In a recent survey, Blackrose Accountants found that 60% of tenants did not have £1,500 in savings.
Asked if forced to move properties next week due to an emergency and pay £1,500 to cover the cost of rent, deposits and bills at the old and new property, the majority of tenants living in shared accommodation said they did not have that much savings.
The groups that were least likely to have savings were single men and families with children. As you would expect families with children have a higher monthly spending on essential things like food and nappies. Also there have a higher expenditure on one off items like toys and clothes. This means over a long period this group find it difficult to save.
Low savings amoung males
As for single males, the main reason for not saving was lack of discipline amongst the younger men but many of the older men had financial responsibilities to supporting wives and children.
As savings are the difference between how much you earn and how much you spend here is a simple five step plan to help you start saving money and building a pot to cover emergencies.
Step 1 – Take stock of spending
Take stock of your spending. It is important to know exactly how much you spend each month and on what. An easy way to do this is to use your bank debit card for all your spending rather than cash. This way you can review your statement at the end of the month and work out where your money has gone.
Step 2 – Categorise into essential and discretionary spending
Group your spending into two categories – essentials and discretionary. This is where you realise how much of your monthly spending is discretionary and therefore can be reduced if you are committed to saving.
Step 3 – Reduce discretionary spending
Start reducing your discretionary spend. Target either a fixed amount per month such as £200 or choose a percentage which you are comfortable with like 10% or 20%. But remember to be realistic.
Step 4 – Put cash saved into a separate account
Put the savings into a separate account. It is important to put your saving somewhere you don’t have easy access to like in a deposit account in the children’s name or with a family member you can trust. Remember, you need to be able to access the money when you really need it. so don’t lock it away in an illiquid asset.
Step 5 – Increase your income
Last and probably the most important, find ways to increase your income. Develop multiple active and passive income streams will allow you to generate more income than your current spending.
Blackrose Accountants are specialises in providing bookkeeping, accountancy, taxation, payroll services and business development and advisory services The areas we cover include
- Wembley
- Brent
- Willesden
- Harrow
- Kingsbury
- Kenton
- Pinner
For a free consultation contact us at
Blackrose Accountants – Wembley, Harrow, Kenton
- Croydon
- Thornton Heath
- South Norwood
- Crystal Palace
- Selhurst Park.
- Beckenham
- Streatham
For a free consultation contact us at
Blackrose Accountants – Croydon, South Norwood, Thornton Heath
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