I couldn’t even grasp the concept of saving up when I was in university. I saw things I liked and I bought them (no, second thought). I got £400~ as a bursary every month and I also worked prior to going to university so had savings to lean back on as well. BUT, When I finished university, I had £0 to my name. Nothing. If you do the maths….that’s almost £15k without including my savings. I was happy. That’s all that matters. Right…? (it is!).
I got a full time job and my first paycheck came to my hands on Monday 25th September 2017. It was the best feeling ever. However, after experiencing the broke life post-university and also not being able to tell my mum that I spent ALL my money (I valued my life and hopefully she won’t ever see this), I realised I needed to buckle up. It took me 4 months to buckle up if I’m honest. I didn’t know how to read a paycheck, I didn’t know how much money you needed to get by and I still really wanted to buy clothes and shoes - I was clueless (young and dumb).*cue - Khalid: Young Dumb and Broke*.
Somehow (by the power of Gods), I saved all that money back up in a year. Yes, £15k in a year.
P.S. I have modified this over the months to find the best way to save up efficiently, so you don’t have to suffer like I did.
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I opened up my bank account and organised my finances. I organised my spendings into three piles: unnecessary spending, essential spending and direct debits.
1. Essential spendings will give you a rough idea of the amount of money you will always need so that you can to buy food every month (this does not include your direct debits).
a. For the sake of this post we’re going to say the money you need to get by is £300.
2. Unnecessary spendings is what you have to tackle. Now after spending £15k, I just stopped spending on clothes and shoes for a year - you gotta do what you gotta do. This section will help you save massively if you do it properly.
SIDE NOTE: If you are unhappy and buying a pair of shoes is what keeps you going...then buy the pair of shoes. Saving up money is not more important than your well-being.
3. Now look at your direct debits, do you really need to pay for that useless gym membership or in my case, that fashion magazine that you never read. The answer is no. Just stop paying for things you do not need to pay for. That £10/month is £100/year, and £100 is still money. What you will be left with, is the amount of money you always need to have in your bank account to ensure you pay your rent or bills or phone contract.
a. We’re going to say this is £1,000 (I know rent is not that cheap). I’m tamil, tamil people don’t pay rent when they live at home, so if you live at home and don’t pay rent...YOU ARE LUCKY, don’t take it for granted, save up them coins.
***we’re going to pretend that your monthly salary is £2,000 (based of the average UK salary - I actually looked it up, tax has also been taken into consideration)***
Step 1
Keep your main bank account for your direct debits. The one where your paychecks will come into and where your direct debits be taken from. It’s a safe space. It will always have £1,000 in the account, all your bills will be paid, there’s nothing to worry about ever again.
Step 2
Get a Monzo card (https://monzo.com) - or something equivalent, in this card you will put £300 every month, you can set it up as a direct debit from the main account if you want or move it yourself, it’s up to you.
The perks of this card is that, every time you spend, it tells you. You are made more aware of how much you spend every month and therefore you can make conscious decisions about your spendings. I also like Monzo because I can also use it abroad too.
Step 3
Now if we do the maths you’ll be left with £700, if you have a savings account. The easiest way to save is to set up a direct debit into a savings account and move the money out the account of the day you get paid. Why? So you never know what it feels like to have that money.
That's all.
In a year, you’ll have £8,400 sitting in a savings account.
PEP TALK:
- When you go through your bank accounts you’ll realise how much you could have saved. You might beat yourself up about it but after some time you’ll be able to get over it. Sometimes the decisions you make were what you thought was best at the time, so it’s okay.
- Sticking to the budget is even harder, mine was exceptionally difficult because I stopped eating out as much, I didn’t buy clothes and shoes (I had enough), I actually cut down on buying people presents and straight up said I have no money (it was true). To help myself, I unsubscribed from a whole bunch of emails and unfollowed shops on my social media. Out of sight, out of mind.
- That savings account...at first, you’ll want to take money out of it but trust me when I say, watching the money slowly build up makes you so proud of yourself.
- Lastly, I’m lying if I say I always stuck to it but remember...saving up money is not more important than your well being.
I saved up not knowing what I was saving up for but actually it helped me fund going on multiple holidays and also save up for a deposit. You don’t have to save up but there is equally no harm in saving up and having a back up plan. This works for me but if it doesn't work for you then it's fine, trial and error.
Thank you for reading :)
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