Could you cover an unexpected expense?

Surprise expenses like your boiler breaking down usually come with a big price tag. So would you be able to cope if you were hit with a sudden bill?

Well, new figures from YouGov show that nearly one in three people (31%) don’t feel confident that they’d be able to cover unexpected costs, such as emergency repairs, a boiler breakdown and medical bills.

Meanwhile, more than a third (35%) say they don’t feel confident saving money.

The YouGov poll coincides with a separate study by Chetwood Bank, which shows nearly one in four (39%) adults would find it hard to cover an unexpected £300 bill.

Meanwhile, more than half of those below retirement age (56%) said that while they plan to put money into savings, they often don’t end up doing so.

In addition, nearly six in ten (57%) admitted they put money into savings but often withdraw it to cover everyday living costs.

How to build your financial resilience

As the cost-of-living crisis bites and the economic outlook remains uncertain, it’s easy to understand why people often don’t put money into savings or an emergency fund.

But it’s a really important way to build your financial resilience.

So where do you begin?

Start small

If you want to build a savings buffer, don’t give yourself a mountain to climb straight away.

Move just a few pounds into savings each month and you can watch it add up over time.

Just £1 a day turns into £30 a month – and if it’s in a savings account, you get added interest too.

Check our tips on how you can get into a savings habit and build that much-needed safety net.

Create a household budget

Look at your income and outgoings, so you know you’ve got money available for vital expenses and can work out where savings can be made.

Ask yourself questions like:

• Are there subscriptions I’m paying for but not using?
• Could I switch energy or phone providers to save money?
• What small treats or habits could I cut back on, just a little?

You might be surprised where you can free up some money, which could then be saved for the future or help you absorb future price rises.

We've put together a guide on how to create a budget to help you get started - and you can also try our free budget planner.

Create a rainy-day fund

If you want to be ready for unexpected costs, it’s a good idea to create a rainy-day fund - a pot of money set aside for emergencies.

You’ll then be able to cover these expenses without having to borrow or dip into savings.

Ideally, you should have enough saved to cover around three months of your living costs - things like rent, bills, food, and transport. 

But even putting away a small amount into your rainy-day fund regularly could make a big difference if or when you ever need it.

Check our money saving tips

We’re regularly updating these pages with useful advice on how you can cut costs at home, such as: 

• how to make your money go further
• how to save energy
• how to keep the cost of your food shop down
• 50 ways to cut your fuel costs

It’s also worth checking back here for our round-ups of standout deals and low-cost recipes that can help you save money.