Welcome back to How I Save, our weekly series exploring how people spend and save their hard-earned money.
This week, we’ve got a special edition.
For the first time ever, we’ve brought a previous How I Save-r back for another check of her personal finance situation.
Back in May 2019, Poppy* had £12 saved and was in quite a bit of debt.
Nearly two years on, we asked the 26-year-old SEO specialist from London to share her spending habits with us once again – and tell us if she actually took on any of the expert advice.
How Poppy saves:
I earn £32k a year and in my savings account right now I have £671.
I’ve saved this much money by using the Chip savings app. I put it on a high setting so it saves roughly £25 a week automatically.
I was saving up spending money for a holiday, which will now probably be cancelled, but I’ll probably put that cash towards another when we’re allowed.
I think because I grew up with not much money and ended up getting into debt in my teens and early twenties, I’m always worried about ending up with nothing at the end of the month. It’s a real feast or famine situation with me.
I pretty much need saving automatically done for me as I struggle to save more than putting coins in a jar.
I used to be in a lot of debt, but got myself out of it after going to the ombudsman about the lender (they’d offered me unaffordable loans, so I was repaid all the interest I’d paid them and cleared my debt).
I have a few hundred pounds on a credit card now, but I pay it off monthly and only use it for bigger purchases I want to break up.
Last time I did How I Save most of my money was going to debt repayments, and I was stuck in a cycle of paying back only to borrow again. I don’t think I’m more financially competent as such, but getting the money back from the loan company has cut off that cycle.
That debt really weighed on my mind for a long time, so being able to save even small amounts and have some disposable income is massive.
Doing How I Save definitely highlighted that my situation wasn’t right, and I’d say propelled me on to doing something about it.
I also realised just how much I spent on coffee, which was quite embarrassing.
The idea of going to the ombudsman – even though I felt like I’d been treated unfairly – was scary and long-winded, but I knew I had to get out of that debt hole and it was a lifesaver.
My overall situation changed, so a lot of what the experts said didn’t fit anymore. However, I’ve spent basically nothing on coffee for about a year now (albeit because of the pandemic) so I’m counting that as a win.
I’m saving a lot more in lockdown now that I’m not paying for travel, but spending a lot on food and impulse buys so I can get the hit of a package hitting the doorstep.
How much money could you save by giving up takeaway coffee?
How Poppy spends:
- Rent and most bills: £815
- Travel: Currently nothing
- Phone insurance: £5.89
- Work techscheme: £85 (but this comes off my gross salary)
- Transcribing app: £7.36
- Spotify Premium: £9.99
- Amazon Prime: £7.99
- Premium bank account (which I need to cancel but have to go into a branch to do so): £10
- Phone contract: £39
- Credit card: £50
- Disney Plus: £5.99
A week of spending:
Monday: Transferred my friend £60 for our other friend’s hen do in September. This is the deposit on the stay, and I’ll pay the other £60 closer to the time.
Our online order for groceries also came today, and the money came out of my account – £73.89. My partner and I take turns on who gets each food shop.
I also spent £4.99 on virtual diamonds for a game on my phone, which I appear to have become addicted to. It’s my day off and all I have right now is the pleasing feeling of matching gems and going up levels.
Total spent on Monday: £138.88
Tuesday: Realised we’d run out of cigarettes so decided to get an order on Chop Chop (like UberEats but for Sainsbury’s) as we moved recently and aren’t close to a shop. Delivery is normally £5 but if you spend £40 it’s halved. So, naturally, I spent £44.19 including delivery, getting cigs and extra bits we forgot to get for dinners and lunches.
Also spent another £8.97 on those bloody diamonds. Please don’t judge me, I haven’t had a drink for over a month so this is my only vice, and I’m not feeling well so spending a lot of time feeling sorry for myself.
Total spent on Tuesday: £53.16
Wednesday: Still feeling bad mentally – which often gives me a dodgy tummy and a super nauseous feeling – so basically lay in bed all day. Nothing spent.
Total spent on Wednesday: £0
Thursday: Much the same again today, although I did spend £42.35 on a Lina Stores box to be delivered for Valentine’s Day.
We wouldn’t normally spend so much on food to eat in the house, but it’s been a long time since we had a meal out and we need something to look forward to.
Total spent on Thursday: £42.35
Friday: I’m signed up to a weekly lottery called Daymade, which comes out today (£3).
Trying to get out of my funk, I decided to take a long walk, and nipped into Waitrose for some fruit, veg, and snacks. Spent £22.41.
Another £4.99 on diamonds that don’t even exist. I have a problem.
Total spent on Friday: £30.40
Saturday: Nipped to the Post Office on my lunch break to send an exchanged Christmas present (it was broken) to my brother in Scotland. £2.39.
Chip took £15.33 this week, obviously lowering my savings amount because I’ve been spending bucks on in-game currency and can’t afford to put away any more.
Total spent on Saturday: £2.39
Sunday: Texted my dealer to get some weed to help me chill out on my weekend. Took £70 in cash out, but my boyfriend had transferred that to me as a treat so it didn’t cost me anything.
I did spend £28.79 in Londis on cigarettes and snacks on my way to the cash point, though.
Also paid £9.15 for my antidepressant medication prescription on Echo.
Total spent on Sunday: £37.94
Total spent this week: £305.12
How Poppy could save:
We spoke to the experts over at Plum, the smart app for managing your money, to find out how Poppy 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 Poppy, thanks for jumping back on the How I Save train!
We’re glad to hear you’ve cut back on your coffee spend (RIP to those iced lattes) and, more importantly, cleared your debt.
From the sounds of things, this has been a drain on your financial (and mental) wellbeing for quite a while, so you should feel really proud of breaking the cycle and tackling it head-on. Kudos to you!
Now the fact that you’re back for more advice just shows how dedicated you are to improving your financial situation. Let’s dive in and see if there are any ways we can continue maximising your savings…
Poppy, you’ve made a good start with £671 in the bank, but you’re still some way off having a comfortable amount stashed away.
You mentioned that you still worry about ending up with nothing at the end of the month, so one suggestion could be to create an emergency fund. Putting your £671 into an easy-access interest account, away from your regular spending, would be a great way to kick this off.
While talk of emergencies is a little dreary, having this safety net is super important. Not only will it prevent you falling into any debt, but it will also give you some added peace of mind. We all need the zen that comes with knowing we can cover any challenges life throws our way.
Financial experts usually recommend building up this cash stash to cover at least three months worth of your living expenses. To help you reach this savings goal at lightning speed, you could take part in automated savings challenges in money management apps like Plum.
By activating Rainy Days, Plum sets aside extra cash automatically every time it rains. If you’re looking for something a little more hardcore though, you could try the 52 Week Challenge. You save £1 in the first week, £2 in the second week and so on, until you save £52 in the last week of the year. With a little competitive spirit, Poppy, we’re sure you’ll be crushing those savings goals in no time!
We totally understand that it was your week to pay for groceries, Poppy, and that Valentine’s day comes around once a year, but, as you said yourself, you are spending a lot on food and impulse buys.
One way you could look at cutting back is by making a meal plan at the start of each week. That way you can order everything you need online and curb those cheeky last-minute deliveries and grocery runs.
Another tip is to avoid shopping when you’re hungry. We suspect that you might have worked up a bit of an appetite during your Friday walk, which explains the £22.41 spend on fruit, veg and snacks. We’ve all been there before…
It might also be an idea to look into cashback services to make your purchases go the extra mile. Plum does this automatically if you shop with one of our partner retailers through the app. Once you’ve completed your purchase, your rewards will be deposited into a special cashback pocket within your account.
Finally, we all deserve a pick-me-up every once in a while for enduring that lockdown life, but creating a budget for those ‘treat-yo self’ purchases could help keep the impulse buys in check. You could give yourself a monthly allowance for your cigarettes, lottery tickets (and those pesky diamonds) so you and your bank account are both happy.
*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].
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