Saving for the long term and the short term is a real financial skill and one encouraged by Enable’s experienced IFAS in Bishop’s Stortford. But it is also important to make sure you have an emergency savings fund. One that can get you out of trouble if the unexpected happens.
Whatever you are saving for it can be a good idea to set yourself a target. Setting a savings target right at the beginning will give you something to aim for and a better chance of achieving your goal. But it is also important to make sure your target is realistic.
The bottom line for many is that you should try to build up a savings pot of at least three months’ salary, so you’ll have enough money to cope if you lose your job or suffer some sort of emergency. In an ideal world, it would be better to build saving that would be able to cover your outgoings for at least six months, if possible.
It can seem like a lot of money and you have to start with what you can afford to save but even a small amount every month will add up. If you set up a Direct Debit into a savings account on the day after you get paid you will always have enough to start saving and you will need to budget for the rest of the month.
For many having an emergency savings fund gives them real peace of mind and makes the rest of life more enjoyable. It is important though to remember this is an emergency savings fund to get you through any crisis, so don’t be tempted to dip into it for non-essential spending even a holiday.
Enable’s IFAs know that regular saving is the way to financial security and peace of mind for the future financial management of your affairs.