There is no question, trying to save in your twenties is an absolute minefield and we’re British, no one talks openly about money, right?
If you’ve been to university it’s likely your first priority after graduating will be trying to keep out of your overdraft than actually putting money aside for your future. If you’re lucky to not have that problem or have a few years work under your belt you may have started to think about saving, whether it be for travelling, a new car, a house, or just your future.
But how? Where on earth do I start?
Let’s discuss a few ways to get into the right mindset in order to start saving. My mum always used to say ‘save half, spend half’, that was alright back when she was in her twenties as living costs were much less and house prices a fraction of what they cost now. I’d argue that for our generation saving money in a world where everyone flaunts their expensive lives online can be a real challenge. Even taking just one of the below tips on board could mean you start saving some serious dosh.
1. Open a savings account
If you haven’t already got one, open one. Simple as. It’s not just about the better interest rates it’s about differentiating your money into what is your savings and what is available for you to spend. If you’re worried about running out of money there are plenty of Easy Access savings accounts out there that allow you to move money easily through an app on your phone. Just that extra deterrent of having to take money out of your savings to pay for something may make you reconsider whether it is worth spending that money in the first place. Result, you have taken your first step to saving.
2. Write down your monthly outgoings
It’s always beneficial (but a teeny bit frightening) to see what you actually spend every month written down in black and white. Write a list of outgoings such as rent, household bills, loan repayments, gym memberships and transport costs. Make an estimation for how much you spend on things that have some flexibility like food and petrol. It’s sometimes helpful to do it in a table format with outgoings in one column and your income in another. The difference between the sum of your outgoings and your income is your ‘disposable income’ provided, of course, that you are not living out of your overdraft. This is essentially the money you have to play with after the cost of living is covered.
3. Set up a standing order to your savings account
One way to successfully start saving is to set up a standing order to transfer a small amount each week from your current account to your savings account. A standing order is a regular fixed payment from one account to another. You can easily set this up through online banking and choose an amount to suit your income and the frequency you wish this payment to be made. I prefer the little and often approach which is why I do it weekly, but you may prefer to send a larger monthly amount to get it out of the way. I then treat it like I would any other bill and include this amount in my ‘cost of living’ table we created in tip 2. I found this method means it’s all happening in the background and effectively I don’t feel like I need to do much.
4. Plan your meals
With the increase of apps like Dominoes, Deliveroo and JustEat, technology has not been our friend in terms of helping us save on the cost of food. Granted, these apps are great if you’re in a hurry or want something special that you are unable to cook yourself but it’s just far too tempting to rely on them regularly. The best way to cut costs when it comes to your food bill is, yep you guessed it, planning. Before your weekly food shop, write down all the meals you plan to have across the week, check the cupboards for any ingredients you already have and compile your shopping list using this information. Back when I was at university I used to go to the supermarket and just pick whatever I fancied off the shelves willy-nilly. Nearly every time it came to cooking I found I was missing a crucial ingredient and I’d have to run to the corner shop and pay 3 times the price for it. I now plan the food I eat in advance and write a shopping list, I factor in when I plan to eat out and as a result I save money on my shopping and less ends up going to waste. I also shop around if I have the time, I like to go to Aldi for the bulk of my shopping and then Asda for any of the branded products I can’t get hold of in Aldi.
5. Look at where you can save costs without missing out on much
Look at your outgoings and consider whether you can save costs by cutting out a few of those monthly bills. Got a gym membership but never go? That’s the first thing you can bin off. Paying for Netflix, Amazon Prime, Now TV and Sky? Do you need them all? Choose the ones you watch the most and cancel your other plans. Are you signed up to magazine you never read or beauty box subscriptions that send you make up you’ll never get round to using? Cancel them. This will increase the amount you have to play with every month and maybe you’ll be able to put these extra pennies in to that standing order to your savings account.
6. Make some tougher decisions about where you could save
This is the hardest tip of them all and one to think about when all the above isn’t enough for what you want to save for. Could you move in with your parents/ a friend for a period of time? Could changing your car for one that’s cheaper to run save you money? Maybe not going to that festival this year (that not many of your mates can make anyway) could help you free up more of your money? Everyone’s situation is different but often I see people who’ve benefitted financially from making these tougher decisions.
..set out your saving goals and consider which of the tips above could help you on your way. Remember, everyone is at a completely different stage in their lives and it’s up to you to work out what works best for you when trying to save money.
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