Even though I’ve been working since my early 20s, I’ve never been a big saver.
My childhood programming led me to believe that one day, somehow, a substantial check from one of my amazing, brilliant ideas would materialise and solve all my years of financial negligence, so there was no need to save anything along the way. Twenty years down the line, and the check still hasn’t arrived.
I have some 25-30 years before hitting my retirement age. I feel that now is my last chance to make lifestyle changes that will keep me from ending up in a poorhouse. Along the way, I can also impact my life in a positive way: less consumer spending means less crap I don’t need, and that usually ends up in a landslide.
To introduce long-lasting change into my financial life, I needed to look critically at my spending. This self-imposed analysis helped me develop an action plan I could apply right away, without waiting for my finances to change dramatically.
- Find a job that pays more than my current one. An obvious solution, but to do so, I need to re-train, which I’m currently doing (I’m at the age where I need to have plan B). However, re-training takes time, which means that I need to put in the hours and the time and be patient while waiting for my re-training to pay off.
- Keep on finding creative ways to spend less and cultivate a frugal mindset. Even if I change careers or take the two-career path and my earnings rise, I’ll need to stop myself from overspending. If I keep on spending all I’m earning, or worse, more than I’m earning, the best plan won’t work.
- Sell out all the extra things I keep around the house (in my house and my parents’ house) that are of no use to me. (I recently went through piles of clothing. So much money was spent on clothes that were hardly used. What was I thinking?!?!)
- Any extra money and income are going to my investment account (currently, I’m with Vanguard)
- Keep building my emergency stash and holiday stash (I need to go on holiday, and it’s essential to my well-being, so I’m not scrapping holidays from my life).
- Know exactly how much money is coming out of my account each month and where it goes. See if I can find cheaper alternatives (I’m looking into cutting my phone bill, it isn’t massive, but if I can cut it in half over a year, I would save at least £84)
- In which areas of my life can I add some extra savings? Can I?
- Be a conscious shopper. Since I started thinking about my savings and investments, I stopped mindlessly putting everything in my shopping trolley. I check the pricing first, and if it’s too expensive for its worth, I look for alternatives. This practice works. For instance, instead of getting £5 ice cream, I get £2 ice cream, which is just as good. I also started practising buying whatever I can (long shelf-life) in bulk.
I know that for some people, my actions may not seem that big, but over time, everything adds up substantially. Let’s say that I can cut my food-shopping bill down by £200 a month (£2400 a year). This is where my holiday money, extra savings, or investment money comes from.
These are just savings from food shopping. What if I were to introduce savings in every single area of my life? I’m not talking about depriving myself of everything. If I feel like grabbing this amazingly delicious coffee at the Greenwich Market, I go for it. Of course, my cuts and savings exclude all the children-related activities. I’m not making any cuts on their education.
Re-shaping spending habits is crucial on the way to financial independence and stability. Small actions and small changes lead to wealth accumulation over time, and the pressure to have this one colossal break shouldn’t ruin anyone’s life or spoil their retirement.
I know that our current world on steroids doesn’t reward patience and long-term vision with media coverage and instant fame. But if any of us wants to retire in comfort or retire early, less spending and accumulation of less crap we don’t need is the way out.
PS. I’m #MadeByDyslexia – expect big thinking & small typos.
Leave a Reply