Almost half of Brits are unprepared for an unexpected bill

No bills are unexpected, they just haven't happened yet. Anything you own has a risk of going wrong and even setting aside a small monthly amount to cover this will help. There are also insurance products that can be bought to cover numerous higher risk issues. Things like car and house maintenance can be saved for- have either an emergency fund or separate accounts for all eventualities. Christmas and birthdays are the same every year so averaging what you spend down and allocating for this monthly makes it all a lot easier to find. Ultimately, if you can't afford to fund it, insure it.

Saving and planning for unexpected bills are not sexy subjects, especially in an age of instant gratification and easy credit. But when life throws a curveball, an instant-access “rainy day” account makes it far less stressful. Prevention beats cure, too so keep up routine maintenance. The gold standard is three to six months of essential expenses; start with £500 to £1,000, which covers the £535 average shock. Short of cash? Automate small payday transfers, even £10 a week builds to over £500 a year. Use banking roundups and check Help to Save eligibility. Paying from savings beats credit, as it stops a one-off emergency becoming long-term debt, though a credit card gives Section 75 protection on purchases over £100, if you clear it immediately from savings. Be as self-reliant as you can. It isn’t easy, high taxes, high interest rates and elevated housing, energy and food costs squeeze budgets and leave millions exposed when things go wrong.

A broken boiler can cost you more on your mortgage than it ever does at the plumber’s. When more than a third of people put a surprise bill on credit, that balance doesn’t disappear once the heating’s back on. It sits on the credit file, and lenders count the monthly payment against what you can borrow, so a £535 repair can quietly reduce what a lender will offer. The cause is simple. After years of rising bills, there’s nothing left at the end of the month to put aside. Until that eases, expect more buyers and remortgagers turning up with card debt they never planned to have.

A broken boiler doesn't care whether you've just been paid, and your car certainly doesn't check your bank balance before breaking down!

That's why an emergency fund is essential, not a luxury reserved for wealthy households.

Ideally, I'd aim for three to six months of essential expenses, but for someone struggling financially, the first target should be £500, then £1,000.

Even £5 a week adds up to £260 a year. Automate it into a separate easy-access savings account, preferably earning competitive interest.

I'd generally use emergency savings rather than expensive credit, provided doing so doesn't leave you unable to cover essentials.

The difficulty is that rising household costs have turned saving from a monthly habit into something people do only if there's money left.

My message? Don't wait until you can afford to save hundreds. Start with whatever you can afford today. Financial security isn't built in one payday. It's built one small decision at a time.

The best way to prepare for a broken boiler is to have the money put aside before it breaks, because borrowing it on a card is one of the dearest ways to pay. On the Bank of England's October figures, the average advertised credit card rate was 24.88 per cent, against 2.08 per cent on instant-access savings. Put simply, a pound left in savings earns about 2p a year, while the same pound borrowed on a card for a year costs nearly 25p. So if you've got savings, leaving them untouched and paying by card is a false economy. As for how much, NS&I, the state-owned savings bank, cites government-backed guidance of three to six months of essential outgoings, meaning the costs you can't avoid, not your take-home pay. If that feels out of reach, start with what NS&I calls "a first milestone that feels achievable", and I'd make that the cost of one car repair. That's what savings are for, so use them, then build them back up.