Monday, 19 January 2015

Savings advice I would give to my younger self.


Do you ever feel like you don't know what's happening to all your money, despite living quite a modest life? We have all been there, right? I know I have. It was understandable when I was a student, but with two adults working full time it was time to save for our future together. 

I must admit, I wasn't amazing at saving, but I managed to put a couple of thousand pounds away towards our wedding, our first car and holidays. We originally planned to get a mortgage as well, but unfortunately it didn't work out, so we are still renting a property. If I could turn back time and have a slightly different attitude, we would be living in our own house by now. It is possible, you just have to develop a different mindset. Here is some advice I would give to my younger self. I hope you find it useful :)

- Sit down and make a list of things you want. Everyone is at a different stage of life and you can either save up for your dream holiday, a car, a designer handbag or a deposit for a house. Maybe you just want to have some emergency funds for your future to feel more secure. Once you have your goal in your head, you can start thinking about saving for it. 

- Choose your bank wisely. Remember that you don't have to stay with the bank you are using at the moment. I wasn't sure what to do when I started saving and when I went to my bank, the only thing they were concerned about was giving me the highest overdraft possible. Yes, overdrafts can be an easy way of getting extra cash when you need it, but you have to pay it back or you will keep paying interest and charges on it and the amount you owe won't change. Be smart about using your overdraft.

- Open a Cash ISA - individual savings account that let's you save tax free. I used a standard savings account that was linked to my online banking, but the interest rate on it was ridiculously low so it wasn't really beneficial. If you are saving big amounts of money, you want a high interest rate. But even if you only save £10- £20 per week, the cash is building up and after a couple of years you will have a decent amount of tax free savings.

- Calculate your budget. You have to know exactly how much money you are earning and how much you need to cover all your bills. Everything you have left after that is your disposable income and you can do whatever you wish with it. From my experience, most of it gets spent on groceries, meals out and takeaways. I also used to spend a fortune on clothes and makeup. It wasn't anything expensive, but it all adds up and you start wondering where all your money is.

- As boring as it sounds, meal planning is the key to saving money in my household. We spend most of our money on food and sometimes it is ridiculous. Did you know that one person can eat healthy, balanced meals for only £10.00-£15.00 a week. Yep! You just have to spend 15 minutes a week planning the meals and preparing your shopping list.

- Instead of going on a shopping spree every week and buying cheap bits and bobs all the time, invest in good quality, timeless pieces you will keep for longer (possibly forever). The way I look at it is simple - do I still have all the cheap clothes I bought 5 years ago? Nope. And I didn't even wear most of them more than once. Do I still have designer pieces I invested more money in? Yes, and they are well loved.

- Shop around! I think it is obvious for our generation to find the best deals, especially when you are buying something expensive. Who said you can't save and splurge at the same time? Whether it's a new phone or a new designer bag, shopping around can save you hundreds of pounds. Same with finding insurance, mobile contracts, broadband, electricity providers etc. There are always great deals available.

- Use cashback sites, voucher codes, points cards etc. You would be surprised how much you can save with them, especially if you shop online a lot. It's very rewarding :)

- Sell all your unwanted clothes, gadgets, jewellery etc. Anything you haven't worn or used for longer than 6-12 months, unless it is something special. I am a hoarder so I understand that it is easier said than done, but having too much stuff means that you don't even use 10% of it and you simply don't need it. 

- If you love going out, but want to spend less money on it, check out restaurant deals online. The savings you can make are incredible, but you still get to enjoy yourself the same way you used to.

- Love parties, but you feel like you spend far too much when you go out? When I was at uni, I didn't have a student loan. I worked for every penny myself, so I knew how hard it is to earn a living. I still loved having a good time with my friends, but instead of going out all the time, we preferred house parties and we had even more fun! Whether you drink alcohol or not, it is always cheaper to do cocktails at home. Same with food - homemade pizzas, sushi, canapes etc.

- If you have kids (like me), you will know that they cost a fortune. They grow out of their clothes really quickly, they want new toys etc. I buy 90% of Zachary's clothes on sale, mostly in supermarkets. The quality is great and I can stock up on basics fora couple of pounds. Same with toys - I always get the best deal possible and don't go wild with presents.

- The last tip, but probably the one that can save you a huge amount of money is staying with your parents, if they are happy with the idea. I moved to another country when I was 18/19 so this doesn't apply to me, but the amount of money you can save this way is huge . If you have a great relationship with your parents, it is the best thing you can do. 


Saving doesn't mean that you have to stop living your life and become a Scrooge. You can live your life to the full and save or save to experience new, amazing things, travel the world and treat yourself to the things you are dreaming about. If I didn't save money, I wouldn't be able to afford our wedding, holidays or visiting my family abroad. The next step for us is hopefully getting a property, which means a hefty deposit is needed.



Please share your saving tips below.


Sandra



  
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