If a recent survey is anything to go by, a lot of us have already abandoned our big 2020 saving plans.
It’s tough to keep up the motivation to squirrel away money once the New Year’s resolution energy has passed.
But don’t give up hope – or at least know you’re not alone in the struggle.
Each week, How I Save takes a look at the reality of a different person’s spending and saving, tracking what they buy in a week and how they (and we) could save better.
This week we’re chatting to Andi*, a 27-year-old HR manager living in London. Andi has been renting out a flat in Manchester since September.
I’m a 27 year-old HR Manager living in London.
How Andi Saves:
I earn £46,444 a year – a £36,400 salary plus £8,244 rental income.
In my savings account right now I have £3,000 and I’m really proud of this. I’ve saved this much money by putting aside rental income from my flat.
I’m saving an emergency fund and tuition fees for a master’s degree (the interest rates on the goverment Postgraduate Loan genuinely scare me, so I’m going to pay cash.) I’m also saving for any unexpected costs related to my rental property.
The main way I save is by having my rental income go into a separate bank account, which is cumbersome to access. I purposely didn’t set up online banking for this separate account, so the extra admin involved in accessing the account deters me from spending the money there.
I struggled with saving because up until recently I was living alone in a flat – which was relentlessly expensive – but now I’m living in a house-share and earning more so I can afford to save for a rainy day.
When it comes to saving I can be quite disciplined, but low pay held me back so much, that for about three years I couldn’t save a penny. It was really difficult and I save more aggressively now because I remember how precarious my financial situation was and I’m determined to not go through that again.
I feel really privileged to be able to save again.
How Andi spends:
Monthly expenses:
- Rent £200
- Bus pass £81.50
- SIM only contract £10
- Gym £25
- Netflix £11.99
- Mortgage on my buy-to-let £460
- Service charge on my buy-to-let £86.
A week of spending:
Monday: I bought a £1.10 salad from Sainsbury’s to have with some chicken breast I brought in from home. Also picked up some dried mango for 85p and a bottle of Evian for 75p.
Topped my Oyster £5.50.
After work I spent £30.57 on groceries at Whole Foods Market. I’m trying to eat more healthily, so it’s handy to get loads of superfoods and organic produce in one place.
Total for Monday: £33.27
Tuesday: Didn’t meal prep last night so spent £4.21 on lunch from Leon and £1 on chewing gum. Breakfast and dinner were free.
Total for Tuesday: £4.21
Wednesday: Had a bad day and it reflected in my eating habits. Lunch was a Pret soup for £3.80 with a 35p bread roll. Topped it off with mini donuts for £1 and a chocolate bar for 50p.
For dinner I had a KFC Snack Box for £1.99. £5 for getting my gel manicure removed. Also topped up on toiletries at Boots where I spent £13.11.
Back on the healthy foods tomorrow!
Total for Wednesday: £25.75
Thursday: Porridge from Pret for breakfast for £2.50. Fancied an indulgent lunch so spent £9.55 on a naked burrito and drink at Tortilla. £3 on a box of chocolates to cheer up a colleague who seemed down. Dinner at home was free.
Total for Thursday: £15.05
Friday: Monthly bus pass for £81.50. Two croissants for £1.60 and a 40p pot of yoghurt for breakfast.
Lunch was a burrito, this time £6.50 with a student discount.
On the way home, I spent £2.50 olives for my partner, 64p on a punnet of plums and £5.50 on lottery tickets. Didn’t win a penny!
Total for Friday: £98.64
Saturday: Wanted to treat myself so I spent £18 on UberEats.
Total for Saturday: £18
Sunday: Nil. Didn’t order anything or go anywhere. A day of rest, indeed.
Total for Sunday: £0
Total spent this week: £194.92
How Andi could save:
We spoke to the experts over at Plum, an AI assistant that aims to boost your bank balance, to find out how Andican save better (and what we can learn from her spending).
Note: the advice featured is specific to one individual and doesn’t constitute financial advice, especially for a London budget.
Here’s what Plum said:
Hey, thanks for sharing your week with us!
There’s lots to be proud of here. It sounds like you’ve struggled with money management in the past so it’s amazing that you’ve found a solution that works for you and are feeling more financially secure.
Let’s take a closer look!
Saving
Moving to a flatshare so you can rent out your own flat is a big sacrifice, but it sounds like it’s worth it. £3,000 saved in a few months is amazing – kudos to you! You’re well on the way to paying for that Master’s degree.
You’re onto a trick with keeping the rental money separate. You know the old adage, out of sight, out of mind? Well, it’s definitely true when it comes to saving money.
Automatically squirreling savings away is a smart move, as you’ll be less tempted to spend it when you can’t see it in front of you.
You don’t say where you’re keeping your savings, apart from that it is separate from your everyday spending in another account. As you are likely to have a date in mind for when you want to start your Masters, you can take advantage of savings accounts that lock your money in for a certain amount of time, usually with more favourable interest rates.
Another option if you’d like to try and grow your longer-term savings is via investing, for example in a stocks and shares ISA. While investing can yield high returns, it’s not a suitable strategy for any money that you might need quick access to in the immediate future. And of course, your capital is at risk with investing, so it is a less secure place for your hard-earned cash.
And don’t forget… you can save for something fun, too! Set aside small amounts separately and let another little pocket build-up, just for treats. Because, you know, this is pretty important too!
Budgeting
With a good amount tucked away at the start of the month, you should make it through to payday without a worry! But that doesn’t mean making a budget wouldn’t come in handy.
Right now food makes up the majority of your weekly spend. Costs seem to vary depending on whether you have what you call a ‘good’ day or a ‘bad’ day. Erratic spending like this can be quite stressful and can cause you to feel like you’ve failed when you haven’t.
Rather than categorising your days like this afterwards, think about deciding at the start of the week how much you want to spend on ‘everyday’ food (the weekly shop, cheap lunches) and how much on ‘treat’ food (the takeaways and snacks). You could even put the ‘treat’ money in a separate bank account with a good app to keep track of your spending, like Monzo or Revolut, so you know you’ll stay within your limits. Alternatively you could squirrel away extra automatically using Plum, so you’ll always have a stash of cash for emergency treats.
The benefit of budgeting like this is it ensures you aren’t overspending and leaves you guilt-free to treat yourself. Treats are really important too!
The struggle is real when it comes to mid-week cooking! Bulk cooking on the weekend is worth doing if you like to have a lunch prepared and want to resist the lure of expensive lunches out, but don’t have much time (or energy) to prepare meals in the evening.
Oh, and all biases aside, plums are always a good choice!
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 alerts on deals and discounts, join Money Pot, our new Facebook group.
*Name has been changed.
MORE: How I Save: The 30-year-old web developer earning £40,000 a year with £10,000 saved
MORE: How I Save: The 28-year-old teacher in London earning £38k with £5,000 saved
source https://metro.co.uk/2020/02/06/how-i-save-hr-manager-landlord-12192956/
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