you’ll always be stuck in this endless loop of only surviving from one paycheck to the next.
Today, with fintech innovations and an accessible credit market, you can find some of the best lenders for emergency loans, which is one way of navigating a financially challenging situation.
However, there are also alternatives you can consider if you aren’t ready to borrow just yet.
In this guide, we will explore these alternatives and provide you with strategies to manage your emergency more effectively, reducing stress.
Table of Contents
Why Saving Feels Impossible Right Now
The cost of living in the UK has gone up across all utilities, including rent, groceries, childcare, and transportation. Unfortunately, for many people, their paycheck has not increased at the same rate. What this means is that your expenses are claiming a bigger slice of your paycheck, and that makes it even more difficult to set some money aside.
That said, living paycheck to paycheck doesn’t mean you need to save hundreds of pounds each month. It only means you find small but consistent ways to help you create a breathing space for yourself. If you could keep one pound for yourself one month and each month add a couple of pounds to it, you are still making some contribution to your savings.
These few pounds of savings could really help you if you suddenly need money for groceries or a minor emergency.
How Do You Actually Save?
There are a few steps you can take to make sure that you can give yourself some breathing room. They are:
Step One: Knowing Where Every Pound Goes
This might sound like a cliché, but it’s important to get the basics right. If you don’t know exactly where your money is going, you might not be able to detect patterns and find ways to change them.
You can use various methods, such as writing down your expenses daily, using a banking app, or keeping receipts. You can choose a method that works for you; it’s just important to have a system.
Step Two: Rethink Your Essentials and Luxuries
Many pieces of advice will ask you to cut down on luxuries, but you might already be doing that. When you’re barely surviving, it’s not usually because you are frivolously spending.
You could instead try switching supermarkets for a cheaper alternative, or try saving energy by unplugging appliances when not in use and washing clothes at 30°C. This step is all about shaving small amounts of money from your essentials.
Step Three: Separate the Savings From Spending
One of the hardest parts of saving money is that your savings and spending are often in the same account. So, if you find yourself running low, you will not hesitate to dip into your savings.
It helps if you separate them. Open a basic savings account and set up automatic transfers so that your savings don’t get mixed with everyday spending.
Step Four: Prepare for Predictable Expenses
Some emergencies are not really surprises if they happen every year. For example, we know winter brings higher heating bills, and that your car needs an MOT every year.
If you have children, they need new uniforms in September. Instead of waiting for these costs to arrive at your doorstep, you could save for them each month in separate pots. So that when the bill comes, you will feel a little more prepared.
Step Five: Increase Income Where Possible
We understand that not everyone has the capacity to take on more work. That said, even a few extra hours a week can provide you with the buffer you need to start saving.
You don’t need multiple jobs. You just need enough part-time or freelance work to help you add more money to your savings.
Final Thoughts
Living paycheck to paycheck is exhausting, and when you’re calculating every pound you’re spending, you probably don’t have enough resources to find ways to save money. It’s challenging to save money under these circumstances, but it can be done by taking small and consistent steps.
Even if you start small with a single pound, you’re still taking a step in the right direction. You’re proving to yourself that your money isn’t always in control of you. That’s the foundation you need to build a future that is more about stability and less about survival.
