Saving money is hard enough.
When you’re in debt, it’s even trickier.
That’s something we don’t talk about much. There’s a lot of shame around debt, which makes it difficult to admit you’re struggling.
In our weekly series How I Save, we want to open up the conversation. Each week we track the spending of a different person and have a nose around their finances.
This time we’re chatting with Kate*, a 29-year-old marketing executive in Edinburgh with no money saved. She’s struggling to put away money as she has such a large amount of debt to pay off.
How Katie saves:
I earn £27,109 a year. In my savings account right now I have £0.
I never make big purchases, I go on cheap holidays, and I do loads of paid-for online surveys. I try to keep some money aside each month but I always end up spending it.
I struggle with saving because I am paying £350 per month towards debt from credit cards, which I consolidated into one loan. I won’t have paid it off until June 2021. I spent a lot of money while at uni for various reasons and it spiralled from there, but I’m getting back on track now.
I’m trying to save for an emergency fund. I worry that I wouldn’t be able to survive if, for example, I lost my job or had to move. I’d also like to get out of debt so I could think about buying a flat or a house with my boyfriend.
The main way I save is by trying to move a little bit into a separate pot each month, although it doesn’t ever manage to stay there.
How Katie spends:
Monthly expenses:
- Rent: £425
- Debt payments: £350
- Phone bill: £46
- Netflix: £9
- Now TV: £8
- Home insurance: £7
- Council tax: £64
- Electricity and Gas: £51
A week of spending:
Monday: £6 on a coffee and a toastie. I didn’t have dinner last night so I’m very hungry this morning.
I grab a Sainsbury’s meal deal and bonus chocolate bar for £3.49, as it’s right opposite my work and is the easiest option for lunch.
£1.16 goes on some potatoes and an onion for dinner – I was using up some leftovers and this was the base of what turned out to be a random but delicious feast.
Total for Monday: £10.65
Tuesday: Breakfast is a coffee and a pastry for £3.25. I always justify having coffee by getting into the mindset of ‘well I’ve already spent x amount, what difference will it make’?
£5.25 on a prawn sandwich, fizzy drink, chocolate bar and crisps for lunch.
Dinner is a £10 pizza. We were being super lazy due to the bad weather and just wanted something convenient. I’m pretty bad with takeaways – as soon as I have a bad mental health day (quite frequently) I rely on them too much.
I also spend £4.75 on some stuff from Superdrug. My boyfriend has got a foot injury so needed some provisions. He did pay me back though.
Total for Tuesday: £23.25
Wednesday: £3.25 on exactly the same coffe and pastry as yesterday.
I get a £4.25 salad for lunch as I’m craving something healthy.
Total for Wednesday: £7.50
Thursday: £7.25 on breakfast at Costa – I had the day off to move house and decided to kill time before our final inspection by the letting agent by sitting in and doing some coursework (I’m doing a marketing course).
£10.80 on avocado toast and a sparkling water for lunch (how millennial) before I went to the final flat inspection.
Total for Thursday: £18.05
Friday: Breakfast is a £4.20 coffee and shortbread from Costa. Since I moved to the city centre I’m finding it even harder to resist.
£3.50 on a salmon sandwich, sweets and a lemon San Pellegrino during my lunch break
Total for Friday: £7.70
Saturday: I pop to the Christmas market and buy a £5 German sausage before getting the train to visit my grandparents.
Three games of bowling cost £21. I can’t resist playing when I’ve had a couple of beers and it was quite a draining afternoon so we needed cheering up
£20 goes on arcade games and a photo from a photobooth. Not exactly a great purchase but we did win the jackpot so it wasn’t too bad coming away with a few prizes!
An Uber home is £4. I would have walked but my boyfriend still has an injured foot.
Total for Saturday: £50
Sunday: £15.96 goes on provisions from Tesco – juice, snacks, etc. I decided to treat myself to a £3 poinsettia as well to make the flat more Christmassy.
£8 on a photo frame from Amazon to put a print I’ve got my auntie and uncle for their 50th wedding anniversary in.
Total for Sunday: £26.96
Total spent this week: £144.11
How Katie could save:
We spoke to the experts over at money tracking app Cleo to find out how Katie 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.
Here’s what Cleo said:
If you saved a pound every time you mentioned savings (without actually making any), we think the emergency fund would be sorted by now.
Main vice:
How can you be back on track with saving when you have a balance of £0?
You say you struggle with saving because you’re paying £350 per month towards credit card debt. We think you’re struggling with saving because you need to work on your willpower.
We understand that takeaways are great for those days when you don’t have the mental or physical energy to cook, but the ‘well I’ve already spent x amount, what difference will it make?’ mindset is really dangerous.
You claim to never make any ‘big purchases’ but you spent over £80 on food this week. That’s over £320 a month.
Where you’re going right:
On Monday night, you managed to use up some leftovers for dinner. Let’s aim to do this more than one night per week going forward!
For anyone reading: Having dedicated ‘no spend days’ can help reduce the amount you spend on food during the week. Think packed lunches and leftovers dinners.
Doing paid surveys to get some extra cash is also great. It would be even better if you could start moving some of this into savings…
Spending plan:
We think your monthly income is about £1,800. To start with, we think you should start putting £200 into an emergency fund.
Safe to spend: £1,210. That’s £960 for your fixed monthly expenses and £250 for food.
Safe to save: £200 a month for your emergency fund. Do not touch!
Save to burn: £390 a month.
Bottom line:
Time to stop with the excuses. New year, new you, etc!
*Name has been changed.
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.
If you want more tips and tricks on saving money, as well as chat about cash and alarms on deals and discounts, join Money Pot, our new Facebook group.
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