For the first time in my life I have had the motivation and encouragement to save up some pennies and wave goodbye to my endless spending habits. No more browsing the book aisle in Tesco, no more cheeky Pandora charms for my bracelet, and no more stocking up on jeans and jumpers. Back in Autumn 2017, Kieron and I decided it was finally time to buy our first home together. We have always known this is something we want to do, and the time finally came for me to start a savings account and get my finances sorted out. It was essential for me to learn how to save money rather than justify the money spent on every unnecessary item I thought I “needed.” It was certainly a challenge to change my spending habits, but now I’m reaping the rewards with a growing savings account, a Help to Buy ISA and just the occasional treat. Here’s how I stopped wasting money on material goods and learned to save up for something worthwhile:
- Look at the money you DO have to spend each month. I put a spreadsheet together to look at how much money I was spending on a monthly basis which included absolutely everything – my phone bill, my pets and my car. I even included the odd chocolate bar I bought at work and trips to the hairdressers; it’s eye-opening to see how all of these things add up. By looking at everything on a spreadsheet, it becomes clear which items still need to be purchased.
- Have a clear objective. When I started saving, I had a rough idea how much money I needed to save up each month to reach a decent mortgage deposit. This gave the numbers on my spreadsheet some clarity and I had a clear goal to work towards.
- Be realistic. While it’s important to have goals and a rough time scale in mind, it’s important to keep your feet firmly on the ground. If you can only save £100 a month rather than the £250 a month you’d hoped to save, then accept this is still positive. As long as you’re saving as much as you can and change your spending habits, you’re doing your best.
- Over-budget and play it safe. When looking at numbers I tended to round things up slightly as this would ensure that any price increases (such as fuel) would be accounted for and wouldn’t set me back on my savings mission. Keep a calm and positive attitude, and as the pennies turn to pounds you’ll soon learn to love saving.
- Live a little. Whilst it’s important to cut back on those takeaways and trips to the car wash, it’s also essential to remain positive and treat yourself now and again. Rather than having a takeaway every Friday night, why not enjoy one every month instead? It’s healthier for you and your bank balance! Keep up your gym membership, dance lessons or photography classes. You’ll be more motivated to save if you’re happy and positive.
- Work as a team. If you and your significant other are saving for the same goal, this is perfect as you’ll motivate each other. I often found that I stopped myself buying a DVD or a book because I knew Kieron wasn’t spending any money and I would have felt guilty. If you’re saving for something independently, why not talk to those around you and see if they’re saving up for something too? Your friends may have dreams and goals of their own.
- Delay your spending. Before you purchase that pair of boots you’ve just spotted on sale, think about it sensibly. What else could you spend that money on? Do you really NEED them? You may try to justify the purchase by concentrating on the money you are saving, however ultimately you are still making a purchase and spending money. Having a cooling off period to think about your decision is a wise and mature thing to do. There’s always another day!
- Learn the difference between want and need. Ever heard the saying “the first thing you want is the last thing you need?” We need plates and cutlery. We need some kind of entertainment in our lives. We DON’T need a collection of 23 pairs of jeans, 42 pairs of socks and 18 t-shirts. What you really need is to save your money for your ultimate goal. Think about your spending sensibly to determine what you really need in life.
- Live on the cheap. Find ways to cut back on your outgoings. I’ve been taking my own lunch to work, shopping at budget supermarkets like Aldi, and buying cheaper but more meaningful gifts for friends and family. There are plenty of free days out too, with the likes of the Natural History Museum in London having free entry. Kieron and I now spend a lot of our free time out and about walking in the countryside rather than paying money on entry fees at the zoo.
- Earn more money. If you’re really desperate to reach your goal quickly, or you’re running out of time, you can always work some extra hours at your job or take up a second job, earn some pocket money from your parents, or start your own business. We’ve earned a few hundred pounds by clearing out our old stuff on eBay, Facebook buy & sell pages and visiting car boot sales. It’s amazing how much the pennies add up and it feels great to make some space in your home too.
Adopting these new habits has certainly been a big learning curve for me. Resisting the urge to buy a treat for yourself after a challenging week at work is easier said than done! It’s also difficult to say “no” when those around you aren’t saving up for anything and are purchasing on a regular basis. My biggest top tip is stop spending money altogether where possible. During the weekly food shop I would tell myself it was acceptable to buy a book because it only cost £4. More often than not, I would regret buying the book and wished I had more money in the bank. What I didn’t realise was that one purchase often led to another. Think about spending money like turning a tap on or off, and if you’ve chosen to start saving you need to be consistent and turn off your spending tap! I definitely recommend going cold turkey and starting your savings immediately, so start as you mean to go on.
With a little bit of luck, Kieron and I will have bought out first home by the end of 2018. It’s essential that we keep saving and I really feel that my mindset has improved in other areas too since becoming more responsible with my money. Are you currently saving for anything? What’s your biggest motivation? I’d love to hear all about your top tips on saving money and the things that have helped you.
Until next time,