Turning 25 has ignited the rude awakening of the importance of saving and investing in ‘the future’ that suddenly seems to be fast approaching!!!
Saving was always something I had kept way in the back of my mind, but when I got to the point where my bills and life expenses were swiftly increasing, just as much as my desire to ‘look cute’, AND my desire to be an entrepreneur, AND my desire to ensure I work and earn enough set up my future family for a great life, I realised it was time to buckle down and ‘sort my life out’ for real!.
As a result, ‘Serious Saving’ has become a fundamental part of my monthly routine! Let’s face it- the wedding, house, bills, kids, vacations and car simply aren’t going to pay for themselves!
The more I think about the position I’m in now and position I desire and aspire to be in, the more I realise that there are honestly countless reasons why it’s actually so important to save! And when you realise how much smart saving can really do for you, it will make you want to save even more!
1. FOR A RAINY DAY – Theres nothing worse than having an unexpected bill or debt come through the post! Having that unsettling feeling in the pit of your stomach, or feeling the burn as the funds leave your account, knowing that you’re about to be broke until next payday #Stress!
2. FOR YOUR DREAM WEDDING/HOME/CAR – Being strict and consistent with your savings, makes the possibility of one day purchasing your dream home or car feel more realistic and tangible. Plus, it may mean you may be able to obtain those things a lot sooner than you think!
3. EXPAND YOUR OPTIONS FOR OPPORTUNITY – Having money put to the side means you can truly invest into your dreams and obtain all the necessary equipment and resources to push them to their fullest potential.
4. FOR VACATIONS – Saving a substantial amount for a holiday means you will not only be able to afford good quality all inclusive accommodation, but will also mean you will have money left over for shopping, food and excursions that will create lasting memories.
5. TO TREAT YOURSELF– For women especially, having money on the side to get your hair done, nails done, pedicure, brows, wax etc is part of our monthly pamper routine. Furthermore, theres nothing wrong with treating yourself to a new dress or bag once in a while -if you can afford to!
6. PAY OFF SCHOOL FEES– University Debts can be very expensive so having money put aside to pay off your student loans can really ease the burden of debts so they don’t creep up on you, or get worse later.
7. FOR FINANCIAL INDEPENDENCE- you don’t want to have to rely on your parents, family or Friends forever. It’s a great feeling to be financially independent, and know that you can not only take care of your day to day needs, but have something left over for an emergency.
8. FOR RETIREMENT- Making sure you have something saved for when you decide to retire, helps you to still be able to maintain a good quality of life and have a sense of stability.
9. FOR YOUR CHILDREN- Putting money aside each month towards your children’s future and education will really help them to have the best opportunities and resources in their future.
10. FOR PEACE OF MIND- Being in debt or being scared to check your balance is not a fun feeling. Knowing that you always have something saved on the side eases that worry and fear.
HERES AN EXAMPLE OF HAVING A GOAL AND PLANNING HOW TO SAVE TOWARDS IT:
SHORT TERM SAVING
(these things can help build your credit score for long term ventures e.g. buying a property)
Putting adequate money aside each month to go out as direct debits or standing orders, means you have no way of missing payments or ending up in debt
This can be more monthly payments like
– Car Insurance
– Car maintenance e.g. petrol, oil, tyres etc
– Gym Membership
– Gas and Electric Bills
– Phone Contract
LONG TERM SAVING
For me this consists of things like:
– Saving towards buying the house where I’d like to start my family
– Saving Money to invest in my business ventures
– Savings Accounts for my future children
I can wholeheartedly say I have definitely not always been financially responsible which has left me in tight situations in the past. Not to point where I’ve missed payments, but to the point where I have had to sacrifices things that really mattered to me, or luxuries I was looking forward to, to take care of my fundamental responsibilities.
EFFECTIVE WAYS TO SAVE-
1. IDENTIFY THE DIFFERENCE BETWEEN A WANT AND A NEED-
– That tab you have kept open on your laptop with that new pair of shoes that sitting in your ASOS basket for the last week, is not as important as paying off bills you know you have outstanding. I remember going to an event with my friend and her not being able to call me because her phone had been cut off due to missed payments and she had no data. I remember telling her off for even coming out in the first place to spend even more money on drinks, food etc. But I also remember thinking #WhatKindOfLifeIsThis? I didn’t want to go through my entire life living pay-check to pay-check. I don’t just want to survive, I want to live! So that day I promised myself to never allow myself to be in a position where I couldn’t afford to at least cover my monthly necessities and bills. I had to learn to always prioritising needs.
– Going to every single persons birthday party, event, baby shower, wedding when you know your account isn’t exactly ready to accommodate all the food, drinks and petrol you’ll use to get there isn’t really wise! Sometimes you have to sacrifice and make sure you are investing just as much time in you as you do in everyone else till you at least obtain your ‘needs’, then you can focus on your ‘wants’
2. MAKE SURE YOU ARE EARNING ENOUGH TO BE ABLE TO SAVE THE WAY YOU NEED TO
You cant expect to save £800 a month if you are only earning £1200 a month and your bills and expenses total about £500 – be realistic about how much you need to be earning.
I am a huge advocate for having SECONDARY INCOME- you have no idea how handy and productive this will make you!
The diagram above demonstrating how to plan out saving towards a property highlights how you can determine how much you really need to be earning to meet your goals
3.OPEN SAVINGS ACCOUNTS
Have savings accounts for both short term and long term savings like the example above so your monthly expenditures will not impact your long term goals. The diagram above shows an example of how you can map out your finances. Some savings accounts earn a much higher interest than others e.g. Everyday Saver vs ISA vs Bonds etc. Do your research to determine what is best for you. For example, a Help To Buy ISA comes highly recommended for those trying to save towards a property due to the interest you can earn- read more about them https://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/
4. MONITOR YOUR SAVINGS
Use a table, an app, a budget sheet, your spouse, or a notepad to keep track of your monthly ins and outs.
For me this has helped me determine what I need to spend less on and what I need to invest more in.
Some months you may need to spend or save more or less, (e.g. when you’re about to go on holiday and know you’re going to spend money) so make sure this is accounted for and act accordingly to keep you on track with your goals.
Hope you found this little snippet into saving helpful! Saving is an area I could talk about for ages based on both my own mistakes and learning experiences. I’m still in the early stages of this journey so I definitely intend to share more as I learn.
But I hope this will encourage you to make wiser decisions as you work towards your goals x
Don’t be an April Fool! lol Start your saving journey sooner rather than later 🙂