Get savvy about saving with our useful tips and guidance.

Why save?

February 2009

Deep down, everyone knows they should save, but in recent years many have relied on credit instead. The consequences of borrowing rather than saving are plain to see in today's climate.

There are many good reasons why people save, but these are three of the main ones:

Save so you're safely covered for life's unexpected twists and turns, such as redundancy.

As a rule of thumb, it's wise to have savings equivalent to at least three months' wages. However, a survey last year found that the average person could only last 52 days if they found themselves out of work. This is based on average monthly outgoings of £1,445 and average accessible savings of £2,474. The survey also found that 36% of people had savings of £500 or less, meaning they would run out of money after only 11 days if they lost their job.

Save to create a lump sum for improving your lifestyle in the future.

You may not even know what it is yet, but there may be something that you will want to buy at some point that will add value to your life. For example, training that can help you earn more or simply something that lets you pursue a rewarding pastime. Either way, it's good to have something tucked away that you can go to.

Save so you can buy a particular item in the future that you can't afford right now.

This is the exact opposite to buy now, pay later - which was the prevailing attitude in the recent boom times. Wouldn't it be great to have money in the bank you can use to buy the thing you want without increasing your debts?

Try a savings plan

It's quite inspiring when you can see how much you could save by putting some money away each month - use this tool to quickly create a savings plan.