Welcome back to How I Save, our weekly personal finance series that takes an honest look at how we spend and save our money.
Each week we ask someone to reveal exactly how much money is in their savings account, track their spending for a week, and share their approach to managing their money.
It’s all in the effort of opening up the conversation around our money habits and upping all of our financial skills.
This time we’re nosing around the spending and saving of Leona*, 27, a trainee psychologist living in London.
How Leona saves:
I earn £36,070 a year and in my savings account right now I have £35,000.
I’ve saved this much money by being strict with my savings and setting up standing orders to my various savings accounts. I also live at home with my parents and pay for everything upfront with cash rather than use credit (eg car insurance, phone bill).
I’m saving for my first property.
The main way I save is by paying myself first, setting up the standing orders to the various non-withdrawal savings accounts. Most banks only allow you to save £250 a month max, so I had to set up around six different fixed-term savings accounts in order to put away the money I needed properly.
I also have a Help to Buy ISA and a Lifetime ISA that I put £4,000 in once every year. This gives me a government bonus of £1,000 annually. I have a strict budget and keep to a spreadsheet on my iPhone to keep track of my spending.
I struggle with saving because I can’t be bothered to cook on most days and different food delivery apps send me discount codes, which tempt me into spending.
How Leona spends:
Monthly expenses:
- £100 on therapy
- £17 on Spotify and Netflix
- £15 a month to my union
- £60 on petrol
- £60 on beauty (waxing and nails)
A week of spending
Monday: I bought a £15 takeaway because I had an assignment to write and the hour spent on preparing a meal seemed more taxing.
Tuesday: spent £50 on therapy for an hour. This isn’t a necessity, but I have found it essential to manage my emotional and mental wellbeing
Wednesday: I spent £12 on takeaway as I received a refund on a clothing item I had bought and thought I would use some of it on food, rather then going to Tesco for a food shop.
Thursday: I spent £70 on dinner with my friend. I treated her to a nice Thai meal as she recently got a promotion.
Friday: I spent £30 on hair products from my local beauty supply store. I am dyeing my hair and had to buy a lot of products to do it.
Saturday: I spent £10 on Amazon buying a fiction book to take my mind off of my studies.
Sunday: I spent £30 on my little brother – he wanted credits for an online game and I thought he deserved a treat.
Total spent this week: £217
How Leona could save:
We spoke to the experts over at Plum, the smart app for managing your money, to find out how Heather can put aside more (and what we can learn from her spending). Please note that tips from Plum do not constitute financial advice.
Here’s what they said:
Hi, Leona! Thanks for sharing your week with us. First of all, we’re loving your commitment to managing your money – so give yourself a pat on the back!
While you’re already a spreadsheet extraordinaire implementing great strategies for your finances, let’s take a closer look at your saving and spending to see if there’s anything else to consider.
Spending
It looks like you’re doing great at budgeting money to spend on things that contribute to your overall wellbeing and give you a well-deserved break from studies (and current times as well).
Your total spend this week was £217, with 45% of your spending going towards takeaways and eating out. For most people, having a separate takeaway only budget would be too big of an ask but you seem like an ultra-organised person that could benefit from creating one. Separating the leisure and eating out budget and setting a monthly allowance dedicated for takeaway only is definitely something you could look into with your skills.
We know that studying and working can leave little time to spare for cooking at home but how about dedicating one evening for meal-prepping? You could have at least a few meals ready in one evening and might even discover that cooking at home will give you a well-deserved break. Bonus: you’ll save some hard-earned cash.
While you definitely have a strict budget, technology can come in handy and help you see the little things that might be difficult to uncover with a human eye. Did you know that Plum offers a feature called True Balance? It takes some of the guesswork out of budgeting and calculates how much of your available balance is safe to spend… once any regular payments due before your next payday have also been accounted for. We have a feeling you’ll love it.
Saving
Leona, you’re already implementing a few strategies that seem to be working well for you – paying yourself first, setting up standing orders, and taking advantage of the government bonus on Help To Buy ISA.
Once it comes to saving, it’s really important to find a unique strategy that makes sense to you – and we think you have it all sorted!
We know that life can sometimes get in the way and, once it does, here’s a little trick we like to use: just close your eyes and imagine the moment you pick up the keys for your first home. Once you see the bigger picture, putting money aside might just become that little bit easier.
You could also step up your game by automating the process with help from a money management app like Plum. You could look into something like 52-Week or Rainy Days challenges to gamify the process of setting extra aside and take the pressure off yourself.
Who said money management has to be all work and no play? Definitely not us.
*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 alerts on deals and discounts, join our Facebook Group, Money Pot.
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source https://metro.co.uk/2020/10/01/how-i-save-the-27-year-old-trainee-psychologist-with-35000-saved-13354796/
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