This is part two of my money series, you can click here to go to part one which was mostly about managing your money more efficiently day to day.
This part is going to be highly based on saving, some of these tips may apply and some are going to require real will power but if you desperately want to save they will help.
The idea of saving thousands of pounds for a designer piece, emergency fund, holiday, car or mortgage in say a year can seem very daunting if not impossible but it is definitely something that you can work on and get a better understanding of if you really want to.
Up until around a year ago the thought of saving for a deposit to buy a home seemed like a myth to me I had literally counted myself out of ever being in the position to buy but upon getting my finance in a good order and looking into it further I discovered it is really not that out of reach at all.
Save the change: Get yourself into a habit of saving in a jar/tin/piggy bank you can get them for around £1 these days and you would be surprised how much you end up saving and how it encourages you not to waste money because we all know once you break into a note the change ends up disappearing into an abyss never to be seen again.
• Make it into a challenge with a friend, family, partner or partner have a tin each and save your spare change up to a specific date the person who saves the least has to use their money for a date night/round of drinks or something but the ‘winner’ can spend theirs on whatever they want. Competition is always good to spur you on if you have a competitive nature.
• Make the effort to put something in savings every few days or on a specific day from your purse/pocket/car but leave out a little change for emergencies.
• Try a money saving challenge you can find many examples online where you save the £ amount for the date of the month/year so Day 1 : (Jan 1st) = £1 Day 2 : (Jan 2nd) = £2 and so on.
• Vow to save a particular coin I am currently saving all the new pound coins I get, I tried the new £5 notes but now cashpoints give out £5 notes so i’d be at the cash point forever trying to not get a £5 note.
"Emergency card" : A lot of people I know of have an emergency credit card that they usually keep for stuff like petrol or breakdowns which usually ends up becoming a break incase of an emergency nandos card. To avoid this dont bring the card out with you or leave it in the car if possible to avoid pulling it out at any opportunity.
Socialising: If you are trying to save for something in particular being wiser with spending socially will probably be one of your biggest areas you can change for the greatest impact, if you find yourself eating out with friends 3/4 times with a different person each day why not make it into one group meal. That way you are only buying one meal with three friends instead of three meals with three friends. Everybody loves to socialise of course and this doesn't have to be long term.
Think of it this way.. Say you go to Nando's and your typical order is £12, you go three times a week that's £36 a week then you do this three out of the 4.5 weeks of the month that's £108 per month.
Whereas if you were to go out to eat with those same friends together once a week for four weeks that is only £48 per month, giving you £60 a month you can save towards whatever it is you want.
Or If you apply this to going clubbing every week, say you spend £20 on an outfit, £20 on taxi’s, £10 on Pre-drinks, £6 entry, £20 on drinks, £4 on a pizza afterwards. That is a total of £80 per week, Approx £320-400 per month.
Of course you don’t have to cut down on these things so drastically or permanently but if you really want to save sacrifices must be made, right. I’m sure your friends will understand that you are saving for your deposit/car etc and wont make you a social pariah for missing out on a few nights out here and there.
Planned cash: There is no point going through all the hassle of organising your money, planning what your gonna spend that hard saved cash on at the end of the year/saving period if your not going to follow it. A good idea is to only take out with you or have available on your card what you plan to spend and remember chip and pin is not your friend when you are saving because your available balance/pending transactions don't always update for sometimes days.
Online window shopping: I am guilty of buying things online when I'm bored or not feeling the best so I adopted a new way of ‘shopping’ to stop me from buying a load of things that I will only end up living in my wardrobe with the tags still on forever and ever amen lol. When I feel in the shopping mood I will utilise online wish list’s/save for laters. So I add all of the things that I am considering to the list and I will ask myself do I need this for any occasion right now? Do I have something similar in my wardrobe already? Filtering through the list and deleting the things that I don’t ‘Need’ right now or really love. I also have a personal style list so if it doesn't fit into my desired style and things I need to fulfil this then I also remove it.
Then I do the unthinkable.. I leave the site and don’t buy anything instantly if It doesn't meet my need category.
If I come back to the website at all which I have found I only tend to do on one or two of my go to sites I have a new look through my wish list/saved and assess if I still want the items. Then I go back through my ‘Do I need? Have I already got? Does it fit my personal style or is it just trendy?’ filter again. I find that when I come back to things later on weeks and months down the line I end up looking at some of the things I save like: WTF was I thinking? Where would I wear this? Was I drunk ? lol.
I recently did this with an item on ASOS it was in my wishlist for around two months I revisited it about three/four times, it went out of stock in my size but during this time and each time I still loved it and finally bought it recently and I am happy with it rather than buying something on a whim and then it ending up in the clothes donation bank by winter.
Be tight: Another big part of wasting money in this society is splurging to impress or give an image of success. Let’s be real now although likes are great for the ego when your broke likes don’t pay the bills. When you wish you had that designer bag they don't accept heart eye emojis as currency. I have felt the pressure to ‘do it for the gram’ in the past my solution for this was to stop posting every single thing I buy, place I visit, every scrap of food I eat. If you aren't posting it nobody knows anything good or bad. For all my Instagram knows I live in a 10 bedroom house or I could be homeless. I’m eating caviar for all meals or living on cereal.. Nobody knows and it takes the pressure off so much.
A good idea is having a good look at what is truly important to spend money on and not living outside of your means or even seeing where you can live a little more frugal. For instance I am a single person with no children it makes no sense for me to have a five bedroom house because it is an unnecessary expense for a single wage family and will cost me more to heat etc than a one or two bedroom flat or house.
Another area for me personally which I touched on in my last post is my phone bill, I’m not big on calling people so I don't need to pay £50 a month for 6000 minutes that I know I will never ever use no matter how included they are. It’s worth getting your monthly bills and looking into the breakdown of how much you use month to month for texts, minutes and data. Most people never even touch them so it is worth seeing if its something you can reduce to save some money. Even if you are on a 12 or 24 month contract from my experience working in a phone shop once you have paid off the balance of the phone itself some networks will take your up on the suggestion to reduce your tariff for the remainder of the contract term then you can choose to renew, cancel or take a monthly sim to suit your needs after this point.
Networks offer great sim only deals for 1 month or 12 months which may be more beneficial and could save you around £10-30 per month if you don’t exceed your limits. Should you ever find a cheaper offer elsewhere you are not tied in for 24 months so you can change and save more.
Every little helps :)
Saving for a treat: I am an advocate for spending wisely and not letting social media make you broke but I say that to say this I do like nice things, really nice things at times. I own a few pairs of designer shoes and I have my eye on my dream car and a designer bag at the moment. I don’t think it's fair that anybody should be working just to save every penny forever and ever and it's unrealistic.
When I first started being super organised with my money I wanted to try to buy something I had wanted for a while as a test. I decided for my next birthday I wanted a pair of shoes that cost around £425, I knew I had wanted them for over a year at this point and originally thought that this was unrealistic. I had taken my time to really research them, how they would fit into my life and style and still loved them. When I told someone I wanted them I was met with so much negativity but I’m not one to be easily bothered when my mind is set on something. I knew that if I wanted the shoes by July of the following year without any major interruption to my spending/saving I would need to save a minimum of £40 a month, which is about what most people pay on a phone contract. I looked at my year spreadsheet assessed if I could afford the amount and added it amongst my expenditures for £40 per month and bought the shoes for my birthday :) now I am in a different place with my financial organisation to the point that if I wanted to do this again I could definitely do this in a reduced amount of time but It was a start and an experiment.
This method is something you can apply when you have your money so well organised, If I want something I literally just slot it into my spreadsheet and I can tell when I will be able to buy it be that in two months or 2 years. I did the same thing to buy my electronics, my car and have multiple things I am saving for currently I now have a clear time scale of when I can buy these things and the freedom to change things around if I wish or if something comes up.
I know how I have worded those ideas it may seem like I think it is so so easy to save honestly I have my moments and I talk to my friends all the time about stuff like this.If you are bad at saving monthly, try using the following methods to help:
The envelope method: Get some kind of envelope per item you want. Write what it is or stick a picture on the front of it (you can even add the total price you need). Then every month draw your dedicated amount from your spreadsheet out of the cash point and put it in the designated envelope and tuck it away. If that is too tempting for you to have it so easily accessible give the envelope to a loved on you can trust; parent, sibling, bestie and you’ll be less likely to dip in when you’ve gotta ask for it.
Alternatively there is the option to have accounts you can pay into buy you have limit of the amount of times per year you are allowed to draw money out and even the option that you can only draw the money out by going into the branch or by closing the account down altogether a lot of hassle to go through which may make you double think the trip to town just to draw out £10 for a random item you don't need.
Saving for no damn reason: If you don’t have anything in particular you want just yet save anyway, designate a certain amount monthly in your budget to save be that £10 which come Christmas time will mean £120 or £100 per month giving you £1200 by the end of the year to treat yourself to something. This will get you into the habit of saving something monthly as standard.
Don’t save too hard: One of the biggest downfalls of saving is over saving, really stretching yourself financial and sacrificing all to save. If you are new to saving you might struggle if you cut yourself off completely all at one time so try cutting down on a few things at a time get this set in stone and see what works for you. This will give you time to adjust your numbers and/or add new things on where you see fit. Otherwise you will most likely fall flat off the waggon, go on a major shopping spree ending up with you in a heap of clothing on your bedroom floor lol.
If you do really struggle with the desire to not spend on yourself unnecessarily then budget in some ‘me money’ monthly to treat yourself to a little something that will not break the bank but will feed that desire to buy. For a while I knew I wanted to collect Yankee Candles for my new home so I literally scheduled in £23.99 for a Yankee Candle into my monthly budget and this became a little treat for me monthly. Once I had a billion and one candles I changed to wanting new make up frequently so I changed this to whatever the price was for the item I wanted each month which is not always the same but it was in the budget.
It might seem over the top but I promise you budget everything.. everything!
If you are saving to the max because you are about that life remember to take a break from saving or have something planned for once you have reached your goal. I literally schedule two big saving breaks a year for my birthday and Christmas where I don’t pledge to save a single penny for that payday and use the money to reward myself when I’ve achieved the previous saving goal or saving so well for the last 6 months. In all honesty I am bit obsessed with saving now so even those months I end up saving most of it but the option is there should I not want to.
Friends and Family: I know as mentioned that the idea of talking about money in this day and age seems like the ultimate taboo but another great idea is to let family members and friends know that you are saving for something big. I have a friend who had made it very clear to me that they were saving very hard for a mortgage and I have friends who I know aren't the best with money so I always take this into account for them without making a point of it whatsoever. If we do arrange to meet up I will always suggest things that are either free, the cheaper option or where they are not in a position where they feel like they have to spend a grand amount of money. For instance we will go for shisha with friends as we know this will be split between us so many ways or a food place where it's not necessarily a starter, main and dessert set up. Another option we used to do so much when we were younger ESA days is take advantage of the good old fashioned pub lunch 2 for 1, Two meals for £8.99, Drink and a burger day. Rather than going to a fancy steakhouse 3 nights a week, in the long run you are helping yourself and your friend because you can still socialise and both parties are saving money.
If you are feeling super thrifty one person get a bottle one person get a take away in a bag from the supermarket or what not. Girls night in Et Voila!
Saving for a house - Aswell as your standard ISA’s and savings account that are usually offered by the bank there are now ISA’s in partnership with the government which are aptly named a ‘help to buy ISA’ which is specifically catered to first time buyers. This usually entails an initial deposit of up to £1200 upon opening the account then you can add up to £200 per month following this. So you save in this and when you come to buy a house they will give you 25% of the amount (up to £3000) towards the purchase of the property. If you choose to withdraw the money to use elsewhere then you would not revive the 25% but will get all of your deposited money back no matter what.
This is something that you can do as a single person or two people can combine two ISAs at the point of purchase to buy.
You can find This is part two of my money series, you can click here to go to part one which was mostly about managing your money more efficiently day to day.
This part is going to be highly based on saving, some of these tips may apply and some are going to require real will power but if you desperately want to save they will help.
My favourite free apps:
Savings Goals: you can literally create a little online piggy bank for the thing you are saving for and each month you update it to add the amount you have added in, this is a good app if you are a visual person because you can see the money piling up to the top. It also gives you further options for reaching your goal but I just like the visual element of seeing all the lil pots of gold coins.
Excel: I use excel the most to plot my monthly, annual and 5 year financial plans. If I could tell you to use any tool Excel is it seeing all your spending each month on what all in a list is the biggest wake up call ever.
Savings accounts, Shares an ISAs: This is something that I am still trying to wrap my head around myself to be totally honest. Growing up I had no idea that I could have shares, I thought that was something they only did on Wall Street. Come to find out when I started working at the company I work at now they offer this as a thing and everybody does it.. say what?!
For now this isn't something that I have taken a dive into purely because I would like to get a good understanding of how it works before I invest as it’s all new to me. I’ve been there coming up to three years now and I have seen peoples shares mature and gotten tiny bits of feedback from people.. I will adventure into the unknown for further information.
Most banks actually have financial advisers staffed who can talk to you about the best type of account for you, advice on mortgages, how to look after your money and some offer incentives for being a regular save. If you are not the best with saving they can offer an account that is harder to withdraw from regularly i/e you have to go into branch or have a limit to the number of withdrawals in a fixed period. You can set up a standing order to the account and have a trusted family member hold onto the details of this for you, so your aunt who lives next door but one might not be the best option but say your mum lives a mile or so away give her your card and unopened pin to the account.
