We do it all the time:
“I deserve this chocolate bar”,
“I need wine after that day”,
“I want those shoes!” etc. etc.
Everyone has at least one thing they love spending money on, and this can hold us back from having the things we really want.
Look At It Differently
Traditional thinking is that you must cut back fully in order to save/pay off debt. This, in my opinion is miserable! You don’t have to miss out! You just need to accept that sometimes you need to make some small sacrifices (which are not allowed to be too hard) in order to find the monthly savings you need for a bigger payoff later.
Time and patience are the key words here.
The modern world screams at you to “BUY NOW, PAY LATER”, but this is why many of us have debt.
I learnt that in order to have things I truly want, I would need to sacrifice (but not too much) for a while to have it. Often it’s just a spending habit I’ve formed that once broken, can be put to better use.
These are the 12 steps I take to save up for the BIG things I want.
- IDENTIFY WEAKNESSES. Write down what your biggest spend-weaknesses are. Include anything you spend money on regularly because you feel you deserve it and it makes you happy – that includes mani-pedis, getting your hair dyed by a professional, cigarettes, books, chocolate, Starbucks coffee, clothes etc. Mine are:
- Eating out
- WHAT IT COSTS PER MONTH. Next, write down as accurately as you can what you spend on each item per month (go to a few old bank statements to get the figures. BE HONEST. You’re only cheating yourself if you don’t. Add all the numbers up to get your total monthly amount that you spend on treats.
- WHAT IT COSTS PER YEAR. Now, times this number by 12 to get a yearly figure.
E.g. £500 per month = £500 x 12 = £6,000 per year
Sit with your number a bit. Did it shock you? Take a moment to see how it feels for you and what you are saying to yourself in your head. DO NOT BEAT YOURSELF UP!
4. WHAT DO YOU WANT (DO YOU REALLY REALLY WANT!)? Think of something you really want to have or do that you said you couldn’t because you couldn’t afford it. It could be a holiday, or like me, a pair of Louboutin shoes. How much money do you need for this? When do you want it by? Make it realistic. Obviously, unless you have no outgoings, and/or savings set aside, having the cash to pay for an all inclusive holiday to Florida is not going to happen in one paycheck if you don’t want your landlord murdering you in your sleep on your return for not paying the rent this month.
5. WHAT’S THE GOAL? Now we need to make it happen. Work out how much per month you need to be putting away into savings to pay for the item or experience.
E.g. Holiday to Mexico for 2 people. 12 months. Total cost £2000. Therefore, I need to be saving £167 per month for the next 12 months to pay for it.
6. WHERE WILL YOU FIND IT? Do you have this money spare every month without leaving yourself short or going into debt? If yes, well done – see the next point in the list. If not, what stuff are you buying (as listed in number 1) that could help you find the money for this without feeling like you’re depriving yourself? For example:
- Cut back on manicures and only have them 6 times a year rather than 12 times per year. Put the remaining money you would usually spend into your savings account. Get a friend to paint your nails in the months you don’t have a manicure and maybe offer to do theirs! If you usually have infills for acrylic nails, can you make them last that little bit longer in between, or choose a less-expensive salon to make a few savings?
- Same with your hair – my mum saved over 50% by switching to a cheaper salon. The salon doesn’t look as glam as the old one, but they do the same job, and it lasts just as well. Happy days!
- Coffees – can you get a smaller size and put the savings in your account? Could you buy a refill cup and make your own at home using the same coffee beans as your favourite brand? Ask for these things for birthday or Christmas and you have even more savings.
- Pre-drinking! The tactic claimed by students, but should be brought back by adults. Get your ladies round for a pre-party getting ready sesh, complete with tesco or aldi bought prosecco. Be careful not to get so wasted you don’t get in to a club, but at least it will save you some money when you’re out!
- Get someone to pick you up from a night out rather than book a taxi. Or use the pooled-uber service wherever possible. Taxis are a massive drain on resources (especially if you drink the taxi money!). Could you stay at a friend’s overnight instead and get the bus or train in the morning? I’m thinking hangover group breakfast?
7. SAVINGS ACCOUNTS. If you haven’t done so, now is the time to open a savings account. Don’t overcomplicate it. Nowadays you should be able to open one with your regular bank. Don’t use one that requires a monthly fee. The interest rate will be pants anyway, so don’t think too hard about it. Use comparison sites like www.moneysavingexpert.com to help. Make sure there are no penalties for taking money out whenever you want, and if you struggle with easy access, put the money into a saving account that you can’t get an app on your phone for, and which is based in a different part of the country. Like Scotland if you’re from London, or Cornwall if you’re from Manchester for example. Trust me, the psychology around this doesn’t lie.
8. REMINDERS. Name these savings accounts as the thing you are currently saving for. My natwest account allows me to give it a nickname. Mine is called “Garden” at the moment because I have shed loads (ha-ha, no pun intended) of stuff to buy for it over the next few months.
9. MAKE IT YOUR MISSION. Remember you’re only aiming for the small monthly amount you have vowed to set aside. Tell everyone this is your goal. Don’t be afraid to put a chart on your wall to colour in (or use gold stars) to mark out when you get the next milestone. Yes, I’m 33 and I do this. Its free, and makes me feel brilliant when I get to colour in another milestone. Celebrate (just not with much or any money!). I’ve put an example of one at the end of this posting for you to print off and do this yourself. (P.S. if you have kids they will love it)
10. MAKE IT AUTOMATIC. You could also use a savings robot like plum. Its a Facebook messenger bot that takes little amounts of money out of your account on a weekly basis (but not so much as to put you into debt). The small amounts of money really build up. I’m using it to save for a new laptop at the moment!
11. MAKE A WISHLIST. If you are tempted by ANYTHING ELSE on your path to getting the original thing you want, write it down on a “wishlist”. Once you reach your goal, you can pick something off the wishlist and repeat the process again. If you are willing to cut out more treats then by all means do so, but I don’t want you to feel deprived. Its horrible not having any treats at all in your day to day life. A glass of wine or a haircut aren’t going to kill off your savings if you are still putting aside the agreed amount. You should never feel like you can’t do anything. You can do what you want, but only if you budget your money wisely!
12. SAY NO TO FOMO. Peer pressure – avoid this like the plague. Just because all your mates are going on holiday, it doesn’t mean you have to. FOMO or “fear of missing out” is one of the reasons why I got myself into so much debt. I went on holidays I couldn’t afford, and spent more money than I had on a night out. You don’t need to do everything. Keep your goal in mind, say no thank you, and give yourself a pat on the back for sticking to your guns. You’re worth it, and your goals are worth it!
So there you have it- my 12 steps for saving for the things I really want!
What are you saving for? Let us know in the comments below, or come on over to my FREE PRIVATE FACEBOOK GROUP!
See you next week,