Finance | Saving for the future
I read earlier that the average household in the UK saves around 10% of their income and this compared to Germany where they manage to save twice as much. In China they save an amazing 47% of their income but have no welfare state like us. How can you save when money is constantly devalued by the government?
It is difficult to save when the government creates inflation by printing money. The banks offer really awful interest rates too. It is important to save and invest for the future though. What do you think is the most important thing that we spend money on? Food? No, I think it’s water and housing. We can shop around for food but in the UK we just have to pay the water bill; unless you have a water meter. Energy to keep warm in winter is important but again we can cut down. You can wear extra clothing to keep warm and go out to a library and use someone else’s heating!
If you are careful with money, you should be able to save the average of 10% of your income. That would be around £200 a month for someone on average income, but a lot less for someone on a typical income of £1,300 a month. On that income if you save £130 a month, you can build up a nest egg for emergencies. You will have over £1,500 in 12 months time. If you can’t save that amount, perhaps you should ask why? Is your money going in interest to the banks or finance companies? Do you pay extra to tax your car for 6 months when it would work out cheaper to tax it for a year. Do you pay extra to pay insurance monthly? Do you buy a lot of goods on ‘interest free’ credit where the interest is included in the price?
If you can save some money, then you can begin to work on removing waste. That could mean paying off the credit card or loan. Paying the car tax and insurance yearly instead of monthly. You can also examine where the money goes and keep accounts. Do you really need to rent DVD’s or can you record programmes from Freeview? Do you really need cable TV? Do you really need gym membership when walking around the park is free and good exercise? Do you really need that takeaway pizza, when cheese on toast tastes just as good.
These are a few ideas, a few thoughts that might turn you into a saver. People save for the future and the future looks much brighter if you know you’re going to be better off financially.
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