Saving Money Can Feel Easy

Five tips to adjust your thinking to the process

Like most of the people reading this; I am not a multimillionaire. I don’t invest in stocks and shares and I don’t have a hefty property portfolio.

I get a paycheque every month and I make it work with most of the same financial and social commitments as everyone else.

Yet I am always the one my family comes to if they need a little extra cash to tide them over until the end of the month. There are times when they need a larger chunk and will pay me back in monthly instalments because, at a flat rate of £5 and a cup of tea, my interest rate is better than the banks.

A third of Brits have less than £600 in savings, 1 in 10 have no savings at all — Charlie Barton, Finder (2020)

Before I had reached my teenage years I was being praised for my money-saving. During secondary school, I was given £10 a week for lunch and would only spend half. By the end of the school year, I’d have at least £175, which to a twelve-year-old is like hitting the jackpot.

Although they have always championed my habits, my parents, like most people are not great when it comes to saving. I mention this not to shame anyone, but to show the behaviour doesn’t have to be passed down, it can be adopted.

Here is the fundamental principle I started as a child which has stuck with me through to adulthood: Only spend what you needed.

I get a little more than £10 a week now, so that’s great, and for easy numbers let’s say after tax at the end of each month I am left with £2000.

Here is how I break down my finances:

Rent — £500. It’s both fixed and mandatory so it’s the first to go. I don’t even view this money as my own.

I am left with £1500, this is my money, and the first thing I do with it is split it in half (old habits die hard).

Savings — £750. A huge chunk of money, but I try not to waver from this amount.

I am left with £750 which is where the calculator comes in to make sure I am only spending what I need.

Direct Debits — £100. Netflix, Phone, Bills etc. I try to make sure my direct debits never go over this amount.

Work — £300. This is my travel (£200) and lunch (£100) expenses for the month.

Socialising — £200. I’m likely to go out for dinner or drinks once a week, sometimes twice, sometimes not at all.

Groceries — £80. This is calculated based on my personal shopping and eating habits for one.

I am left with £70 which I put into a holiday savings account.

No surprise: Women budget better than men […] Big surprise: Young people like budgeting — Debt.com (2019)

Calculate

This is essential when it comes to saving. I only save what I can manage to spare, and the only way I know what I can spare is by knowing how much I need to spend. The direct debits and travel amounts are fixed, and I have assessed my own socialising habits to know I won’t spend more than £15 if I go for drinks or £30 if I go for dinner.

Cap Your Spending

By only making what you need readily available to you, you’re less likely to go crazy. Your brain makes it harder to justify getting ‘one more drink’ if you know you still have to pay for travel, and Spotify hasn’t taken that £9.99 yet.

I stick within my assigned £750 spending money as best as I can, even using it to pay back a set amount to my credit card if necessary. By not giving yourself much wiggle room you’ll stick to your boundaries.

Wiggle Room

I know what I just said, but a lot of the numbers are relative. You might only go for dinner once early in the month, meaning there is an extra £150 in there. It’s up to you what you do with this money. I tend to either splurge a little more on the food shop, buy something I’ve had my eye on, or use it to top up my holiday savings account.

Compromise With Yourself

Personally I don’t like taking lunch with me to work. It’s annoying when you forget it and it’s gross if someone before you hasn’t wiped down the communal microwave. Instead, I buy lunch every day capping myself at £5. I worked it into my calculations and justified it by cancelling one of my monthly memberships.

Be Flexible

Understand that life happens. I aim to save the maximum because some months I save the minimum. For example, I don’t put anything into my savings in December. It’s Christmas — there are presents to buy, a lot more social gatherings, and I can never resist a glittering decoration. The same goes for when it’s time to sort out my car: MOT, Service, Tax— that month I’ll wait and see how much things come to and then put what I don’t use into savings.

The 50/30/20 rule says to save 20 percent of your income. But it’s not always so simple. — David Weliver, MoneyUnder30 (2020)

Saving is habitual for me. I’ve been doing it so long I don’t know how not to do it. That doesn’t mean it can’t be taught. If you are starting out then the process is in a lot of ways easier to stick to if you have something you are saving towards. A car, a downpayment on a house, or a luxury getaway are typical saving categories, but you can also be saving for a rainy day, knowing it won’t drench you when it comes round.

Don’t worry, I know my saving techniques aren’t for everybody, and they shouldn’t be because everyone’s circumstances are different. I am no longer twelve years old, where I blew half of my saved cash on sugary snacks and a pair of trainers before my mother opened up a bank account for me.

If I didn’t pay rent, then I would save half of that example £2000 and put a little more away for a holiday. If I didn’t socialise much I would splurge on a few more subscriptions like Amazon Prime and Kindle Unlimited. If there was more than one person for me to worry about my grocery shopping would double, and there would be nothing extra to put into my holiday fund.

No two people or households have the same financial situations.

The main thing is to adjust your thinking to saving. Don’t look at it as a burdened chore, but instead a cushioned way of life. Assess how you spend your money, what you can cut back on, and what you don’t want to cut back on, then build from there.

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