Don’t eat. Don’t drink. Don’t go out. Don’t buy anything. Ever.
Sounds extreme, but it is broadly true – let’s examine it in more detail. The key point is probably to actually have a budget. It is dull and horrible, not to mention scary, to examine in detail where your money goes each month, but without setting yourself limits it is so easy to find yourself saving very little indeed. You will also not know what is realistic for you to save, so you won’t know how long it will take to achieve your goal. In a way I’ve found it really satisfying to put my money towards something I really want to do, rather than frittering it away, so it hasn’t been as hard as I thought it would be. I probably wouldn’t say that towards the end of the month though!
So assuming you don’t live at home, your biggest monthly outgoing is probably rent. Unless you have a mortgage, in which case I can not advise you (I assume you can get a buy to let mortgage and sublet, but that is very serious and hard work). So how to save on rent:
1) downsize – at its most extreme this means a bedsit, a bit difficult to stomach for some people but if you can put up with studenty cramped conditions it’s a mighty good saver
2) Renegotiate with Landlord – unlikely to reap benefits and only for the very ambitious to attempt
3) Try to ensure you comply with your tenancy agreement, so when you do leave you can guarantee the safe return of your deposit
4) Be very nice to your friends so you can try to give up your lease a bit earlier and stay with them for a little while
5) Consider moving home for a short while
Which of these, if any, that you choose will depend on how much of your comfort you are willing to forgo. It is pretty possible to save a lot without changing your rent payments, but personally we found it the easiest place to make a cut.
Second biggest expense, bills maybe? Not too much to be done here. One provider is similar to the next, and by changing you often pin yourself into a new contract. It also scores high on the hassle factor. I did manage to reduce my phone contract significantly though. My monthly contract was ending, so I changed to a SIM only provider, Giffgaff in my case, and for the same minutes and unlimited texts and internet, I now pay £10 instead of £40-ish a month. Plus there is no contract, so when I leave I’ll just stop paying.
If I’m honest though, as egg has insistently been telling me as I write, bills were not our second biggest expense, food was. Before the introduction of the ‘we’re packing in our lives to travel’ budget, we spent between £600 and £800 a month on food between us on food shopping and eating out. Now with some careful food planning and less eating out, we spend £200 a month between us. It’s a nice saving and we are eating healthier. Downsides in any given week, we eat 3/4 meals, and then have leftovers for lunches or dinners. It does get a bit samey.
Going out, as alluded to in an earlier post, is a bit harder to negotiate a good amount to cut back. Luckily and unluckily we are undertaking this saving exercise in London. Luckily because there are oodles of great things to be done for free. Unluckily because there are even more good things to do for lots of money. We have gone down the route of setting a budget for frivolous things for the month, and once it is gone that’s it. It is a good way of prioritising things you really want to do and people you really want to see. Plus, when the budget has run out, you become vey imaginative at free things you can do. Alcohol has been a victim of our budget. Apart from a couple of exceptions it has become nonexistent in my social life as it makes everything so much more expensive, and rounds of drinks at work are very awkward if you really can’t afford a round for 9 people.
Finally stuff. Just stuff. All those things you buy because you are there and so are they. The odd magazine, a new book, an outfit for a night out, camera film, records, shoes. We just don’t buy them now. Nothing. To the extent that the soles are coming off my shoes but I will continue to wear them until they fall apart completely (I also love them,…and have wet feet). The only exceptions have been things for travelling and birthday presents.
Different people will prioritise different areas of their life. Some things that I see as extras that can be cut back, the gym for example, are essential to others (crazy people). And it depends on how extravagant your life was to start off with; fortunately we have not had to take second jobs, but that is also an option if there is not space in your life to cutback. The extra time spent working will also mean less time for spending. Really, there are three golden rules:
1) make a budget
2) stick to it
3) keep sticking to it, even when you don’t want to
(and the secret fourth rule)
4) if the budget is making you really sad, ignore it for a few days, it won’t kill anyone
Listening to – the sound of cooking
Location – at the table looking out of the window, London