As much as I crave at times a simpler, slower way of life (and often have to take myself off for hours for long walks, away from noise and crowds, so there is time to think and truly enjoy my surroundings without being disturbed) I’m also a lover of modern technology and am genuinely excited about new ways to do things all from my phone.
I’m a member of a number of ‘frugal living and money saving’ type groups. I look to these for inspiration and for new ideas on how to spend less and save more. I’ve never been in a safe place financially for most of my grown-up life, but I’ve worked really hard in changing that around the last 18 months or so and am at a stage where I feel a lot safer than I’ve ever done before. Am a big believer in a rainy day fund and food and basic necessity stockpiles! Call me a bit of a prepper if you like! Being prepared alleviates so much stress from my life that I really want to share with you the 5 things that are really helping me move towards my goal…
Number 1. Automated savings
Automated savings have been the single most successful thing I’ve done to start changing my life around so I’m going to talk about them first. By having money deducted from my wages it takes away the money I have available to spend and focuses me on changing my spending habits.. Numbers 2-5 (to be discussed in future blog posts) are the things I do to ensure I can survive on my income after I’ve put money into savings every month.
a) TransaveUK: I can’t recommend automated savings enough. It’s incredibly hard to stay disciplined enough to move money from one account to another and leave it alone so 18 months ago I started my first foray into automated savings through my workplace with a credit union called http://www.transaveuk.co.uk. My workplace works with TransaveUK to offer employee’s small loans to buy company shares (we are a 100% employee owned company at PMS Diecasting where I work). But via our payroll we also have an automated Christmas Club savings scheme and the option of also having an additional savings account. I opted for automated savings from my monthly paycheck into my ‘Christmas Club’ savings account AND into a regular savings account. Basically this money goes straight into savings and NEVER hits my normal bank account. For me it’s much easier to make do and go without if it isn’t there to spend than have it sitting there instantly accessible. YES it’s a struggle every month to do without a lot of things but every month I feel safer financially.
b) PLUM automated savings: Via Facebook for Android and via an app for iPhone is something I’ve signed up to recently. CLICK HERE FOR MORE INFO. PLUM analyses your regular bank account and through artificial intelligence makes choices for you to save small amounts of money throughout the month where it feels you can afford it (you can decline – it always asks you). Additionally it now has introduced an option to round up all your transactions to save even more small amounts of money. For instance a purchase of £5.79 would be rounded up to £6 and the 21p deposited in either your PLUM savings account or straight into your investment accounts if you decide to set these up. And that IS something I’ve done. I’ve deposited £200 in a Stocks and Shares ISA via the Facebook app, 1/2 in a balanced fund and 1/2 in a growth fund. I’m just curious to see if there are alternative ways to build small amounts of wealth. TO BE HONEST I’M SCARED ABOUT RETIRING DUE TO LACK OF PENSION!
In parts 2-5 I will talk about the things I do every month to get by on my income after I’ve put aside my savings.
C xxxxx
Sounds like you’re on the way to a very good plan. Someone once told me “Don’t put all your eggs in one basket or one bank.”
I think that’s wise advice! xx
i completely agree……..having a rainy day fund and bulk foods just in case is always a great idea. love your blog! happy to see you again.
Definitely just being sensible!! Thanks so much xxx
🙂 may your day be blessed.
Fantastic, automated savings are a brilliant idea and I am so glad it is working for you. I’m not sure if you are renting or paying a mortgage, but if getting close to the end of a mortgage one thing you can do is to transfer all of the dosh that went into the mortgage into a retirement fund. I did some calculations the other night so I could see how quickly this would add up with compounding interest at the average rate of return on my fund, and I was so surprised and encouraged at how it mounted up over a ten year period.
Like you I am older (50s) and didn’t start early enough due to the challenging combination of self-employment and single parenthood. I think so many of us can fall into the trap of thinking we ‘deserve’ some sort of a treat (takeaway food,holiday etc) as we are working so hard etc…But for many years now I have said to myself ‘I deserve to be able to sleep peacefully at night knowing I am debt-free and have emergency savings’. It really is the best feeling 🙂
Madeleine
Totally agree with you, having something tucked away incase of an emergency helps me sleep better. Unfortunately I’m renting so that is another extra expense during retirement xxx
I wonder could you buy a little flat in a cheaper area you might like to retire to? You could rent it out and that would help pay off the mortgage. Some friends have moved up north and it has saved them a lot.
Madeleine.x
Your are doing so well. Well done you.
Thanks so much xxx 🙂
Having savings (and your own money as a woman married, single or otherwise) is incredibly important to our independence and our mental wellbeing. We always think we’re financially ok until something happens and you can have the best-paying job in the world and lose it all tomorrow. Knowing there is a nest egg stashed away just in case takes the edge off things. They used to recommend the equivalent of 3 months wages but I think it’s risen to 6 given the unsturdy nature of industry these days. Putting away spare cash when you can, can also help you break the desire to spend. Saving – seeing the numbers roll up gives me much more of a buzz than going shopping for a new pair of shoes and once you’ve squashed your shopping bug, there’s all that extra money to save. I am self employed so some of these schemes aren’t open to me. I save with Marcus Bank and the Governments Help to Save scheme and have some of the current accounts that offer interest on a steady balance but I manage my own accounts and switch money around manually using a lot of spreadsheets. It’s a weird thing I enjoy doing but the outcome is much the same. Savings!
Very interested to hear about your savings plan. This is timely reading for me as my children are grown up and going to university or looking for work so financial changes are afoot! Looking forward to seeing the rest of your blog posts. Thanks.
Not heard of these before but they sound like the type of thing I would be interested in, if not desperately in need of! Thank you for sharing, I will go investigate some more.
You are most welcome Grant! xx
Oooh both sound good! Having my savings account with my bank means it is all too easy to dip into it – so I will look at both of these!
I have also a savings account attached to my Natwest account but it only holds a few hundred £’s as its always getting dipped in to!!! PLUM doesn’t immediately transfer so there is a few days wait and Transave Credit Union is the same, infact I have to request a withdrawal form, fill it in and send it back to withdraw any of my savings so I feel that helps keep it where it should be xxx
So nice that you are back Carolyn and doing so well. You are an inspiration.
Pay yourself first. We must have heard this bit of savings advice a million times from our parents. Of course for the first 20 years of our working life we did not do this at all. Finally got our act together to pay off debt and start saving.
When you put the allotted money into savings first thing (whether through automatic savings or do it yourself) you just end up with a lower net income and learn to cut your coat according to your cloth. Auto savings is the best because you don”t have to think about it at all.
Our favourite financial adviser (Gail vaz Oxlade) who we followed came up with a percentage chart to help anyone figure out how much you should be spending in every category taken from your net income. This was the most helpful thing for us as it clearly told us that we could not afford that car or that house and would have to wait a year for a vacation. And it showed us how and where to cut. We did not need as much for transportation so could use this elsewhere.
housing 35% Transportation 15% savings 10% debt 15% Life (everything else) 25%
If you have a $3000 net income it breaks down to $1050 for housing, $450 for transportation, $300 for savings, $450 for debt and $750 for life
Of course if you have no debt or when you have paid it off you can add that 15% into savings or life etc. We added to savings and my husband actually got a shock when he looked at the balance of our savings after two years. Asked me if I had robbed a bank.
What an interesting comment Maureen, I did enjoy reading it! With hindsight I wish so much I could go back 20 years and do what I am doing now by putting money away but I guess then we had young children and spent more!! Just one income comes into my house of about £1750 or so after taxes have been taken off etc. I never get to see that amount of money as religiously every month I save £600 into savings and £100 into my Christmas Club savings and a small share loan also goes out for the shares I bought in my company so my take home pay after automated savings is about £960 per month! I also get a bit of rent contribution from my son as my rent is £475 per month. It’s hard work being so frugal but for me its the only way to actually save. It’s worth it xxxx
You are doing great and can see and plan where your money is going. Many people do not pay attention to their money or even devote as much time to looking after it as they do for less important things (us included for so long) but when you think about it we work so hard for our money and it really is a vital part of our domestic life. It determines where we are and where we are going.
We were very flippant with our money for more than 20 years – did a lot of foolish financial things but have to admit we had a very good time as well. And yes, when you are young with a family there are so many expenses for the present and also trying to save for their future.
But it is never too late to start saving. I have always had a money partner but he did go back to school and that meant I was the sole earner for a long time. But his change in career made him so much happier even though it took a decade to even get close to what he was earning before.
It is hard to be frugal to play catch-up but after a while it does get easier and your way of life. One thing to remember – you must find some time and money to please yourself. We always assigned “allowances” to everyone which was money to do with as they pleased. Sometimes it was just $5 a week because of expenses and income but it is amazing how you can find entertainment for little or nothing if you look and are willing to try new things. Walking was our big thing along with picnics.
Congratulations on your success and looking forward to reading more about how you are doing.