A study by comparethemarket.com has laid out the parameters of saving for those larger life expenses. It’s based on the 50-30-20 standard which recommends that 50 percent of your income should be spent on the basic things like house payments, electricity, water etc; 30 percent should be spent on less important purchases such as entertainment and accessories; and 20 percent should be put aside for saving.
After taxes, the average salary of a UK citizen is about £29,800 which is roughly around £1980 a month. Saving for pricier content can be a little difficult. Buying a car or paying for your wedding couldn’t be achieved in a 12 month time-frame.
The Ford Fiesta, the favorite car in the UK, has a cost of approximately £15,600. You would have to save £1300 a month if you wanted to buy it in only one year. That’s about 66 percent of the average person’s salary. But if you saved the suggested 20 percent every month, it would take a little more than three years for you to pay for this car straight-up.
The Office for National Statistics proposes that the average individual spends about £670 while on holiday. To save that amount in one year, you would be required to save about 3 percent, or £56 each month. Alternatively if you used the 50-30-20 method, by saving 20 percent a month you would be prepared for your holiday in less than three months.
On the average UK income, it’s pretty much impossible to afford a typical wedding with only one year of saving. The standard wedding can easily cost over £30,000. Caterers, florists, planners, and of course the dress, all begin to add up to a fairly steep sum. Saving 20 percent a month – which is a bit less than £400 – would allow you to have your dream wedding in just shy of seven years. Of course if both parties could manage to save this much, you could accomplish this in half the time.