How I Save is a weekly series that aims to take an honest look at how people spend and save their money – and why it can be so difficult to put away cash for the future.
Each week a different person tracks their spending for a week, noting down exactly what they spent and what they bought, and then we get them some expert advice for how they can save better (which, handily, we can all learn from too).
Money is still a taboo topic, despite it being something we all have to deal with.
Our collective discomfort around chatting about money means we’re not equipped with the financial knowhow to make the most of what we earn, and many struggle to ask for help when they need it.
We’re hoping that by sharing how people actually spend and save, we’ll open up that conversation.
Last week we spoke to a 30-year-old product development manager with £34,500 saved. That’s quite the contrast with this week’s saver; Hayley (not her real name), a 23-year-old editorial assistant living in London and earning £19.5k.
How Hayley saves:
I earn £19,500 a year and in my savings account right now I have £700.
I’ve just booked a weekend away over the summer which came out my savings, it cost £150. A girl needs a holiday…!
I don’t really know what I’m saving for specifically to be honest, but I want to have more of a safety net than I currently do. I’m also bearing in mind that I might want a car at some point or a house further down the line (although this seems impossible).
I’ve been considering getting a Help to Buy ISA to help me save more and give me more of a goal to work towards.
The main way I save is putting money in my account as and when I can, which isn’t very frequently, and I’d like to have a regular plan to help build it up.
I struggle with saving because I’m a bit of a spender, or I used to be. I blew through all my savings at uni and now I’ve moved out of home and into a rented flat it has hit me hard. I’m trying to cut down on unnecessary spending as much as I can, but I end up in my overdraft every month… Oops.
I left uni last summer with practically no money, and went straight into an extremely low paying internship. This covered my travel and allowed me to start paying back my savings in small installments.
Then I got my full-time job in September, and moved out of home in October. After paying for my deposit and first month’s rent in one go I’m now effectively £600 behind in my current account and I can’t seem to escape the dreaded overdraft.
I was £950 in my overdraft at the end of December, but last month I was ‘only’ -£750. This month I’m on track to be -£650.
I’m slowly clawing my way back, but it’s been slow going as I had some issues with tax etc that slowed me down.
I got a tax refund that went straight into my savings as I thought it would be a good idea to build my savings account up, but now I’m regretting that and am starting to think I should have kept it in my current account.
Overall, I feel like my finances are a mess, and I’m trying to pay back both my savings and my overdraft in a really haphazard manner.
How Hayley spends:
Monthly expenses:
- £600 rent for a house-share
- £100-£130 travel – my actual commute should be £92 a month, but I always seem to end up spending more like £140 due to trips on weekends, or going home for a visit etc
- £10 phone bill
- £17.99 gym membership
- £5.99 Netflix
- £7.99 Amazon Prime
A week of spending:
Monday: Stopped by Sainsbury’s on my way to work, got myself some breakfast and a pint of milk. £2.10 in total.
I topped up my Oyster card with £40 last Friday so I don’t need to worry about travel this week. I prep lunch every day and did a food shop on Sunday, so I’m good for food as well.
Was feeling a bit rubbish at work so treated myself to a rare early week Costa, £2.80.
Tuesday: Took out £10 cash. I try to use cash instead of paying for little purchases with my card as I feel like I have a better sense of how much I’m spending when I use cash. Paid £1.10 for a sausage roll at lunch with said cash, (I know I said I bring lunches to work, but I was super hungry)!
Wednesday: £1.55 in Co-Op – didn’t realise the self checkout was card only so couldn’t use my cash.
£4.30 in Costa. Normally I’d leave this until Friday to treat myself, but I felt super exhausted and was just having one of those days. Paid with my cash.
Thursday: I didn’t spend anything.
Friday: Had no food prepped for lunch so brought a baguette and doughnut from the bakery, £3.75 .
Went to Asda for birthday card, baking supplies and a bottle of wine. Got a couple of extra bits for the house as well, came to £24.97. This is on top of my weekly shop, and not something I’d normally spend each week.
Saturday: Decided to go home for the weekend, but parents covered the trains so no money spent apart from a few quid on the tubes on my Oyster card.
Sunday: Went and did my weekly food shop at Asda. Spent £28, and it should last me until at least next Sunday.
How Hayley can save better:
We spoke to the experts over at money tracking app Cleo to find out how Hayley can save better (and what we can learn from her spending).
Note: the advice featured is specific to one individual and doesn’t constitute financial advice, especially for a London budget.
Hard truth time: you don’t have £700 in savings. You have £50.
But luckily with this logic, you also aren’t in your overdraft.
Bite the bullet and move your savings in to clear your overdraft. Like, now. Feel stress instantly dissipate.
Every single time you use your card, you can’t win because you’re spending in your overdraft. That can’t feel great. Set that back to zero and you can also immediately stop doing weird backward negative maths to track your money.
Where you’re going wrong:
So you only have £50. Say it with me: fifty pounds.
The good news is you’re gloriously underspending.
You’re so under budget that at this rate you’ll finish the month with + £276.15.
In two months you could have + £502.30.
I can’t even slightly roast your spending. You spent a minimal £83.70 this week. Yeah you had two luxe coffees, but as you’re at the start of your career, if that £4.60 Starbucks helps you smash a deadline then it’s ultimately worth it.
To increase how much you can save, you need to basically focus on up-skilling yourself and earning more.
Spending plan
This is after bills, travel and subscriptions.
Safe to Spend: £340 Monthly /£80 weekly / £11.50 daily
This is excluding work commute & groceries, so you’ve got a fair bit of fun money to work with. Scrimp during the week and your weekend travels are easily covered
Safe to Sit on: £50 Monthly
Not sure you’ve factored in all those fun things like council tax, water bills and that-awkward-month-you-mysteriously-pay-four-times-your-normal-amount-for-energy. Try to leave an extra £50 in your main account for not-fun surprises. If you don’t have to use it, this builds into a rental deposit.
Safe to Save: £200 monthly
Shove half into a long term ISA, and the other half into a fun fund. Increase this with every pay rise.
Endgame
There’s no training on how to deal with your first full salary. There should be. You’re on track and you’ll just get stronger, Hayley.
For real though, stop frolicking in your overdraft.
How I Save is a weekly series about how people spend and save, out every Thursday. If you’d like to anonymously share how you spend and save – and get some expert advice on how to sort out your finances – get in touch by emailing ellen.scott@metro.co.uk.
MORE: How I Save: The 40-year-old business consultant in Croydon with £143,000 saved
MORE: How I Save: The 32-year-old freelancer earning £15k a year with £1,400 saved
MORE: How I Save: The 21-year-old marketing manager in Nottingham earning £22k with £4,500 saved
