Saving. Love it or hate it in order to scrape that wonga together we have to do it. I happen to quite like saving and drawing up a plan of how to reach a certain target. Today I thought I’d share with you my planning process and a few tips on how to get to those gorgeous new shoes, that holiday of a life time or that illusive first home, which is currently what I am channeling all of my efforts in to.
Saving only works if you are realistic, honest and if you’ve got all the facts. What do I mean by this I hear you ask!
- I am all for dreaming big and a firm believer that ‘if your dreams don’t scare you they aren’t big enough’ but you’ve got to be realistic. If you earn £100 a week it is going to take some time to save £1mm considering the fact you’ve got to live at the same time as saving.
- Know what you spend. Track your outgoings for a month, all those take out coffees, lunch dates, nights out, write it all do and at the end of the month sit down with a calculator and add it up. Be honest with yourself as to where your money goes. Nobody is judging you on the shares you seem to now own in Cost Coffee but without seeing it infront of you its easy to over look it
- Have all the facts. Know what your incomings are, the bills and direct debits you have to pay. Know the bottom line which you can actually spend each week.
Lets get started then. I track my monthly spending in my bullet journal and then do all my maths and budgeting on excel (the maths is done for you!). For arguments sake lets say we are saving for a pair of Louboutins, working 15hrs per week at £7 an hour.
Step 1 – Work out the unavoidable outgoings you have. Be realistic – you’ve got commitments and you’ve got to live. Be honest – What are you actually paying out of that you’ve got to pay i.e. any loan repayments, any finance from anywhere. Have the facts – Maths doesn’t work if you get the number wrong to start with!
Step 2 – Get out your spending tracker and a calculator. Now its up to you how to track your spends. I just write down the amount spent because I know I don’t squander but if its your first time it might help to write down where you spent it too. Add everything up and prepare for your jaw to hit the floor. You might need a drink to deal with it
Step 3 – Put all you hard work of Step 1 & 2 together. Take the bottom line of what you’ve got to pay out, add that too what you spend each month and then take all that away from your incoming wage. Simple. If you find yourself in the red then you are in trouble. Whatever is left is what you’re ‘saving’. This where the depressing part comes in – take the price of what you’re saving and divide it by the amount you are managing to save each month. In my example that’s the cost of the shoes divided by the amount saved each month equals number of months it will take.
Step 4 – This is where the honesty comes in to a world of its own. Go back through the spends, this is where it helps to know where you’ve spent what. Do you have a coffee every day on your way to work? That could be a saving of £58.65 a month! Realistic thinking is needed too, is it possible to cut out all of that spending in one month? Your lifestyle might not accommodate that but could you give up one a week? Do you smoke? Could you cut down the number of packets you buy each week?
A meal deal and a coffee every day costs about £5.55. Can you take a packed lunch or food from home? If you’re having something for dinner on the evening could you take what is left for lunch? Saving is a lifestyle change. Can you cut back on petrol by walking to work once a week? Little changes across the month equate to a massive saving.
It sounds easy enough and trust me once you’ve done it for a month it become straightforward and you don’t have to sacrifice the things you love. I don’t. Don’t look sight of the amazing feeling of satisfaction and achievement when you’ve brought it! You may even find that when the money is in your hand you don’t need that pair of Louboutins you’d rather put the money towards something else.
Some of the changes I’ve made:
- I buy lunch out once a week – I’m quite strict on this, its generally on a Friday but if I buy it out on a Wednesday for example then I make a conscious effort to take a packed lunch on Friday.
- I walk to work when the weather isn’t too horrendous. A little rain never hurt anyone but a torrential downpour makes me think twice about pounding the pavements. Not only does it keep you fit and tone your legs it saves petrol!
- I write a shopping list when I go shopping. If its not on the list its not going in the basket.
- I schedule nights out. i.e. cinema on Cheap Tuesdays, dinner with Friends once a month, there are loads of social things you can do which don’t cost a penny! Visit the local park, go to a gallery or library, have a night in with a movie, a gogglebox get together, the list is endless.
How do you save? Do you struggle? What was the last thing you saved for?
What are you saving for? How realistic are you being? How long will it take you to buy it?