Do you have money left over at the end of the month?

A new report published by the Resolution Foundation shows that fewer than half of UK households on low-to-middle incomes have any money left over at the end of each month. And not only are a lot of people still feeling very squeezed by the state of the economy, but fewer than three in ten of households in the same income bracket manage to make any savings on a monthly basis.

The poll, conducted by Ipsos MORI, also showed that only two people in five are currently feeling any satisfactory level of job security.

As far as this study is concerned, ‘low to middle income’ equates to a gross household income of £12-30k for a couple with no children, £24-42k for a couple with 2 children and £30-48k for a couple with 3 children.

This paints a pretty grim picture. Not only are people worried about their jobs, they have little to fall back on in terms of savings if the worst does happen and they find themselves unemployed.

It is easy to sit back and spout wisdom over the wonder that is the emergency fund – a savings account dedicated to cushioning the blow in times of financial struggle – if there is simply no money left at the end of the month to save.

That said, there are a few ways you can channel a proportion of your income into a savings account to prepare for the unknown, and remember that even a small amount saved each month can make a different over time, especially if you take the time to hunt out a good savings account with a high interest rate, such as an ISA, which allows you to save money tax-free.

Top tips

– Take a look at your outgoings and really make sure you know where your money goes each month. This will help you cut out the unnecessary things, like the sports channel that rarely gets watched, or the magazine subscriptions that go unread. Every little bit helps.

– Move your household bills onto cheaper tariffs where possible. You could find savings by combining your gas and electric tariffs and your broadband and phone providers.

– Make a menu plan for the family each week and shop only for what you need in the supermarket. This will cut out buying unnecessary ingredients that go bad in the back of the fridge, forgotten. ‘Go shopping’ in the larder first to see what you already have so you don’t double-up on things by accident. If you cook in bulk, save what is leftover in the freezer so you aren’t tempted to waste money on takeaways when you’re too tired to cook.

– Pay money into your savings account at the start of the month as if you’re paying any other bill. It’s easy to think ‘I’ll save what’s leftover at the end of the month’, but it’s human to spend what you’ve got and find there’s nothing left at the end of the month!

– When you make your budget for the month, don’t forget to leave yourself some fun money. Being too tough with your budget means you are more likely to fall off the financial wagon altogether with a big blow-out when you get tired of being frugal – which will happen eventually! If you do fall off the wagon, just remember that you can start again tomorrow – it’s not the end of the world to have a slip up, so don’t throw your budget away for good, just start again.