By Gregg Potter from Leeds Credit Union
Life has a habit of throwing us all an unexpected curved ball – usually when we’re least expecting it: the boiler goes on the blink in the middle of winter; the car gets a flat tyre; or the kids have shot up in the summer holidays and need new school uniforms (usually only noticed the week before the holidays end!).
If you have some savings, these may just be a minor inconvenience, but for many credit union members it can be a different matter. For those that don’t know, credit unions are the unsung and unknown third financial institution, usually serving financially excluded and financially vulnerable people, by providing simple savings accounts, as well as affordable loans. They often don’t have savings and when an unexpected expenditure comes up, may have no choice but to use a high interest lender or even an Illegal money lender – known as ‘loan sharks’.
We always encourage our members to save a little, even if it’s only £5 a month, to begin to build a financial safety net. Just a few hundred quid in an easy access savings account can make all the difference, in many cases meaning you don’t have to use expensive credit or, as we find with many of our credit union members, go without.
A small regular amount can build up quite quickly and it doesn’t necessarily mean you have to make big sacrifices to save:
- Making your own coffee and using a reusable cup just one day a week rather than going to a coffee shop could mean you have £20 a month to save.
- Joining one of the increasing number of supermarket loyalty schemes could save you another £20 a month on your weekly shop.
- Always check what you’re paying subscriptions for – have you really used that gym membership for the last few months?
- Although less of us use cash these days, each day put your loose change in a jar and add it to your savings each month.
- One thing we always suggest to our members who have been repaying a loan is once the last repayment has been made, keep paying the same amount into a savings account – that way you don’t miss it.
- Lastly, if your employer offers a payroll savings scheme, take advantage of it. By doing this your savings are automatically added to every time you get your wages and you’re not tempted to spend the money.
Before you know it, you could have freed up £50 or more each month – that’s at least £600 a year. It may not be a large amount, but it can go a long way to smoothing over those bumps!
