Welcome back to How I Save, our series exploring the reality of our relationship with money.
Each week we chat with a different person about their approach to saving money, then track their spending for a week.
Finally, we get them some expert advice on how they can save more.
This time we’re nosing around the finances of Violet*, a 26-year-old delivery driver and student living in Cardiff.
How Violet saves:
I earn £18,000 a year and in my savings account right now I have £700.
I’ve saved this much money by trying to reduce spending and putting money away from every pay check.
I’m saving to be able to travel for my dream trip around Thailand, Indonesia and China in the next few years.
The main way I save is putting money away every payday and trying to save any extra unexpected money.
I struggle with saving because I usually spend money on takeaways as I’m always tired from college and work.
Coronavirus has impacted my money in that I have increased my earnings due to the demand since lockdown started.
How Violet spends:
- Rent £200
- Car finance £85
- Car insurance £70
- Debt repayments £350 (will be debt-free by June)
- Council Tax £65
- Petrol £150 (gets reimbursed from work every week)
A week of spending:
Monday: I have five days off work as I had to use up my holidays by the end of the month. So, I pop to Asda to grab some groceries as I need some ingredients for dinner. I spend £4.30 in Asda.
I have lunch made at home and then cook dinner for my family with what groceries we have.
My stepdad and I decide to take the telescope up the mountain to stargaze as it’s one of our hobbies. We take our own tea and munchies up from what we have in the house so no money spent there.
Total spent on Monday: £4.30
Tuesday: College is remote from home today so I make my own lunch at home. Decide to treat my family to a Chinese tonight as we are all feeling a bit fed up so end up spending £37.50 for the five of us.
Total spent on Tuesday: £37.50
Wednesday: Go into college today and stop off at McDonald’s drive thru to grab a salted caramel latte on my way in. Spend £1.79. I go to McDonalds for my coffee as they are half the price of chains such as Costa or Starbucks and usually quicker if I go through the drive thru.
I decide to grab a jacket potato, cheese and beans from the canteen for my lunch break because I’m sick of taking in sandwiches every week, cost £3.50.
I go home and make myself homemade lasagne for dinner at home.
Total spent on Wednesday: £5.29
Thursday: It’s payday! A long day in college today so make sure I make myself some porridge before I leave. I swing by McDonald’s as it’s right outside my college for my salted caramel latte, spend £1.79.
Brought some snacks with me to eat on my 20-minute break between lessons and then I buy myself some chips and cheese from the canteen on lunch, spend £2.65.
After college I head to Asda to get some groceries to last me in the run-up until Christmas, this comes to £21.34, would have been less but I decided to treat myself to a jumper in the George sale rack for £5.
I head home and make tea for myself at home, and set aside around an hour to pay all my bills and transferring money to my savings. I got paid an extra £100 more than I thought I was going to get so transfer that over too.
Total spent on Thursday: £25.79
Friday: The urge not to go out and spend money because it was payday yesterday is unreal. I know that as it’s a week before Christmas and the new announcement of the looming lockdown ahead, everywhere will be manic with shoppers, which is why I’m glad I sorted my Christmas presents a month ago by starting to buy presents earlier in the year, to save myself being skint at Christmas.
I stay in and play some Playstation today before work to try to keep myself entertained and not to spend money out of boredom.
I head to work at 5pm and work until 10pm. I’m kind of tired after driving around all night so I take a free pizza home with me from work for my dinner. No spend day!
Total spent on Friday: £0
Saturday: Start work at 1pm today as it’s a Saturday. I spend £1.59 on a large bottle of Coke to drink while I’m out in delivery. I finish work at 9pm and because I’m tired from work all day, I decide to take home two pizzas for me and my boyfriend, spend £5.
Total spent on Saturday: £6.59
Sunday: In work from 12pm today. I take my own drink into work with me, and have some chicken and wedges for free on my break to keep me going. The good thing about working at a food place is the free food you get.
I finish at 8pm so head home. I make myself a ready meal with some chips at home because I already ate in work.
I do a bit of browsing on Amazon and come across a good deal on a Playstation game for a last-minute Christmas present, spend £13.45, I save 2 quid on delivery fee as I have free Amazon prime for six months being a student.
Total spent on Sunday: £13.45
Total spent this week: £92.92
How Violet could save:
We spoke to the experts over at Plum, the smart app for managing your money, to find out how Violet can put aside more (and what we can learn from her spending). Please note that tips from Plum do not constitute financial advice.
Here’s what they said:
Hey Violet, thanks for sharing your money diary with us this week. Let’s take a closer look at your spending and saving habits to see what’s going on…
You’re off to a great start – setting time aside to sort out all of your bills straight after you’ve been paid is a good habit to have and a fundamental of personal finance, we have to say.
When it comes to spending, the next step could be creating a simple budget to keep track of where your money goes. The 50/30/20 rule is a very straightforward way to get started with budgeting. According to this rule, you should allocate 50% of your income towards your needs (such as groceries, rent, car insurance etc), 30% towards your wants (shopping, eating out, hobbies) and save 20% of your income.
However, if tracking your spending doesn’t sound like a fun activity, then you could use a money management app like Plum that will allow you to see your spending by category and take action accordingly.
And having one no-spend day a week is a habit worth taking into 2021.
Becoming debt-free is a crucial step in many people’s financial journey. The fact that you’re on track to become debt-free by June means that your existing strategy is working for you. However, it might also be time to start thinking about longer-term saving strategies.
It’s important to mention that before saving up for the dream trip of your life, you should also think of creating a cushion in case of any life emergencies.
The precise amount of your emergency fund will depend on your own circumstances, but the widely accepted wisdom is that your emergency fund should cover your basic living costs for three to six months.
Since you have fluctuating income, automating the process of saving money can stop life getting in the way. Plum’s algorithm will automatically account for any fluctuations in your income and outgoings to calculate exactly the right amount to save for you, without leaving you short.
What’s more, you can control just how ‘enthusiastically’ Plum deposits for you. There are moods ranging from ‘Shy’ to ‘Beast Mode’. And even if you’re only on the ‘Shy’ mode, those pounds can add up quickly to a substantial amount.
By automating the parts of personal finance that you find the most difficult, you’ll reach those financial goals in no time!
*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 [email protected].
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.
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