Discussing money has often been described as uncouth or taboo, a subject many shy away from in polite society. Although I’ve never been a particulary money driven person, it’s always facinated me how ‘cloak and dagger’ the topic is. Shrouded in mystery! I think a lot of us would be in a much better finacial position if we discarded the hushed tones and secracy of it all and talked more openly about money management.
While I do think it should be taught in schools (how is it I know the first 5 digits of Pi yet have zero clue about mortgages?!) and parental guidence definitely has a big part to play in terms of how we see and value money. There comes a time when we ourselves need to role up our sleeves and get to grips with our own finances. In all honesty, I’ve always been fairly sensible with my money, however this past year when my income was almost halved overnight due to the pandemic. I decided it was time to really knuckle down and utilise the many (often hidden) benefits on offer. Now a lot of the time it’s easy to get lost or overwhlemed by the sheer amount of information. The technicle jargon surrounding the finance world can isolate a lot of people. It’s confusing, it’s perplexing and more often that not you’re left feeling lost. Well, not being able to leave the house for a year and a half has had its benefits – I studied up, took advantage of the best bits and really began to focus my energy on ‘saving smart.’ In the past 10 months I set to work on trying to increase my savings and in that time have managed to put aside £8,000. Want to know how I did it? Here’s how you can learn to save money too.
Managing and maximising your money
Change you money mindset –
This one seems obvious but it honestly took a global pandemic to really shift mine. Before, I wouldn’t think twice about eating out every day and grabbing a £3.50 coffee to go every morning. It goes without saying that this caused a huge dint in my savings. Another big thing for me was that I almost disregarded the need to have a large amount of money in savings due to the fact I may never realistically be able to afford to buy in London… which led to the mindset of ‘what’s the point?’ But there is a point! Whether it be buying property or not, it’s so important to have a decent amount of savings behind you. I decided to have two saving streams, one for long term and one for short. The short term is for expenses such as holidays, special occasions and taxes, with the long term being reserved for pension, property and potential future investments. In an ideal world the long term isn’t touched for anything other than the above so it can gain the maximum interest. To save smart you also need to shop smart. Look at each purchase and decide if you really want/need it and if you do, always check to see if there’s any discounts or deals available. For instance, I wait until the ASOS 20% off days if I’m making an order and always get discounted theatre tickets when going out to see a show. These little savings you make on your purchases will make a big difference further down the line. As the old adage states – ‘look after your pennies and the pounds will look after themselves.’ Pay particular interest to those monthly bills such as Netflix, Spotify, Disney+ etc. look how much you’re spending and evaluate which ones could potentially be cancelled, you’d be suprised how much money we lose each year due to things like ‘auto-renewal.’
Set realistic saving goals –
This one is so important and came with a lot of trial and error on my part. At the start I set my goals way to high, which led to me dipping into my savings account each month to pay rent which is so extremely counter-productive. Doing this also made me want to give up as I saw my savings as something so easily accessible it was like just another current account. When I finally sat down and worked how much I could realistically save each month without struggling, it was much easier to let it build up without dipping into it and therefore reaping the benefits by gaining interest.
Sign up to a savings app –
A huge game changer for me was downloading the Plum app. I decided to give it a go after hearing about it from a friend. Honestly guys, I can’t recommend this app enough, it’s a great way of seperating your savings from your day to day accounts. Plum is free to try and also offers different Plum subscription plans. After trying it for a few weeks, I decided to opt for the the ‘Pro’ option at £2.99 per month which offered additional features such as – a higher interest rate at 0.40%, cashback, round ups, diagnostic spending reports (that help analyse your spending) and multiple money ‘pots’ so you can set up different savings pots for different goals. Plum uses automated money management to put money aside little but often. You can set how aggressive you want to be with this, then when the app has ‘read’ your accounts, it starts to automatically make deposits based on what you can afford without it making an impact on your day to day. I also signed up to the Plum 52 week challenge whereby every Monday, starting with £1 in the first week, Plum will save £1 more than it did the week before. So in 52 weeks, I’ll have £1,378 set aside. On Plum I managed to save £1000 in 3 months without really noticing! Again, this app has been such an eye opener for me and has truly made saving so much easier – I would highly recommend to each and every person! You can sign up with my referral code here: https://friends.withplum.com/r/sKt6Qn
Set a budget –
Sounds cliche, but I can’t stress how essential this is. If you really want to start saving the best way to do this is by knowing exactly what’s coming in and going out regulary and then setting aside money that you can use for yourself alonside that. The rest = savings! I have Hallfax current account and check my online banking everyday. Halifax also allow you to set up mobile alerts to help you keep track of your spending, which makes budgeting easier as if you’re are close to reaching your weekly budget, Halifax will send you a reminder. I’ve been with Halifax since I was 7 years old and they’ve always been a great bank for me. I have both my current and credit card accounts with them as well as my Help To Buy ISA.
Open up a Life Time ISA –
So as I said, I actually have a Help to buy ISA with Halifax however sadly these were scrapped in 2019 and you can no longer apply for one. Fear not though, as a Life Time ISA or ‘LISA’ is the new go to. In the simplest terms possible this is free momey from the government towards either your first home or your retirement. Yes, you read that correctly – FREE MONEY! A Lifetime ISA (LISA) lets you save up to £4,000 every tax year towards your first home or your retirement, with the government adding a 25% annual bonus on top of what you save. So to break that down further, that means you could get £1,000 for free every year. Although I do not have a LISA myself, having done my research and spoken to friends, Moneybox Lifetime ISA seems to be the most popular as it pays 1.25% interest on top of the 25% state bonus on top. To get the maximum £1000 free ‘top up’ you would need to save £4000 in a year which is roughly £77 a week (which sounds much more doable.) The maximum however is not essential and whatever you save, 25% of that final yearly figure will be added. It’s important to point out however that if these funds are withdrawn and used for anything other than buying your first home or for your retirement, it will cost you more than you put in as you will be charged 25% …currently this charge has been scrapped due to the pandemic but always read through the terms and conditions for any account you may be looking to open. That said if buying a house is top of your savings agenda then this is a no-brainer!
Free online resources –
The internet is full of amazing free resources focusing on the subject of saving, here’s some of the resources I used to help me with my money management.
The Break – The Break is the big break for millennials that want to step up their financial literacy and focus on their personal development and life goals. They are the online destination for women who desire to maximise and improve their lives in a number of key areas and The Break give them the tools to do so. It is a space to normalise talking about money and aspiring to achieve greatness, especially for women who so typically aren’t open about wanting more.
They also offer free budgeting tools and spreadsheets. https://www.thebreakresources.com/
Can’t Swing A Cat – Money Mess to Financial Success, the Can’t Swing A Cat blog helps you improve your financial situation and save for the future without sacrificing your happiness in the present. Whether you want to save for a deposit on your first home, travel the world or achieve financial independence, you’ll find plenty of inspiration here. https://cantswingacat.co.uk/
This Girl Talks Money – Bored of the same old financial information written by middle aged men in suits, Ellie started This Girl Talks Money to tackle the money taboo. Whether you have a little or a lot, Ellie is here to teach millennial women all the things about financial adulting that school forgot. If you’re looking for insights, advice, motivation and knowledge to help gain confidence and ownership of your finances, you’re in the right place! https://thisgirltalksmoney.com/
You’re Not Broke You’re Pre Rich – This book by Emilie Bellet that really helped change my mindset towards money and spending habits whilst not judging me for being a sterotypical millennial and splashing my cash on avocado toast and oat milk lattes. It’s relatable and informative in equal measure. http://bitly.ws/dIbV
Moneybox Lifetime ISA – If you’re looking to save for a house or save money towards retirement then the Moneybox LISA is considered the best on the market. https://www.moneyboxapp.com/
Plum Savings App – Plum is free to try and helps you to build your money without you really noticing. It uses an algorithm to ensure you can afford every move it makes. Sign up using my referral here. https://friends.withplum.com/r/sKt6Qn