Ditching little luxuries…

Another day, another update.

While I thought through exactly what my budget is and how I will allocate my precious ££ to maximize my quality of life, I also did a bit of work on all the stuff I am going to stop spending money on…

Look at this. What a magical table. Who knew I was wasting almost £6.5k every year on stuff I do not necessarily need?! Not me!

Seeing this mapped out, actually, is quite impactful (at least to me). So, what are my mitigation options to make sure I do not spend on these categories?

• Weekday Coffees: Make coffee at home!
  I actually like drip/filter coffee the most, so I’m looking forward to this!
• Take-aways & Meals out: Batch cook & meal plan!
  The goal is to eat at home OR bring a packed lunch to work (we do have microwaves, so this should work out okay).
• Gym: Run!
  Last payment to go out with my April paycheck; then I’m picking up running again. (This will force me to properly train for the Royal Parks Half as well!)
• Nights-out: Free events!
  I am not that big of a fan of going out, but I am thinking of replacing this with walks in the park and lower cost, but more enjoyable activities with friends (free events etc).
• Clothes & Beauty: Only buy what I need, not what I want.!
  And if I need something, check in the charity/2nd hand shops. Skin care is precious to me, and it’s not a category I’m willing to sacrifice much on. However, beauty like manicures and random new make-up purchases will certainly stop.
• Monthly Cinema Tix: Netflix it!
  Well, I have Netflix. And, if I really want to see a movie, I have my monthly pocket money that I can use to buy it or rent it from iTunes at the fraction of this cost!

As said previously, this does not mean I will not ever get a coffee from a shop or go out for a meal. It just means, I will be seeing that as a treat that comes out of my pocket money, rather than my MO. I shall report back (tracking meticulously nowadays), how this is working out!

Budget

I have never been one to budget. Why you ask? I simply lived by one rule (thanks Mum!):

Until the mid-way point to your payday only spend what you must (groceries, transport etc), from the mid-way point onwards, you can splurge a bit (take-aways, nights out, clothes etc).

This worked quite well for me, and in the past few years, I managed to pay off my student loan in full and save 22k, travel frequently every year and enjoy life a bit without building up credit card debts. This, I must say, I am quite proud of.

However, since I have decided to build a life here in the UK, I might just as well get serious about a house deposit! And, let’s be honest, I cannot pretend to be a serious saver, unless I have a budget that I stick to, yes?

So, what does my budget look like?

My monthly paycheck is currently my only source of income, that will be split into three categories:

• Necessary expenses (although, you could argue that internet, mobile and Netflix are not quite ‘must haves’)
• Spending money (groceries, pocket money, travel/flights, and the biggest category for London: transport costs)
• Savings

The ‘spend money’ category is quite generous, I must say. However, I fully plan on saving anything that is left over at the end of the month, so the goal is to spend minimally in that category.

I realize that I might get a bonus, cash back or interest throughout the year, but I am not banking on those 100% as they can always fall through and so they are not included in my budget. If anything does come through, it will be immediately squirreled away to my savings account – out of sight, out of mind!

 

Goal

So, what’s the goal here?

From March 24th 2018 to March 23rd 2023 I will attempt to reach a savings total of 100k.

While 100k is a nice round number, there are a few more reasons why I chose that goal:

• Decent sized deposit for the South East (especially, London)
• Achievable, yet challenging number to reach
• Requires average savings of 49-50% of my take-home pay over the next few years

I am currently sitting on 22% of that total. Despite the head-start, I do have quite a long way to go.

What counts vs. what does not count?

I will not be counting my pension contributions (totaling 15% of my gross pay as my employer has a great scheme) towards this goal. However, I will be counting:

• Save for Shares savings (and any resulting profit when those shares mature)
• H2B ISA savings
• Bonus payments

I will be tracking progress at the end of each pay-cycle (the day before pay day) by comparing account balances. I.e. I’ll take a snapshot of my accounts on March 23rd 2018 and then on April 23rd etc.

While I will probably encounter a few up and downs on my way to the 100k, I am hoping that the general trend will be upwards and positive. There are a few big expenses this year as well, but hopefully, they will not put massive dents in my plans…fingers crossed!

 

 

A list about me…

Female. Singleton. The my-mum-wishes-I-would-stop-fantasizing-about-getting-a-dog-and-get-on-with-becoming-a-baby-factory-type. Approaching the 30s this year (hello wrinkles, I can’t wait to see you!*).** Product Manager by day, politics obsessed by night. Highly educated. Former refugee. Immigrant through this scheme called ‘free movement of people’. Brexit-hater. Harry Potter fan. United Kingdom lover. Renter in the Big Smoke. Horse Rider. Hiker. Pianist. Aspiring Violist (no, not Violinist). Aspiring Saver. Over-thinker. General bore on everything else.

 

 

*Who am I kidding?! I already have plenty sexy wrinkles….
**Do remind me I said this when I decide to get my first round of Botox!

The Journey Begins

If you are a millennial, like yours truly, you have probably been diagnosed with what can only be termed the millennial epidemic: The Avocado Habit.

Most probably, this diagnosis came from either your well-meaning, yet older relatives, Gen Xers at work or some douchey financial adviser or so called ‘entrepreneur’ trying to make a name for himself in the news (see here). And whilst we can all heartily acknowledge that we have enjoyed our fair share of smashed avocado on toast, take-aways and Matcha-lattes, we cannot but laugh at recommendations to save money by ditching these oh so small, yet enjoyable, treats…

So in order to prove or disprove this hypothesis often posed by various internet trolls, I want to see how much I can actually save by following some of this tedious, yet probably well-meaning advice, e.g. by ditching avocados on toast and coffee over the next few years…

So, what does this actually mean?

What this will not be about:

• Poverty tourism: Poverty is a real issue in our societies and no laughing matter. I will not be presuming to understand individuals and families in these circumstances, nor will I try to emulate their living situations.
• Extreme Frugality: Self-explanatory, no?

What this blog will be:

• Creating a savings goal
• Budgeting (and, for once sticking to a budget!)
• Savings activities informed by recommendations millennials have been receiving for the past decade
• Tracking meticulously & holding myself accountable through this blog

What this blog might include:

• Any random political, societal and personal musings