Our weekly series How I Save looks at the reality of how people spend and save their money.
Each week we ask someone to track their spending and tell us about their budgeting tactics, then get an expert to provide advice on how they (and we) can save better.
This time around we’re chatting with Alexa*, 27, a recruitment consultant living in Sheffield.
How Alexa saves:
I earn £20k a year without commission – which, let’s face it, is a distant memory in the current pandemic. In my savings account right now I have £3,500.
I’ve saved this much money by transferring as much of my commission and money as I can on payday and doing side hustles such as Ebay etc. The main way I save is transferring money as soon as I get it. It means living like a pauper some months but I know it’s there as a back up if I need it.
I’m saving for my wedding! Hopefully I’ll get down the aisle this year, pandemic dependent.
I struggle with saving because I emotionally buy things. If I’m sad or stressed I shop. I also struggle with distinguishing between a want and a need!
Lockdown has affected my spending and saving because I spent two months on furlough and all commission payments have stopped. I could earn between £300 and £1,500 a month commission which has now gone to zero with my outgoings remaining the same. I’m trying to not waste money as I desperately need to save.
How Alexa spends:
Monthly expenses:
- Car: £50 for insurance, Green Flag
- House: £430 for my half of the mortgage, water, gas, electric
- Entertainment: £30 for my half of internet, Netflix, spotify)
- Credit Card: £100 (minimum is like £17 but I try and pay £100 every month to get it down faster)
- Part-time job expenses: £20. I have a blog I create content and do social media work, I have expenses of £20 a month covering schedulers and a Microsoft office package.
A week of spending:
Monday: £27 on Ebay postage. Managed to sell a whopping 14 items I’ve decluttered, I charged delivery so while this is an expense I’ve had the income to cover it.
Total spent on Monday: £27
Tuesday: I spend £10 on a birthday present – It’s my mum’s birthday coming up so this was a little present I saw that I thought she’d like.
Total spent on Tuesday: £10
Wednesday: £12 on a takeaway – We decided to have a takeaway to celebrate the football returning and the early 6pm kick-off, picked a local one because it’s cheaper than a bigger brand.
Total spent on Wednesday: £12
Thursday: Our delightful cat decided to throw up on the bath mat in the night. Wonderful. Just because cats have a habit of returning to the scene of the crime, I binned it and bought a new one from Ebay for £8.49.
I spent £8.74 on birthday decor for my mum’s 50th. We’re obviously still in lockdown so not having a party or anything. I’ve got a few bits of balloons and banners to still make it feel like her birthday and celebrate.
Total spent on Thursday: £17.23
Friday: £3 goes on Joe and Sephs popcorn via Vodafone VeryMe – I’m a sucker for a deal and this seemed like quite a good one, we like the popcorn anyway and three pouches for £3 seemed good value when they’re normally around £3 each – perfect for our indoor movie dates.
I decided to get the feline a worming tablet for £3.95. Vets aren’t taking any appointments yet and after his little accident it’s better to be safe than sorry
£65 goes on a food shop – we haven’t been food shopping for three weeks, trying more to eat what we have in to reduce spending so this was a big one, this should last us two weeks minimum but ideally three weeks with little top-ups of milk and bread.
Total spent on Friday: £71.95
Saturday: I bought a bird box and seed that will stick to my patio window from Amazon for £13. It looks super cute and I can’t wait to welcome wildlife into my garden.
Total spent on Saturday: £13
Sunday: £16 on a BBQ set. We’ve ummed and ahhed for a few weeks in lockdown about getting a BBQ, I saw this one which is a round kettle bbq, utensils, cover and charcoal for £32 at TJ Hughes, which I thought was a brilliant deal and well under the £50 we were looking at for just a BBQ. We split the cost of house purchases, so £16 out of my account.
Total spent on Sunday:
Total spent this week: £167.18
How Alexa could save:
We spoke to the experts over at Plum, the smart app for managing your money to find out how Alexa can save better (and what we can learn from her spending).
Here’s what they said:
Hi Alexa, thanks for sharing your week with us! Coronavirus has meant a lot of tightening of belts, so let’s dive right in and see if there’s any way we can help you stretch your money that little bit further.
Spending
From Ebay side hustles to making that food shop last, you definitely know how to be savvy with your money.
You’re also clearly familiar with shopping around for a good deal, which is great. Finding great offers on products can really help to save those pennies; although a good mantra to keep mind is that it’s only a bargain if it’s something you really need in your life!
On the subject of needs versus wants – let’s talk about your impulse buying. You mentioned you often impulse shop when sad or stressed, and while we totally get the need for a bit of retail therapy here and there, to really ramp up the saving you’re going to need to rein in these splurges.
Try imposing a 48-hour rule to prevent impulse buys. If you see something you like, leave it in your basket for 48 hours before committing to the purchase. You may find that given some time your item isn’t quite the ‘must-have’ you originally thought it was.
Given your income has been dramatically reduced during lockdown, it’s also super important to maximise your money and make sure nothing’s going to waste. It’s worth shopping around to see if you can get a better deal on your bills.
Meanwhile, if paying off your credit card is a top priority, check if you can transfer your balance to a card with a lower interest rate. Plum will do this automatically for you, scanning your spending to see if you can save money on bills or credit card debt.
Saving
Congratulations to you and your fiancé! Weddings are a joyous occasion, though one which can also come with a hefty price tag.
You’ve already managed to stash £3,500 away in your savings, but we assume you’ll want a little bit more in order to have that dream wedding experience. Hopefully you and your partner will have already discussed how much you both want to spend on your special day. If not, that’s an absolute must. Having a savings goal to aim for will help keep you motivated and eager to put more cash aside.
Creating a ‘Wedding’ pocket within the Plum app would allow you to track how close you are to hitting your savings target, pushing you to smash your savings goals in record time.
Finally, you might want to think about saving beyond the end of the aisle. As your current situation shows, you never know when you might find yourself suddenly out of pocket, so having some money set aside to cover any unexpected blows to your finances is a must. Creating an emergency fund and investing some of your money for the future would help you safeguard your finances and prepare for the unexpected. Although bear in mind that your capital is at risk if you choose to invest.
Alternatively, let Plum do all the work for you! Plum uses AI intelligence to stash away only what you can afford to save, and can split your money automatically between savings Pockets and investment options. So you can kick back and enjoy that summer BBQ while your savings grow.
*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 alerts on deals and discounts, join our Facebook Group, Money Pot.
MORE: How I Save: The journalist saving money in lockdown by not going to the pub
