Moving out of your childhood home and navigating the big, (sometimes) bad world is overwhelming and with work, socialising and paying the rent, even thinking about saving money can feel like an impossible feat. But don’t panic, because we’ve come up with some simple steps to help you get on top of your finances and feel in control again. Welcome to our September Savings Series where we’re discussing all things finance and budgeting. Tune in next week for our tips on how to eat healthy on a budget and the following week, items you should invest in now that will help you save in the long run.
Be aware of your spending and your financial situation
Now, this might sound daunting at first, but once you have everything laid out in front of you it all becomes a lot less scary and feels easier to get a handle on. First things first, create a spreadsheet – stay with us we know it sounds scary – to help visualise your spending and create a budget for yourself. Input your monthly income and then add your monthly fixed expenses. For example; Rent, household bills, travel, groceries, gym membership, Spotify etc. This will allow you to then see how much income you have left over for things like your favourite, some-what overpriced coffee, eating out with friends, a Sunday yoga class or those new trainers you have been coveting. And if you’re looking to save, this will also allow you to see how much you could be saving each month. Once you have it all laid out, it will allow you to understand your weekly, or even daily, budget and help you to stay on the right track with your spending. There are tons of easy Excel tutorials online or, if you have an apple, Numbers is also easy to use and won’t take you long to get to grips with.
Budgeting apps are your new best friend!
If the above sounds a bit too complicated, there are completely free apps like Monzo which keep track of your spending and create personal budgets for you in a matter of a few clicks.
Here’s how it works:
Once you have signed up to Monzo, they send you a debit card (it’s bright pink – bonus) that is linked to an app on your phone. Within the app, you can easily access your spending summary and see how much you are spending, on what and where. Having decided your weekly budget, you can set yourself a weekly or monthly budget and transfer that amount onto your new card. This way, if you really don’t trust yourself, you can put the card linked to your current account somewhere safe and only use your Monzo Card when you are out and about! Plus, the app will alert you if you are spending too quickly in certain areas and show you where you are going a bit overboard… (*cough* Pret *cough*) You can also pay friends and receive money with a simple click, making those dreaded IOUs from flatmates and friends a thing of the past!
Evaluate your spending priorities…
When budgeting, it is so important to take the time to sit down and think about where your priorities lie with regards to how you spend your money. Obviously, things like any outstanding debts should be the top priority of your spending, however, after that, it is worth going over your daily spending and deciding where to put your money. For some, extra income means date night at a nice restaurant, or a Net-a-Porter haul or a membership to the plush new Pilates studio down the road. However, if you are looking to save money it is important to evaluate what you could and couldn’t live without. This might mean looking for more cost-friendly alternatives, for example simply making your coffee at home or in the office instead of buying it out could save you around £20 a week or £1,040 a year! Or doing your yoga practice at home rather than at a studio could save you an average of £50+ a week (based on Londoners going to 3 classes a week). Small savings like these could then go towards a trip away with your best friends or saving for fancier dwellings – it all makes a difference!
In order to save money, it is also crucial to be really honest with yourself, something that we can all find difficult. This could be asking yourself whether you really need a new outfit for that party or could you find something at the back of your wardrobe or borrow from a friend? Or realising that you don’t really use Amazon Prime, Spotify or Netflix enough to warrant coughing up the monthly charge. It can be hard, but if you take a deep breath and put that money into your savings account you will thank yourself in the end.
Change the way you hang out with your friends
One thing that can be really tough when you are living on a budget is socialising. Going for dinner after work, drinks on Saturday night and having brunch on a Sunday with friends will really start to add up after a while, but we get it…the FOMO is real. So, here are a few ideas to make socialising fun for you and your bank account as well.
- Have dinner parties at home
Dinner parties are an amazing way to see friends, eat great food and not feel the panic of paying the bill at the end of the meal. Cooking for a crowd might sound expensive, but it doesn’t have to be. Recipes such as this Lentil Dahl are super cheap to make but look, and taste amazing. Take it in turns with your friends to host, and the guests can bring the wine or something yummy for dessert like dark chocolate or berries. It might not sound as exciting as going out for sushi and cocktails, but trust us, dinner parties are intimate, fun and the best way to catch up with your loved ones.
- Go for runs or walks with your friends to catch up
Turn exercise into a time for chatting and seeing your friends. Take your workout outside and go for a jog, run or do HIIT in the park for a fun, sunny sweat session. Not only is this completely free, but it is also super motivating to work out with friends. The time will fly by if you are motivating each other to keep going – a little healthy competition never hurt anyone!
- Explore free events going on in your area
Just because you are budgeting doesn’t mean you can’t get out and experience new things! In cities such as London, there will always be something fun going on – and a lot of the time entry to these events are free! We love to scour Time Out for the best offers and free events going on near us. Take a friend and make a day of it!
Finally, be open and honest about your budgeting plans with your housemates, friends and family
Sometimes it can be awkward when your friends are on a different budget to you and you have to turn down invitations for drinks or dinners out. We understand that talking about money can be super uncomfortable but, if you are open and honest with your friends about how much you are able to spend and why you want to save, the chances are they will be totally understanding and have major respect for your financial savviness. Additionally, it is likely that you’ll discover many of your friends are in the same position and will be happy to do wallet-friendly activities alongside you!
If you enjoyed our budgeting tips, stay tuned for the 2nd and 3rd instalments in our September Savings Series!
words by Lucy Edgerely