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Over half of Brits find it difficult to build up a financial safety net

by wrich
  • Although Brits believed it was the most important financial task to do, 66% find it very difficult to build up a financial safety net         
  • Almost a quarter of Brits (22%) also struggle to manage their loan and debts, and one in ten (9%) can’t keep track of their regular bills and payments
  • Debt management company Lowell offers their top tips on how to tackle those difficult financial tasks

Managing personal finances is one of the most important things to learn on the journey towards financial security. However, it’s not always straightforward and some people can struggle with the numerous tasks that come along with it.

Debt management company, Lowell has looked at the tasks people find most difficult when it comes to managing personal finances, with building up a financial safety net to fall back on coming out as the task people find the hardest.

What money management tasks do people struggle with the most?

  • Building up a financial safety net to fall back on if needed – 66%
  • Saving for specific long-term purchases – 60%
  • Finding ways to make more money from savings and assets in the future – 59%
  • Saving up for experiences and activities – 52%
  • Sticking to a budget – 33%

On a positive note, 80% of Brits find it “easy” to keep track of their regular bills and payments, and 67% of people claim that they can keep track of their spending well.

The research also showed that Brits believe building up a financial safety net is the most important personal finance task people should do (37%), followed by 24% who believe in finding ways to make more money from savings and assets and 22% who believe sticking to a budget is the most important.

The importance of a financial safety net

A financial safety net is a pot of money that you use for emergencies or unexpected circumstances. It’s recommended that each person has one for unforeseen expenses, such as car repairs, boiler repairs, vet fees, or even the case of losing your job. It’s recommended that a good safety net can cover three to six months of your expenses.

If you’re already dealing with personal finances issues, this, alongside saving for a big purchase and finding ways to make more money from your assets, can seem like impossible tasks.

John Pears, Managing Director of Lowell, has offered his step-by-step advice on how to get more from your money:

  • Priorities your debts – paying off your excess debt is the best way to get yourself in a comfortable financial position where you can look towards saving for emergencies and getting the most from your money.
  • Start small – although a savings pot of three to six months expenses feels quite overwhelming, this needs to be seen as your end goal. Even amounts that seem small at first will add up over time, and before you know it, you’ll be much further along the line than you would have thought.
  • Prioritise needs, wants, and savings – when looking at how much you can save, get into the habit of understanding your needs and wants. List out your absolute necessities, your wants, and your luxuries. Then you can get a real clear idea of what you can put away each month.
  • Do a financial spring clean –look at all your incomings and outgoings, and see if you can cut any, combine payments, or reduce anything. Take a look and where most of your money is going each week and see where you need to reduce your spending

Scott Mowbray, cofounder at money saving app Snoop said:

“People prioritise a financial safety net but building one can be easier said than done. Whether money is tight, or life just gets in the way, getting on top of your money can seem too complex and time consuming so it gets put on the back burner.

“Having some easy access cash stashed away provides some financial security and avoids the need to use a credit card when unexpected or emergency expenses rear their ugly head. The good news nowadays is that money management apps can help take the strain, simplify your finances, and spot saving opportunities at a glance.”

For more information please visit: https://www.lowell.co.uk/about-us/lowells-blog/saving-and-budgeting/why-it-s-important-to-build-a-financial-safety-net/

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