Should I save money?

We’re always told we should save money, but why? And most importantly, how on earth do you save when living is so darn expensive? Read on for some easy ways to save money, and why it might be a good idea to start!

Why should I try to save money when I’m so bloody broke?

If you’re right up against it at the end of each month, attempting to save money might seem laughingly-impossible.

If you’re one of those people, it’s even more important you save. Why?

• Because you may have an unexpected cost, like your car breaking down, or your computer exploding right before a coursework deadline,
• Because you might suddenly stop getting money, if you lose your job, or a bank error prevents you from getting paid. What would you live off? Ideally you need enough to live for three months,
• Because something might come up that you really really want to do, like go to Glastonbury (when we’re allowed!), or go on holiday with your mates. With savings, you can go without plunging yourself into expensive debt. Wondering if you can afford a debt? Check out our article here.

Having some money saved is generally pretty wise, then. But more than that – it’s peace of mind. With a bit of savings, the thought of losing your job won’t fill you with such gut-wrenching despair.

Plus, saving means you can do fun stuff – like buy shiny things, or go to exciting places. It doesn’t have to be all Mister Scrooge counting beans in his dressing gown.

Easy ways to save money when you’re broke

Save what you can, and it will add up over time. Here are some easy ways to save money without noticing:

• Use a round-it-up app – Banks are increasingly offering services where anything you spend on your card gets rounded up to the nearest pound, with the excess being put into a savings account automatically. Watch the money build without you even noticing.
• Set up a direct-debit – Straight into your savings account, and then you won’t miss the money because it was technically never there. Even if it’s only a tenner a month, it all counts.
• Start paying for stuff with cash – Work out a budget and take out only your budgeted amount of cash for that week/day. Try and only spend what you need and put the rest in a good ol’ fashioned piggy bank. It’ll be bursting before you know it. Read our advice on making a budget here.

Should I be investing wisely in the stock market?

Investing in stocks is probably a good idea if you’re a billionaire and you can mitigate all your risk with a hedge fund, but any type of investment is a gamble, and when you’re gambling you have to be OK with losing the amount of money you’re rolling the dice with!

With the growth of trading apps for individual investors, the stock market might seem seductive, but if you’re saving over the short term, it’s best to be avoided. Most financial advisors would recommend you invest for at least five years. If you can’t, it’s normally a shrewd move to steer clear of investing and leave your money in a savings account.

Remember: adverts on YouTube making big claims about how you should be investing your money are mostly from people who just want your money!

Is it better to save, or pay off debts?

The really unhelpful answer to this is: both.

Ideally you need to pay off any high-interest debts ASAP as you’ll lose more money paying the interest than you would make through savings. Also, always prioritise paying off debts where you could lose your home.

HOWEVER – it’s also really useful to have a float in the bank so that, if things fall apart, you still have some money left to eat.

But how much should I save, you ask? According to the experts it’s a good idea to save at least three months worth of living expenses. Most people in the UK are not at this recommended level, so if you manage to get there you won’t exactly have ‘fuck you money’, but you might experience some smug satisfaction.

For advice on sorting out debt, read our article about where to get free help with debts and check out these links for all things money:

• The Money Advice Service offers free, unbiased and independent advice about all financial matters. 0800 138 7777
• Citizens Advice offer free help with housing, money and legal problems. Find your local centre.
• Chat about this subject on our Discussion Boards.
• Need help but confused where to go locally? Download our StepFinder iPhone app to find local support services quickly.