I used to be absolutely rubbish at saving money. In fact, it became a bit of a running joke in our family that I’d have to spend money as soon as it entered my bank account or purse, because it was simply ‘burning a hole in my pocket’. Every tiny bit of birthday money I received, I’d nip out the next day and spend it as fast as I’d get it – meaning that I usually got bored of the things I’d bought rather quickly (ridiculous I know) and never actually saved up and had the satisfaction of purchasing something I really, really wanted.
When I started a new job in my gap year, I thought things might be different – so I set myself up with a savings account on my online banking app. I was earning about £1,000 a month from a 5 day a week office job, which was far more than I’d ever earned waitressing (which I hated – I was once told I was the worst waitress ever) and working in retail. I thought it was an enormous amount of money and I’d be able to save about half of it each month. However, it didn’t really work out that way.
As soon as it entered my bank account, it left again shortly after – as I treated myself to an assortment of clothing I probably never wore, various expensive takeaways, trips to the cinema every weekend and sweet treats. I didn’t even put any of it aside for a holiday! Instead, I frittered it away.
When I finally took a step back and looked at my bank statements, I was a bit horrified at just how much I was wasting. I had nothing to show for working for nearly 6 months, no savings and no money for a holiday or a ‘big purchase’. So, I reigned things in a bit and although I’ve had a few slip-ups, I am now a big saver rather than a big spender.
Above: a recent ‘big spend’ of mine was my trip to Southern Italy, we travelled around Naples, Sorrento and Pompeii!
I’ve spoken about my tight rein on savings in a couple of previous blog posts, which TSB picked up on and enquired as to whether I’d be interested in partnering with them, in association with their own savings accounts. Instead of trying to regurgitate all the technical mumbo jumbo (although surprisingly, TSB make things really easy) I thought I’d link the page above in case you fancied a nose – and instead, talk about my top 5 savings tips. I’ve seen lots of mentions on Twitter recently about panic stricken graduates coming out of uni with tonnes of debt and no savings. Well, if I can do it (who used to regularly see £0 at the ATM – always a depressing moment) – then you can too!
- Go through all your bank statements and put together a spreadsheet of how much you’re spending every month – and on what. The first time I did this, I was horrified and it sorted me straight out – however I do have a tendency to go off the rails a little bit with my spending, so I go through this procedure at least once every year. It helps to have a handle on your outgoings – and once you know this, you can see if you can lower things a bit. What do you spend in Tesco that costs £50 each week, could you cut that down to £25 in Aldi perhaps (we did!)? Do you really need to do two rounds on Boohoo this month (the answer is probably yes, but still…)? I figured I was spending far too much on silly little things I didn’t need. This frittered away money, I could have been saving.
- Budget for the month. If you know how much comes in every month, note down your ‘free cash’ and put it away into a savings account as soon as pay day arrives. Don’t even leave it in there for a day… it’s too tempting. Obviously you can still access it if it’s an emergency but it helps if the temptation isn’t there.
- Have a few savings accounts. Usually savings accounts have different interest rates, often effected by the amount of withdrawals you’re allowed to make per year. I actually have six savings accounts – one ‘main savings’, one ‘student finance’ (for rent), one ’emergency money’, one ‘travel money’, one ‘treats’ and a tax account. I put the money I know I won’t need into main savings and the money I don’t want to tempt me into ’emergency money’. If I haven’t had to touch it that month, it moves into my main savings and so forth. I’m quite proud of my little savings routine really! It’s definitely cleared up the need to fritter it away!
- Sort out your subscriptions. Aside from rent and bills, I only have a few subscriptions or regular outgoings (yes, one of them may be Netflix – but I NEED my PLL fix) however it often helps to review these on a frequent basis. I found I’d been signed up for something via PayPal that I’d completely forgotten about and it was taking £10 out of my account, disappearing without me really knowing (I think it was an ad free subscription to an American TV Stream). See if you can cut some of these out, or at least down. Gym membership – do you really need it? Or could you phone and negotiate a better deal? Anything you save as a result of toning these down, set up a direct debit to your savings account instead for the same amount!
- Save up for a large purchase. Whatever it is you fancy, it helps to have a goal in mind – even to have a separate savings account for it – and watching it grow! I recently purchased the most expensive thing I’ve ever bought (I can’t talk about this yet, but I will soon – I promise) and generating the money for it was quicker than I thought it would be because I was so motivated towards it. Whether this is your dream holiday, one of those snazzy new MacBook’s (that’s my next saving goal) or a car, having a separate savings account for this really helps and I’d definitely recommend setting up one specifically for this!
Do you have any savings tips – or are you saving for a large purchase at the moment? I’d love to hear your thoughts!