Life’s surprises mean saving is more important now, than ever before
It’s just before Christmas. Whilst many people are putting their ‘out of office’ messages on and joining the supermarket frenzy, I am spending a little time this afternoon thinking back on my year.
Anyone that knows me might suggest that I am thinking ‘good riddance to 2014’ but that’s not the case. I am just reflecting.
I have worked in ‘money’ over a number of years; financial advice, debt advice, financial inclusion and tackling poverty. In January 2014, Citizens Advice reported that there was a 39% increase in the number of people seeking online help with debt problems in the previous year. With their latest statistics due to be reported shortly, there are few that would expect that trend to reverse. Rising prices for energy, food and housing is putting extra pressure on people’s finances. Bureaux are finding that payday loans, credit cards and overdrafts are being used to top up people’s income as wages remain static.
Problematic debt occurs most often when personal finances are pushed to the limit…..and then something happens. Losing a job (or indeed a drop in working hours available), an addition to the family, ill health or suddenly having caring responsibilities can all be a catalyst. They all affect income and if there is no savings as a buffer, well, it’s not going to go well is it?
This summer Legal and General published data from their survey of almost 5,000 people. The Deadline to the Breadline is the number of days the average UK household could survive financially if the main breadwinner’s income is lost through long-term sickness, critical illness or death before being totally reliant on state benefits, friends or family. The average Deadline to Breadline period in the UK is 29 days. In Wales it’s 7 days. That’s because here in Wales fewer people have a back-up plan to deal with an unforeseen shock to our income.
So why at this cheery, festive time of the year is my blog post apparently full of doom and gloom? Well it’s not. From a personal perspective it’s not so much a ‘cup’s half empty’ as ‘cup’s half full’ view. It could have been me that was facing that breadline this year. Let’s just say that all plans for a normal year changed suddenly in the Spring and 6 months’ sick leave later I am back to work and acknowledging how lucky I am to be able to do so. I also appreciate working for an organisation that is so supportive of its staff when things go wrong and I am well aware that employees of many other companies are not as fortunate.
This is not something that happens to other people, it’s something that happens to us, any of us. My message is simple. Let’s make 2015 the year that we (all of us) do a bit better with our back-up plans. Yes, money is tight but it’s worth thinking about and making any adjustments to spending to save at least a little. An online savings calculator, on the Money Made Clear Wales website, can help
Credit unions are a great place to put money aside for the unexpected. A little bit, put away regularly can really mount up. Safe, ethically sound and instant access, they offer an ideal place to keep your savings far enough away from temptation but near enough to access when needed. Hopefully you won’t need it to fall back on it, but it’s there if you do.
Wishing you a happy and healthy 2015.
Katija Dew is the Financial Inclusion Programme Director at the Wales Co-operative Centre
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