Tuesday, January 20, 2015

Saving Money - A Tale of Self Control and Going the Extra Mile

If you pay any attention to my ramblings on Twitter, you may well know that I'm going to Japan this year. This has been planned for quite a while, and it will require a fairly large lump of money if I'm not to be in debt for the next few hundred years (well...more in debt for the next few hundred years, I went to university after all). So the plan is simple: we kill the spending.

Okay, so flat out "killing" spending doesn't quite work. Spending money to buy random crap you don't need is like a drug addiction; you just need to manage it better and trick/force yourself into no longer caring about the item. Alternatively, find ways to spend as little as possible while still getting the thing you want, or a cheaper equivalent. This is a blog post about some of the ideas I've used to save money.

1) What are you saving money for?

This is super clever, and suggested by my good friend Mhairi last year: Put reminders of what you're saving money for EVERYWHERE! Keep it in your mind at all times by putting reminders on your wall, in your car, on your computer, on your phone, on the toilet, etc. This way, you'll be less inclined to spend stuff because you've got what you're saving for in your mind at all times.

2) Keep track of everything you spend

This used to be a super pain, especially with banks starting to cause payments to be days late appearing in your account meaning you go overdrawn (true story). You could keep everything in an Excel spreadsheet or, if you're keen, a database like Access or MySQL. However, there's something way more appropriate to today: an app. There are apps out there that are really quick to add payments to, both immediate and scheduled. I don't use my bank app any more except when transferring money from my current account to my savings account. I manage my balance by using an app called "Finance Tracker". This is very useful as you can create categories to allow very quick assigning of payments, also allowing you to make reports on what you've been spending money on the most and give you ideas on how to spend money on those things less. It also has the option for multiple accounts. I use this as one for bank account, one for cash, but the latter is tricky to keep track of since cash can go all over the place and quickly sometimes. However, it has allowed me to not go overdrawn on a few occasions and I'm really pleased I have it.

One thing to bear in mind is that applications like this that can give you your approximate balance need you to keep putting in monthly/weekly/whatever outgoings every month up to pay day. I typically do this once I can see my salary in my bank account. I then spend 10 minutes setting up all my known outgoings for the month.

3) Set yourself some restrictions and guidelines, but give yourself the opportunity to bypass it

Restrictions on spending. Sounds scary, but it doesn't have to be. It's difficult to go into generic examples for everyone, so let me talk about my own.

One of the most influential ideas I've had (as in influential on my spending) was the idea that I was not to spend over £20 on anything other than the necessities (so fuel, rent, etc) UNLESS I watch this 1 hour 17 minute video of some friends of mine in Japan having a great time. If, by the time the video is over, I still want the item in question, then I buy it. The idea here is that, by watching the video, it reminds myself of what I could be missing if I don't save up enough. Additionally, it adds a layer of breakage where there's a period of 1 hour and 17 minutes between "I want this" and actually buying it. Quite often, I get to about 5 minutes in and go "you know what, I'll wait until after Japan".

Try to contain your social life. If you've got friends who often want to go to the pub/out to eat, let them know that you're saving up so can't do that too often. Have fewer nights out, or tone them down a bit (maybe have food at home, then go see friends in the pub for example). This is a lot easier for me due to me not having any alcohol whatsoever (you can get some good deals when you're the designated driver by the way) but I used to spend the equivalent on food instead, so that's something.

4) Find cheaper ways of doing/buying stuff. They are out there.

So here's an example of how I'm saving a fair bit of money while still being able to do the things I love, like travelling on trains.

Over the next month, Northern Rail have an offer where you collect 2 tokens from newspapers, print out a form and you can buy a day ticket valid on all Northern Rail services for £10, or £17.50 for a weekend ticket. Most notably, I was planning a trip to Garsdale to visit the friends I'm going to Japan with. To drive, the petrol alone would be in the region of £35, about the same as the train price (only it's quicker to drive). However, by getting 4 newspapers delivered (at £1.06 each, coming from Leeds because none of the newspapers in the campaign are on sale in Crewe) and, thus, 2 day tickets, it works out cheaper than the standard return ticket, and I've got a bit more flexibility than just going straight there. Getting the weekend ticket would allow us to travel somewhere on the Saturday too, and it's still cheaper than the petrol! Not by much, but every pound counts. Previously, I've travelled all the way to Newcastle-upon-Tyne on one of these tickets, then back the next day, so it's a cheap way of getting my train travel fill while spending less than usual.

Loyalty cards, if you don't mind the shops tying your purchases to you for marketing, etc, can be useful for saving money on some purchases. Points are a pain, so I use the Co-Op card to get some money back each year instead.

UPDATE: Your phone probably has a calculator. Use it when doing the shopping. For example, I drink 2 cans of either Pepsi Max or Diet Coke every weekday. This means I will often buy the cans in bulk. However, larger containers are not always better, depending on offers. This is gonna sound crazy, but when at the supermarket I break out my phone and calculate the cost PER CAN. £7 for a box of 24, or two boxes of 12 for £5. You go for the latter, saved yourself £2 there. Sometimes it's less obvious, but you get the idea. Sometimes, the saving is like 1 or 2p per can, but it all adds up!

5) Do odd jobs?

As a side business, I do mystery shopping for certain companies. It doesn't pay much, but it often results in a subsidized/free meal if you go for the restaurant/pub jobs. Just remember that you need to sign up as a company and do a tax return each year. I've got that to look forward to. Fun.

6) Don't stop believing

You can do it, I believe in you.

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