Don't have three months salary tucked away for a rainy day? These tips will get you there

Colette Sexton, news correspondent at The Sunday Business Post, on the underrated magic of saving.


When I was ten, after constantly nagging my parents for a TV in my room, my Dad eventually said I could get one if I saved up for it myself. He quickly forgot this promise. I did not. I saved all my pocket money plus whatever extra I made on special occasions or doing chores for 13 months until I had enough to pick a TV out of the Argos catalogue. True to his word, although in disbelief that I actually had the patience to save up, my Dad let me buy it and that TV lasted me 13 years. An excellent purchase, if I do say so myself.

If you haven’t already figured it out, I can get a little preachy when it comes to saving money. I find it crazy when friends on salaries higher than mine run out of money before payday. I know that there are some dreadful situations out there and some people struggle week to week to make their money stretch to cover the essentials like rent, food and heat. However, the majority of us do have some wiggle room to put some money away each month if we put our minds down to it. Most financial advisors recommend that we have three months’ gross salary tucked away in a savings account for a rainy day. That might seem like an impossible feat, but it can be achieved if you follow my six simple steps to financial security:

  1. Make a note of what you are spending
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Write down how much your bills come to every month. Not just the big bills like rent, electricity, phone, internet and bins, but everything you made a monthly payment on, whether it is your gym membership fee, your Netflix account or a magazine subscription. Then spend a month taking note of everything else you pay for. A lot of people don’t have a clue how much their weekly grocery shopping comes to, or how much their coffee habit costs them. Many of us wander into Penney’s for socks and come out with three bags full and €120 gone on the credit card.

  1. Do some math

Once you have figured out how much you spend every month, subtract your essential expenditures (rent, bills, food) from your salary. This is your disposable income for the month. Take a long hard look at what you spent this on the previous month and how much of this spending you can reign in to put the cash away for a rainy day - or a holiday to escape from those rainy days. Did you need to get your nails done twice at €25 a pop? Yes, they look pretty but buy a bottle of nail varnish (Rimmel 60 Seconds Polish is amazing and only €5), do them yourself and hey presto, there is €50 to put in a savings account.

  1. Open your savings account

Most banks allow you to open a savings account online in minutes these days - what a time to be alive! Set up your savings account, create a direct debit so the amount you wish to save every month instantly comes out when you get paid and, this is key, set a rule on your account that means you have to give 30-days notice before you can take out any cash.

  1. Do nothing

Don’t check your savings balance. Don’t cancel your direct debit. Don’t immediately apply to take out money “just in case”. Saving is a slow process and constantly checking your balance will leave you feeling dejected. Just sit back, and allow that money to digitally transfer into your savings account every month. It will not be easy, and you will have to make sacrifices but it will be worth it to have financial security.

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  1. Do something

If you get a pay rise, increase how much you put into your savings every month. If you get cash for your birthday or a bonus, again use it to boost your savings. It will be worth so much more long-term than that impulse purchase you make.

  1. Treat yourself

Yes, this might seem completely off the point in an article about saving but every now and again, take out a little money and treat yourself to something you have had your eye on for ages. It will mean so much more than those silly impulse buys and will inspire you to keep on saving.

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