If your New Year’s resolution is to save more money, take comfort in knowing you’re not alone.
Loads of us feel like we’re rubbish at dealing with money, and loads of us are hoping 2020 will be the year we sort out our finances.
Oh, and loads of us are struggling to make that happen, so it’s helpful to find out how other people are doing it (or where they’re going wrong).
That’s the idea behind How I Save, a weekly series in which we track people’s spending and get them expert advice on how they (and we) can save better.
This week we’re nosing around the finances of Nick*, a 30-year-old web developer renting a one-bedroom flat alone in Bagshot, Surrey.
How Nick saves:
I work as a web developer in Guildford and I earn a fairly good yearly salary of £40,000.
In my savings account right now I have £10,000.
The main way I have saved was by putting aside a set amount each month straight into savings. That way, even if there was nothing left in my account at the end of month at least I knew had saved some money. I’ve saved this much money partly due to my savings account being a Lifetime ISA, meaning at the end of each year, I get a free 25% bonus on any money I’ve saved (up to a maximum of £4,000 a year). I put away £4,000 in both 2016 and 2017 so now have £10,000.
I previously shared a flat with two friends until we went our separate ways in February. Since then my living expenses have obviously risen quite a lot. It took me a few months to adjust to not being able to afford the same lifestyle as I could when sharing.
I have been hoping to buy my own place for a few years now, and it just seems to be further and further away from actually happening as each year goes by. I have £10,000 saved in a Lifetime ISA which I will use towards buying my first property but since moving in on my own, I have been unable to save any money at all (and I need at least twice this to buy in my area).
I think I am generally pretty good with money, but I just have some high expenses. Recently I have been recording my purchases on a spreadsheet to keep track of how much I was spending on food, petrol, electricity etc.
I enjoy cooking a lot and very rarely get takeaways; I cook for myself pretty much every evening. I nearly always make enough portions each night to be able to take food into work for lunch the next day (or two). I also usually make a meal plan for the week and work out exactly what I need to buy, and I try to shop at the cheaper stores like Aldi, or Tesco, but sometimes for convienience I go to Sainsbury’s or, even worse, the small Co-op opposite my flat (which is expensive).
I enjoy cooking a lot so I often experiment with different dishes and buy less common ingredients which mean the price of my shop is probably higher than average. On average I believe I am spending around £180 a month on food.
I also currently have about £700 on my credit card which is from some leftover spending from a holiday last year, buying furniture for the flat in February, and some gig/festival tickets throughout the year. I pay off £100 a month of this.
That leaves me without around £466 a month to spend and/or save. Last month was expensive as I had accommodation and travel for the aforementioned wedding and some payment towards my car service (it needed some new tyres), but I would say I generally spend most of my disposable income on socialising – going out for food and drinks with friends. I’ve got used to having more nights in with friends instead of always going out, but a night out could easily set me back £80 or more with food, drinks and travel.
I don’t often buy new clothes or shoes etc. But I usually get my hair and beard cut once a month which sets me back around £20. Occassionally I will buy tickets to gigs which can cost between £20 and £50. A bad habit is often buying cans of drink or snacks at lunchtime when I don’t really need them. Its only £1-2 most days of the week but it does soon add up.
How Nick spends:
Monthly expenses:
- Rent – £775.00
- Council tax – £109.00
- Broadband – £28.00
- TV License – £12.50
- Electricity (average monthly cost in the winter) – £70.00
- SIM-only mobile phone contract- £22.00
- Car finance payment – £314.00
- Car insurance – £38.00
- Car service plan – £28.00
- Spotify (part of a family plan) – £2.50
- Google Drive and Apple iCloud storage – £3.00
A week of spending:
Monday: I had some friends stay at my flat over the weekend, and I had the day booked off work. We went to the pub for some lunch and drinks before they headed back to the airport.
Spent £34.00 on a meal and a few rounds of drinks. I stopped off at the shop to pick up a pizza for my dinner that evening – £4.
Total for Monday: £38.00.
Tuesday: Realised I didn’t have anything in the flat for breakfast, so picked up a meal deal from the shop on my way to work – £3.50.
Being out with guests over the weekend,meant I didn’t really cook meals, so I didn’t have leftovers that I’d usually take to work with me for lunch either. Went to the shop at lunchtime and grabbed a ready meal for £3.25.
I met a friend for a drink at the pub after work, but he paid so nothing spent there. I needed just a couple of things for dinner so I went to the shop once I got home and spent £3.29 on ingredients.
Total for Tuesday: £10.04.
Wednesday: As per a Christmas tradition, I booked an IMAX ticket to go and see the new Star Wars film with some friends and family for Christmas Eve – £17.25.
A colleague is leaving work and moving away so we went for some farewell drinks and a curry after work, spent £20.00.
Total for Wednesday: £37.25.
Thursday: I had breakfast at home, had leftovers for lunch, food for dinner already, and no plans after work, so I didn’t spend anything today!
Total for Thursday: £0
Friday: I was running low on petrol, so put some in my car to last me until next payday – £25.00. Headed up to London after work to go to a gig with my brother.
Grabbed some food on the way, and drinks throughout the night came to £36.55.
Total for Friday: £61.55.
Saturday: I had previously had a meal out with some old colleagues planned, but a few people couldn’t make it last minute so we decided to reschedule for the new year. Resigned myself to a quiet night in but was convinced to go to the pub by a friend who offered to pay, so no money spent today!
Total for Saturday: £0
Sunday: Had a lazy day in, watching Netflix. Didn’t have much food in the flat, so picked up a frozen pizza for my dinner – £1.90.
Total for Sunday: £1.90
Total spent this week: £148.74.
How Nick could save:
We spoke to the experts over at money tracking app Cleo to find out how Nick can save better (and what we can learn from his spending).
Note: the advice featured is specific to one individual and doesn’t constitute financial advice, especially for a London budget.
Here’s what Cleo said:
It’s expensive to live alone. It can also be expensive to not be lonely. That being said, we still think you can make room for savings.
Main vice:
Hint: we don’t think it’s the gigs.
You say you think you spend about £150 a month on food for all your meals, but you spent over £100 on food and drinks this week alone. Socialising is really important, so we’re not suggesting you scrap it altogether. However, there are definitely cheaper ways to socialise than hitting the pub!
For anyone reading: looking back through past spending is a good way to identify questionable habits. There are apps out there that let you ask exactly how much you’ve spent on certain categories…
Where you’re going right:
£10,000 in your savings account. Nice one.
For anyone reading: moving money straight into your savings on payday is a winning tactic. Out of sight and out of mind – not out of pocket!
In theory, well done for the meal planning. In practice, try and get a bit better at it!
Spending plan:
We think you’ve got a monthly income of around £2,500. Kicking off 2020 with a budget will help you save for your own place.
Safe to spend: £1,552 a month. Your monthly expenses clock in at £1402. We’ve also given you £150 for your food and £50 for petrol.
Safe to save: £450 a month. You’ve got this.
Safe to burn: £448 a month. That’s over £100 a week for eating, drinking and entertainment.
Bottom line:
The room to make savings doesn’t magically appear. You’ll need to tidy up elsewhere first!
*Name has been changed.
How I Save is a weekly series about how people spend and save, out every Thursday. If you’d like to anonymously share how you spend and save – and get some expert advice on how to sort out your finances – get in touch by emailing ellen.scott@metro.co.uk.
If you want more tips and tricks on saving money, as well as chat about cash and alarms on deals and discounts, join Money Pot, our new Facebook group.
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source https://metro.co.uk/2020/01/02/save-30-year-old-web-developer-earning-40000-year-10000-saved-11989740/
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