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Useful articles and guides to help you take control of your finances

Saving for the future

Saving regularly is one of the most important things you can do to improve your financial resilience because savings will provide a cushion if you have unexpected expenses or experience a reduction in earnings.

But what should your savings goal look like? As a minimum requirement most financial experts suggest setting up an emergency savings fund of between three to six months of basic living expenses.

In reality though, even if you know you need to money put aside for emergencies it may well be that you’re still not quite sure how to make it happen. Maybe you’re already operating on a tight budget or maybe you’ve tried making savings a priority before and failed?

So how do you manage to pay your monthly bills and still have enough left over to put aside for a rainy day? Here are six ways to build an emergency savings fund whatever your current income.

1. Save first, not as an afterthought

The first way to ensure you build up an emergency savings fund is not to base the amount you save regularly on much you think you will have ‘left over’ at the end of the month, but rather to ‘pay yourself first’. This means committing to saving a regular amount as soon as you get paid and before you do anything else.

Once this money is safely in your savings account, you won’t be tempted to spend it on all the other things that tend to crop up.

2. Set it and forget it

Take things further by ‘automating’ your savings to reduce any likelihood of human error (or weakness). A big advantage of saving with a Credit Union like Transave is that you have to commit to saving regularly either at source via payroll deduction or by an automatic transfer from your bank in the form of a Direct Debit.

3. Stash any windfalls

Resist the urge to automatically spend any extra lump sums that come in. If you get a windfall consider stashing it immediately in your savings account.

Since you weren’t counting on this money as part of your monthly budget, you’ll not miss it and it will help get you closer to your savings goal.

4. Slash your budget

Free up extra money for savings by taking a red marker to your budget and trimming as much as you can.

Do you really need all those satellite channels? Do you really need to eat out three times a week? Every bit you can slash from your monthly budget gives you more cash you can put toward your emergency fund.

For more information on budget planning see our article here

5. Increase your savings

Once you've got into the savings habit, look for opportunities to increase your contributions.

For example: If you’ve decided to save 10% of your monthly pay consider making a small increase and set aside 12% instead. It's likely you won't even notice the difference, and these small changes can really add up over time.

6. Keep saving beyond your goal

When you get started with an emergency savings account, it's great to have a goal. But what happens when you meet that goal?

By this point, it's likely that you've become accustomed to setting aside some of your income for your emergency fund. And just because you've met your goal doesn't mean you should stop saving. There's no such thing as having too much money saved for an emergency, so keep it up if you can.

The 50/30/20 Rule for budgeting

Most people save too little, and unknowingly spend too much. The 50/30/20 rule for budgeting is a way to become more aware of your financial habits and limit overspending and under-saving (by spending less on the things that don’t matter to you, you can save more for the things that do).

Because this is just a rule of thumb for planning your budget you’ll also need to supplement it with a system to monitor spending as outlined in this article.

What is the 50/30/20 rule?The 50/30/20 rule is a guideline for allocating your budget to three categories, ‘needs’, ‘wants’ and financial goals as follows:

50% to Needs

Needs are what you can’t live without, or at least very easily. They include things like:

Rent/Mortgage paymentsGroceriesUtilities, such as electricity and water

30% to Wants 

Wants are things that you desire but don’t actually need to survive. They might include:

HobbiesHolidaysDining outDigital and streaming services like Netflix and Amazon.

20% to Financial Goals

This category includes savings and money set aside for debt payments.

How to use the 50/30/20 rule

Calculate your monthly income. Add up how much guaranteed income you receive in your bank account each month.Calculate a spending threshold for each category: Multiply your take-home pay by 0.50 (for needs), 0.30 (for wants), and 0.20 (for financial goals) to see how much you should ideally spend in each category. Plan your budget around these numbers: Think of these three categories as “buckets” that you can fill with monthly expenses. List and tally your monthly expenses under the category each falls into and see if you’re spending less than the monthly targets you established in the prior step.Follow your budget: Track your expenses each month, and make changes where needed, in order to stick to your spending thresholds going forward


50/30/20 Rule vs. Other Budgeting Methods

The 50/30/20 rule of thumb isn’t the only game in town. Here are a few other budgeting techniques to consider:

80/20 Rule: With this method, you immediately set aside 20% of your income into savings. The other 80% is yours to spend on whatever you want, no tracking involved. 

70/20/10 Rule: This rule is similar to the 50/30/20 rule but you instead parse out your budget as follows: 70% to living expenses, 20% to debt payments, and 10% to savings.

Budget Planning

What sort of relationship do you have with your money?

If the relationship is long distance then there’s a real danger that you will never get on top of your finances. Instead, why not beat the fear by getting organised and creating a budget to see your money situation more clearly?

Creating a budget will create a strong foundation for your finances and allow you to manage your money, control spending, save more money and stay out of debt. Let’s face it without an accurate picture of what’s coming in and going out of your bank account it’s going to be impossible to manage your finances properly.

Six steps to creating a budget

Step 1: List your income Start by working out how much income you’re bringing in each month. To do this, add up all reliable sources of income, for example wages from a job and child support. The key word here is reliable, if you get cash from outside jobs or hobbies, but not on a regular basis, don’t include that in your budget.

Step 2: Add up your expensesSome of your monthly expenses will be fixed for example mortgage or rent, whilst others such as utility and grocery bills may vary. Firstly list all your fixed expenses and the amount of each expense. For the variable expenses try to determine the maximum amount you plan to spend in that category, for example you might plan to spend £400 on groceries.

Use your previous bank and credit card statements to help you figure out what you typically spend each month. Reviewing your previous spending can also help you uncover categories of spending you may have missed. Of course some of your expenses don’t occur every month but accounting for these periodic expenses in your budget can make it easier to afford them. Divide yearly expenses by 12 and semi-annual expenses by six to come up with the monthly amount to account for in those categories.

Step 3: Evaluate your spendingSome fixed expenses might be able to be adjusted, for example you might be able to get a cheaper broadband deal by shopping around. Variable expenses however are typically easier to adjust. You might want to use a “wants versus needs” analysis like the one provided by the 50/30/20 budgeting rule at this point. The aim will be to reduce or eliminate spending in those “wants” to make more room for the things you “need” to spend money on.

Step 4: Calculate your Net incomeNet income is what you have left over after all the bills are paid. You want this to be a positive number so you can put it toward paying off debt, savings, or other financial goals. Calculate net income by subcontracting your expenses from your monthly income and write down the number even if it's negative.

Step 5: Adjust your expensesIf your net income is negative it means you’ve budgeted to spend more than your income. You’ll have to correct this. Otherwise, you may end up having to use your credit card, overdraft, or other forms of credit to get you through the month.

Step 6: Track your spendingThroughout the month track your actual spending against your budget. There are free budget planning tools available such as Money Dashboard: or the Money Advice Service Budget Planner to help you do this.

The dangers of Payday Loans

It’s an easy scenario to imagine. You urgently need to borrow funds and a quick search online brings up loan ads with headlines like ‘Cash paid in 10 minutes, no credit history required’, so you apply and in no time at all the funds are in your bank.

So problem solved? Well yes and no. This type of short-term loan can be convenient and help you get to the next payday but can also have some significant disadvantages.


Payday loans are a high cost form of credit, with APR’s (the yearly interest payable on the amount borrowed plus fees) of anything up to £1,500%. As a result borrowers typically end up repaying a total of 1.65 times the amount they borrow* and because interest on Payday loans is normally calculated on a daily basis, borrowing can be even more expensive if borrowers choose to pay off over a longer time period.


75% of Payday loan customers take out more than one loan per year (the average number taken is six) so it’s perhaps not surprising that around 30% of these loans have to be re-financed or ‘rolled over’ because the customer cannot make repayments on time. This means they pay more interest on the loan and may also be charged additional fees with the end result that they can end up paying hundreds of pounds more than they originally intended to.


Some Payday lenders insist on a CPA (Continuous Payment Authority) before approving a loan. This means that the lender has access to take payments from the borrower’s bank account and the customer runs the risk of funds not then being available for other outgoings resulting in additional bank charges.

Credit availability

Taking a Payday loan will not automatically affect the borrower’s credit score as long as repayments are made on time. However loans are recorded on credit files and some lenders including a number of mortgage providers do not look on them favourably and may reject applications as a result.

Payday loan alternatives

If you absolutely need to plug a short-term hole in your finances payday loans are not your only option. For example depending on your financial situation arranged bank overdrafts, 0% credit cards and even standard credit cards (assuming the full amount borrowed is paid at the end of the month) are all going to be a cheaper way to borrow funds.

Many Credit Unions also offer similar loan products but at much cheaper rates even if you don’t have a five star credit rating. To look at a quick example if you borrowed £900 for seven months from a Payday lender** at an APR of 529.09% your total loan repayment would be £1,565.99. Borrow the same amount over the same period from TransaveUK (Instant Loan at 24% APR) and the total cost of your loan would be £973.43, a saving of £592.56.

*FCA survey 2020

** Cashfloat loan example 19/03/2021

Understanding your credit score

If you find that a finance company refuses you credit it’s almost certainly because of a poor credit score. Yet despite this 49% of UK adults* have never attempted to access their credit reports and have no idea about what their credit score might be or how to improve it.

The good news is that it’s not difficult to understand how credit reports work and it’s possible to access a free report in a matter of minutes. So what are the key things to understand?

Firstly there is no such thing as a ’universal credit score’. The big three credit rating agencies in the UK (Experian, Equifax and Trans Union) all have a different scoring system. That said, all three gather information about your credit history in the form of a credit report and use similar criteria when scoring that history.

What doesn’t affect your score

Contrary to popular belief there is also no such thing as a UK wide ‘credit blacklist’ that affects your score, nor does living at the same address as a family member with a poor credit score (unless you have joint financial products), or at the same address as a previous occupant with a poor credit history. You also don’t need to worry about old debts including CCJ’s that are over six years old as these don't impact on your credit history and checking your own credit report will likewise have no adverse affect. Finally, unpaid student loans or criminal offences will not affect your score.

How to improve your score

The easiest way to improve your score is to make sure you are on the electoral register as this helps the credit agencies confirm your personal details. Then it’s vitally important to make sure all your existing credit repayments are made on time, as any missed or late payments will affect your credit rating for up to six years. In particular, debts that result in CCJ’s will appear as a red flag on your credit file and if you do have any they should be paid off as soon as possible. The Credit agencies also don’t like to see evidence that your finances are under pressure. So try avoid going over your agreed bank overdraft limit or maxing out credit cards or other available forms of credit. Try also to avoid making multiple applications for new credit products at the same time, as this is something else that can adversely affect your credit rating.

Another good reason to check your credit report is that the credit agencies sometimes make errors that adversely affect your score (you should be able to appeal against these). And although it may seem a bit unfair, if you haven’t had chance to build up a credit record this will also impact on your credit file and your ability to obtain credit. Your only option may then be to talk to a not-for-profit lender such as Transave who may be more sympathetic to your predicament than the high street banks and building societies. Other lenders also offer ‘Credit Builder’ cards that will allow you to start building up that all important credit profile.

How to access a free credit report

There are a number of websites where you can access your credit reports in minutes entirely free of charge including Totally Money , Credit Karma and the Money Saving Expert Credit Club

* Experian Survey 2019

Cost of dying reaches a record high

The death of a loved one is hard enough without having to worry about how you’ll pay for their funeral. But this is the unfortunate reality for many people as the average cost of a UK funeral is now £4,417, a 3.4 % rise on the previous year. And according to the annual Sun Life Cost Of Dying report, the full cost of dying can approach an eye-watering £10,000 once the cost of the wake, headstone and other send off costs are added.

It’s not surprising then, that one in 10 people took on debt to pay for a loved one’s funeral, with the average amount of debt taken on by individuals rising to an all-time high of £1,744. Of those who struggled with funeral costs 28% borrowed money from friends and family and one in five (21%) took on debt. Sadly, one in 10 had to sell off possessions to give their loved ones a decent send-off.

Fortunately credit unions in the UK have long recognised the need to support the families of members who have passed away. At TransaveUK, should a member die Bereavement Cover is provided free of charge that will repay most outstanding Transave loans. In addition a lump sum Funeral Grant (currently £1,250) is paid by Transave to the member’s nominated beneficiary.

Members qualify for Bereavement cover immediately on joining Transave. It is of course important that members keep their beneficiary details up to date at all times. This can be done via their online account and app or by contacting the Customer Service team on 0114 243 8437.

Free and confidential advice if you are struggling with the cost of organising a funeral is also offered by the Down to Earth Charity:

Useful Links

It can be uncomfortable discussing money worries. However if you are struggling to manage your bills each month it’s important not to ignore the problem and instead to discuss your situation with someone who understands and can help.

Step Change Debt Charity

For debt advice throughout the UK phone 0800 138 1111 or visit their website

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Citizens Advice

For advice and information on debt and other topics, visit your local Citizens Advice Bureau or visit website

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