It’s time to get real about how much we spend and save.
To help us do just that, each week ask someone to track their spending for a week and share it right here, as part of our series, How I Save.
We also ask them to share their general approach to saving, then give them some expert advice that they (and we) can learn from.
This time around we’re taking a look at the finances of Lucy*, a 28-year-old living and working in London.
How Lucy saves:
I earn £36,540 a year and in my savings account right now I have £18,000 in a savings account and £2,000 in a Help to Buy ISA.
I’ve saved this much money by really cutting back on everything.
I started seriously saving 18 months ago by just vastly reducing my spending. I’ve been making batches of soup to eat all week for lunch, really budgeting my food and just making sure I really think about anything I buy before I check out.
The main way I save is budgeting hard and putting everything into savings when I get paid. I use Monzo, separating things into savings and then a pot for my bills. I get paid on 15th each month but my rent comes out on 8th so I need to make sure I have that set aside.
I’m saving for a flat, solicitors fees and furniture. I’m buying a flat and moving in with my partner and we’re currently waiting on my mortgage application coming back.
I have enough for the deposit and fees but I’ll keep saving for everything we need when we move in. There will probably be a few months of overlap though as my lease for my rented flat doesn’t end until March so I want to have something spare for that too.
My saving really went up a notch during lockdown as I went to stay with my parents in early March and they kindly fed me and didn’t ask for rent. With no real expenditure, I was able to save around £1,200 a month (I was still paying my rent and bills back in London but I bought almost nothing else). I stayed there for six months and was able to top my savings up by £7,500.
Since being back in London, I’m still barely spending anything and still adding around £800-£900 to my savings. Getting to my goal much quicker meant I decided I would be able to buy a flat through the Help to Buy scheme back in the summer. My parents were able to help with an extra £5,000, which is currently in my account too.
Lockdown made me realise just how much I was overspending still, even though I thought I was doing well with saving. I was saving around £300-£400 a month before lockdown and progress was slow. Being able to save much more really boosted me.
Although I cook a lot and usually bring lunch to work, I would waste money on eating out or ordering in just because I was being lazy. I was also really bad at not planning my meals well enough and wasting food but since coming back from my parents’ house, I do a meal plan, shared with my flatmate, do one weekly shop (and occasionally a small top up shop for some fresh things) and every week our fridge is almost empty.
I struggle with saving because I love online shopping and eating out. I’ve really managed to cut back in the last year. I’ve always loved a bargain though and my boyfriend calls me Voucher Queen because I never buy something without looking for a discount or way to save.
How Lucy spends:
Monthly expenses:
- £725 for rent (including council tax and water)
- £34.82 for phone bill
- £61.00 for gas and electricity (split between two)
- £44.50 for broadband (also split between two)
- £14.99 for Spotify (split between three of us)
- £20 to my flatmate for magazine subscriptions and monthly home insurance
- £5 to Asda for my monthly delivery pass
A week of spending:
Monday: £5.99 for some tempered glass screen protectors on Amazon after throwing my phone down the back of a radiator. After a tense 20 minutes trying to prise it out as it slowly called through everyone in my phone book, I rescued it and miraculously, it was in one piece but the screen protector I had on was completely ruined. At least it was that rather than my actual screen. Decided buying a new one was worth it because I’m incredibly clumsy with it.
Total spent on Monday: £5.99
Tuesday: I didn’t buy anything.
Total spent on Tuesday: £0
Wednesday: A friend reminds me I owe I’m £6.99 for some pizza we ordered the week before. We got a deal on Domino’s so it was pretty cheap.
Total spent on Wednesday: £6.99
Thursday: It’s the end of the week and we haven’t planned this far on our meal plan as we tend to just go for whatever is left. I was considering going to the shop for potatoes to make mash to go with the sausages we have but instead use our last egg to make a toad in the hole.
Total spent on Thursday: £0
Friday: End of the week and time for our weekly shop. It’s my day off and I wake up after a great sleep feeling cheerful so offer to go and buy croissants from the great bakery at the end of our street for my flatmate and I. They cost £1.30 but are huge, delicious and so fresh.
After planning all our meals out, I head to do our weekly shop. I pay for a regular shopping delivery as I am in the vulnerable category and not keen on going out too much but I completely forgot to check out the order in time this week.
Instead I mask up and head to our local ‘big’ supermarket and sadly things are a little pricier than the supermarket I get a delivery from. I have to top up quite a few jars and sauces this time so end up spending more than usual.
I buy some of our fruit and veg from out local greengrocer, which is sometimes more expensive but I like being able to buy exactly what I need, plus they do huge bunches of fresh herbs for 99p that are twice the size as the packets in the supermarket. I am also really conscious about single use plastic so this helps cut out what I can.
I spend a total of £46.48 but £14.82 of that is covered by my flatmate. We split food for dinner but the rest is breakfast, lunch and snacks for me. A total of £31.66 for food this week.
Total spent on Friday: £32.96
Saturday: My partner and I buy our sofa, which is £1,199, but obviously well accounted for within the savings. It’s our biggest purchase for the flat but we’ve been looking at it for a long time. I don’t spend anything else.
Total spent on Saturday: £1,199
Sunday: I spend £7.99 on a dumpling press kit from Amazon. After spending hours making gyoza, I decide it’s a gadget that is worth it but then I store it in the place with all the other things I have bought but rarely use and have second thoughts.
I also buy a jar of kimchi for £3.50 – I need it for a recipe and could make my own but it’s only really good after a week and I want it for tomorrow. It’s on Prime so I know it will be delivered in time.
Total spent on Sunday: £11.49
Total spent this week: £1,256.43
How Lucy could save:
We spoke to the experts over at Plum, the smart app for managing your money, to find out how Lucy 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:
Hey Lucy, thanks for sharing your money diary with us this week.
First thing, kudos to you for being so close to owning a flat! We know how difficult it is to reach such a milestone so well done.
We’re already huge admirers of your budgeting skills. You tick all the right boxes when it comes to managing your money: setting goals, creating different pots (or Pockets as we like to call them at Plum) for your savings and putting money away the moment you get paid.
You definitely have a strategy going on already but let’s take a closer look at your saving and spending to see if there’s anything else to consider.
Spending
When it comes to spending, your use of the word ‘planning’ is music to our ears! No need for us to remind you of the benefits of doing your meal prep ahead of time here. And sharing a dinner budget with your flatmate is something that we’ll be copying from you from now on.
As you already highlighted, shopping and eating out are the two categories on which you have a tendency to overspend. Those particular categories can be a weak spot for many of us, but there are still ways to get to grips with them.
It’s good to see that you’re already paying close attention to every item that goes into your basket. A good strategy is to use the ‘30-day rule’, where you write down the items that catch your eye and keep track of them to see how you feel about the purchase once you’ve had time to cool off..
However, if from time-to-time you can’t resist the temptation to buy something new, why not see if you can earn rewards as you spend. There are a few options to choose from, but with Plum you could be getting Cashback on brands such as Asos, SimplyCook, Groupon and Wickes (which could be useful when it comes to doing up your new pad).
We also love that even during this tough time you choose to support local businesses and get some bits from your local greengrocer. The past months have really emphasised the importance of supporting your local community, and you’re a shining example of this in action.
While there might be more expenses being back in London, it doesn’t mean that there are no tricks you could implement to stash some more away. You could, for example, check whether you can save extra money on your bills.
If you’ve been with your provider long enough you might be overpaying on bills (according to The Competition and Markets Authority, over £4 billion a year is lost in the UK because we’re too loyal to our existing suppliers), so it’s worth checking whether you could make a quick switch and save.
If going through millions of comparison websites looking for the best deal doesn’t sound like your idea of an entertaining evening, there are money management apps (like Plum) that can do this for you automatically.
Saving
It comes as no surprise that the COVID-19 pandemic has affected everyone’s spending and saving habits.
You did an amazing job of saving during lockdown, even if staying with your parents and out of London helped a bit too.
When it comes to saving, having an emergency fund set up in case unexpected things happen is essential. We love that you’re already planning for any additional fees you might incur when buying a flat, but don’t forget to also consider other life emergencies that may crop up at the most inconvenient times!
A good way to tuck that extra money away for a rainy day is by introducing automation into your personal finances. For example, Plum uses AI to calculate how much you can afford to set aside every few days. And because Plum adapts to your spending, you won’t be left short of cash for what’s important, plus you could end up tucking more away over time without even really noticing it.
*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/2020/10/22/how-i-save-the-28-year-old-with-20000-saved-who-managed-to-boost-her-savings-in-lockdown-13462362/
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