A quarter of us don’t have any money at all saved for emergencies. And that’s a precarious position to be in.
Just take a moment to think about how you would cope, without a rainy day savings pot, if you needed, say, a new boiler or some emergency car repairs, your washing machine packed up or your far-flung parents or grandparents were taken ill and you couldn’t find the cash for the air fare?
One recent survey reveals that 42% of adults only have a paltry £500 put aside. That might just about cover the car repairs, a new washer-dryer but what if you were to lose your job?
You see, the truth is that a rainy day fund isn’t just a “nice to have”, it’s a must have.
And here’s how to save when you really can’t afford to.
It doesn’t take huge sums or huge sacrifice. It’s possible to save at a pace that suits you. And the beauty of it is, that the sooner you start, the better off you’ll be.
Ever heard the saying “great oaks from little acorns grow”? Well that’s the basis of this simple way to save, even when you can’t afford to, in an - ahem - nutshell.
If you invest the same amount regularly - and this can be a small sum, you can invest as little as £50 a month into a Fidelity ISA - you will find you quickly reap the rewards. A phenomenon known as pound cost averaging, means that by investing regularly and steadily your money will buy more for you when prices are low.
Harnessing the power of pound cost averaging not only means that you take away the need to ‘time’ the market and save yourself the headache of working out exactly the best moment to invest, but you also even out the ups and downs that are a normal part of investing in the stock market.
It makes saving simple, and holding your nerve when markets look a little temperamental, a breeze.
I explain exactly how it works here
The value of investments and the income from them can go down as well as up, so you may not get back what you invest. If you invest in an ISA there is no capital gains tax on growth and no income tax on interest. The value of tax savings and eligibility to invest in an ISA depend on personal circumstances. All tax rules may change in future. If you redeem ISA holdings, you cannot reuse that ISA allowance. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.