Let’s Talk Finances; How to Start Saving Money
Let’s jump right into this one…
Saving money is something that is on every 20 something’s mind. For some it’s surprisingly easy (who are these people), but for the rest of us it seems like a total uphill battle that we’re never going to win.
I’ve put together some tips on how to go about getting your finances in order to help you save for your house, holiday, car or Topshop order!
Create a spreadsheet
The first thing you need to do is get a clear picture of what you’re spending your money on, how much you’re earning and what (if any), you have left at the end of the month. Create a spreadsheet and be really honest with yourself. Don’t skip the 3 Starbucks you had earlier this week, or the 2nd ASOS order you made this month, include everything! Monitor your spending within an inch of it’s life properly for a month at least and document everything. Estimates won’t be helpful or realistic if you’re serious about saving money.
Note down your bills and regular outgoings. This includes all bills, for me this is: council tax, water, electric, internet, phone bill, car payment, websites, lottery, amazon prime, Netflix, Hayu, car insurance – then include your regular extras. I tried to do a rough guide for petrol each month, food and social. I also like to include a slight overspend to try and account for credit card payments etc.
Once you have this detailed spreadsheet you can see clearly how much money you have coming in and how much money you have going out. If you don’t have enough coming in to save you need to ensure that you cut down on some outgoings. Decide how much you want to save and see if you can identify where the outgoings can be reduced.
Don’t be scared to start small
Years ago when I was about 18 and started my first full time job, my uncle told me to save whatever I could, even if its only £100 a month. I remember thinking ‘what’s the point if you not going to be saving a good amount?’ Well there’s ALWAYS benefit in saving any amount of money – anything is better than nothing right?!
If you can afford £100 a month to put into savings, it’s 100% better than saving nothing and if you can afford more – amazing! What’s funny too is when you think about saving £100, £200 £300, the accumulation of this money snowballs over the months, whereas if you think about what you can spend 100 odd pounds on, it really isn’t much at all. For me to save £100 a month, I would just need to cut out a weekend of dinner and drinks and choose to spend a weekend at home rather than driving back to see friends and family. Not all of these things are possible, but keeping it in mind is a really good idea. Moving onto my next tip…
Keep your finances in the forefront of your mind
Another great tip which works for me is going through your finances or checking your bank before going out. Before I go to Sainsbury’s (where I could genuinely spend about 2 grand in 2 mins – hello sushi and biccy boms), I check my bank balance and assess how much I CAN spend and how much I SHOULD spend and keep that figure in my mind. Usually the fear of having no money puts me into panic mode and I make far better choices when I’m shopping.
Rather than loading up my trolley with everything and anything I fancy; snacks/sweets/presents for friends and family (this is how I justify spending more – if it’s not for me I can buy it right??), I make better decisions about whether or not it’s an impulse buy or something I genuinely want and need.
Choose WHEN and WHAT to spend your money on
I’m such a culprit for indulging in the little things, but these are the things that build up. I love to treat myself to good food and a matcha latte as often as I can and I ALWAYS find an excuse to justify my spending (who doesn’t need a Tuesday pick me up, or a treat on a Thursday, or a latte because its raining???). By choosing WHEN I want these treats, I can try and cut down how much I am spending. For example, today I spent the morning dreaming about a venti Starbucks and hey, it’s only a fiver, BUT I could spend this today, OR I could have it tomorrow when I meet my friend. Chances are I will get one then anyway so would I rather have a coffee now, rushing around and grabbing it to go, or tomorrow when I can enjoy it with someone else? This is good for food too. Do I order Deliveroo because I just can’t be arsed to cook, or should I wait until the weekend when I can enjoy it with my boyfriend and we can both chill instead of cooking?
Keep the end goal in sight
Just remember what it is you are saving for. When you start to feel down about saying no to certain spend, or feel disheartened, just remember that there’s a reason. If you’re saving for a house, imagine how amazing it will feel when you can put your deposit down and when you have your own space. If it’s a new car just imagine having that car; where you will go and how happy you will be to get the keys. If it’s for a holiday, think about how exciting it will be to get away and how much better than will be than another pair of jeans.
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