Welcome back everyone, hope you are having great holidays. Today I decided to tell you a story on how I managed to save a big part of my not so big income and how anyone can do it.
So I came to the UK about 3 years ago and the jobs I have worked so far haven’t been exactly super high paid – to be precise in the range of £5.80-£10/hr. I had months where I was making less than £800 and still managed to save so if there is a wish there is a way.
Lets get into all the things I am doing to save as much as I can :
1. Keep myself motivated
What helped me save in the first place was the motivation – the motivation to be financially free one day so every penny I was putting aside I know is getting me one step closer to freedom. Without motivation maybe you can do it for a couple of months but then you will just lose interest. It is important to always remember why you started , for example I have a list with my goals for the long-term and for the year. It helps if it is written on a piece of paper – writing on paper makes it feel more real to me and makes me being more honest with myself. It might be just me, but you can definetely try it.
2. Paying myself first
So by that I mean that when I get my paycheck in the end of the month I would sit down and think how much money I need for the next month and put all the rest in my savings. And in that I will only include paying my rent and food. In most months I honestly didn’t need anything else. A lot of times people think they ”need” something when actually they don’t. For example not many people actually need a new TV , a new pair of shoes when they already have 5 , a new watch when they already have 2 and so on. It requires a bit of discipline in the beggining, but when you see you savings compounding it will all be worth it.
3. Cut down on things I will not remember soon after buying
By that I mean impulsive buys which are not going to benefit me in any way except for giving me a temporary pleasure. Things which you are going to forget in a day, week or maybe a month. These can be things like takeaways, weird nights out for no reason in the middle of the week, sunglasses which you only wear twice , eating out in restaurants for no particular reason and so on. Of course no one is perfect and every now and again I make one of these impulsive purchases, but mostly I have saved quite a lot of money staying away from them. Sometimes it is not easy, but if you have your goals in mind you will get through it as I did.
4. Cut down on sugar
I used to spend a lot on fizzy drinks and chocolates when I was younger. Then I started slowly realising that these things have virtually no benefit to me, only downside. Since then I have completely stopped the fizzy drinks and I’m eating something sweet less than once a week ( I am working quite a lot so sometimes I actually need some sugar ) . That results in firstly better health and second a lot of money saved. Instead of fizzy drinks I drink water and instead of sweets I have a jar of honey at home. Both super cheap and much better for your health. Honestly it doesnt make sense for me to drink fizzy drinks anymore or eat chocolates.
5. Shop from outlets at certain time of the year
That helps me first buy better quality clothes and second save a ton of money. What I do is I go to an outlet in my area in January and buy the clothes I need. In January all the stores want to move all the leftover stock from Christmas so they make huge discounts. That way you can buy high-quality clothes from the best brands at super-low prices. I try to buy all the clothes I need for the year including summer clothes. It can feel a bit weird buying bathing shorts in January, but the prices at that time of the year are super cheap and you don’t have to go shopping again in the summer. This also applies for electronics , furniture and so on – pretty much everything is on sale in January and the biggest sales are in outlets.
6. All the side income money or one time event money – straight into savings
In that graph are things like tax returs, one time bonuses, profits from side hustles and so on. I know it can be daunting to use your annual bonus to buy that brand new TV that you really want , but your future you is going to thank you. Your current you might hate you for a while, but that will be just temporary. Just stick to your long-term goals and put the money into your investments and watch them work for your goal.
7. If you have the chance consider using a bike
I have saved a ton of money on using a bike rather then a public transport or a car for the majority of the time. The bike is free, barely requires any maintence and is good for your health. Of course if you live like 15 miles away from work that might not be a great idea, but in most cases it is. As a rule of thumb if commuting with bike takes you less time then commuting with public transport then it makes no sense not to use a bike. Of course there are some days when the weather is too english – don’t risk your health in the foggy rain just to save a fiver. But most of the time I am using my bike to go to work and see no reason not to.
8. Don’t pay too much for rent
In my opinion the rent should not be higher then 30% of your net salary. Just make sure you do a good research and find a decent place for reasonable amount of money. See what you can live without and that would save you quite a bit of money. In my case that was a big room for example. I am working most of the time so what I need from my house is to be as close to work as possible, be in a decent neighbourhood, have nice roomates and a nice bed and a shower. I dont need big room, a garden, a big TV , a garage and so on. Make sure that your place is suiting your needs and you will find yourself payin less on rent.
9. Cut out the cable
I don’t pay for TV and only pay a prepaid £10 a month card for my mobile phone. First it gives me a sense of freedom – I don’t have any contracts to cable companies , I don’t have to worry when I am moving houses, don’t have to worry about random overcharges or missing payments. I only pay £10 a month so I use exactly what I need – phone talks, messages and mobile data. Nothing less, nothing more. Of course everyone is in a different situation, but if you are paying £120 for the full Sky Package and only use it to watch the football on a Saturday then you can consider renegotiating your deal and cutting out some of the features you don’t use.
So that’s about all the things I am doing and I have managed to save around 40% of my income so far . The beauty of this is that as my income increases my expenses stay the same so my savings rate is increasing.
And please do no understand me wrong – you should not just blindly save money without enjoying yourself. I love spending money on traveling , catching up with my friends and a lot of other things, but there is a difference between money spend with a purpose and money spend without really knowing why.
Be smart with your money and your money will be smart for you.
Hope you enjoyed that read, wish you all happy Holidays and an amazing New Year !