While living costs remain high, building up a rainy day savings fund has never been more important.
By taking the term ‘rainy day’ literally, people may be able to amass over £2,000 over the year, experts at money app Plum have said.
The savvy “Rainy Days Rule” sees people challenge themselves to put a certain amount of money away every time it rains.
The Plum app has an automation tool to help people put the funds away automatically. Rajan Lakhani, Plum’s resident money expert explained: “Each day it rains in your local area, extra money is put aside in your savings for you.
“With Plum, this rule can be customised depending on how much you want to save or to keep things weather-appropriate, your ‘moisture level’ from £1 – a bit damp – to £20.”
London saw 109 rainy days last year, which would mean extra savings of up to £2,180 over 12 months.
Mr Lakhani said: “The idea that the weather controls how much you save sounds a bit crazy. But believe it or not, this is a very effective way to save small amounts.
“What a lot of people struggle with is the decision-making process, how much and when to save. So as long as the decision is made, it doesn’t really matter that it’s triggered by quite a random event.
“It works pretty well in the UK where we get a lot of rain… perhaps we need to make a Sunny Days Rule for our friends in warmer climes.”
Another way people can build up a savings pot saving little and often is by using the 52-Week Challenge, which can help people accumulate as much as £1,378 over the year.
Mr Lakhani said: “The key to success is breaking down your savings into manageable chunks. Increasing deposits in small increments means the difference is less noticeable, so it can help you gradually adjust to paying more over time.”
To do the 52-Week Challenge, savers start by setting aside £1 on the first week, then £2 on the second week, then £3 on the third week, and so on.
Savers set aside what they saved the day before while adding another pound each week. After a year of doing this, savers could end up with a £1,378 savings pot.
Alternatively, people can carry out the 1p savings challenge, which follows similar rules to the £1 challenge but instead, it’s carried out daily with pennies. To do the challenge, savers have to set aside 1p on the first day, 2p on the second, 3p on the third – and so on.
Although the final amount amassed won’t be as high as the £1 challenge, it can still see savers stashing away £667.95 in one year.
Research by HSBC found one in three (33 percent) UK consumers surveyed are feeling positive about the year ahead having formed clever cash-saving habits in 2023, from reducing spend on gifts (29 percent) to opting for supermarket-own brands (36 percent).
Around 80 percent of people have reduced their spending in the last six months, with takeaway meals (43 percent) and dining out (43 percent) topping the list of cutbacks.
Pella Frost, head of everyday banking at HSBC UK, said: “The rise in inflation has created many financial challenges for consumers, but the end of the year is the perfect time to take a fresh look at your finances.
“Ask yourself: am I making the most of my money? Perhaps one of your New Year’s resolutions could be to build a savings habit or review your existing arrangements. Take advantage of special offers or accounts where you will get a better interest rate, and make sure you contact your bank for further advice or support.”
