Saving money is not the easiest thing in the world, nor the more difficult. I think that there are quite a few factors that influence how good we are at it, such as character, tendency to follow our own impulse versus a more savvy attitude of waiting a bit more and check if we really needed that treat, education and the environment that surrounds us.
I was lucky enough to have parents that did all the budgeting for me so I never had to worry about money as a kid. They saved enough money to pay for my education and I’ll always be grateful for that. They didn’t just bought luxury items and enjoyed a #YOLO lifestyle, that is the reason I never had to worry about my finance seriously as a child. I used to save my allowance to purchase magazines or food, mainly food.
It was only at university that I started to struggle with money. My main issue was that I wanted to buy too many things with too little cash. I started to work as a tutor to pay for some expenses (namely makeup, shoes and clothes) and my recurring thought was: do I prefer to own many cheap items or few luxurious ones? I never ended up saving enough for luxurious ones but I also never questioned if I could live without all that stuff. I just saved enough and then spent almost everything. Needless to say, I have thrown away/given to charity most of those items.
So when I finished university and started to work, I wasn’t 100% ready for rent, bills, groceries and all that. I’m proud I never asked money to my parents as soon as I stepped into the work industry; however, I can’t say it was always easy. For the first year and a half I didn’t take a holiday because I couldn’t pay for it. I had two part time jobs that barely paid for the bills and had enough money left just to go to the supermarket and fill the fridge. That’s how I recognised I needed to study money management.
I started by writing down each and every purchase in a notebook. That’s how I learnt that eating out, having a couple cappuccinos every week and waisting money on cheap 20-dollar-clothing was the reason I had a limited budget. When I became tired and bored or writing, I dowloaded an app called Expense. It is a very simple tool as you just write how much you spent for what and categorise your spendings in travel, groceries, health and fitness, food, etc. It is not linked to your bank account so you have to do this manually.
And that’s what worked for me: manually entering expenses made me feel so bad I started to think twice. I also discovered where was I spending too much thanks to all the charts that come with it. It was of great help, I have to say, and would recommend it to anyone who has to learn how to live on a budget.
Now I would like to try something that divides my money into envelops, which in my mind is the next step. When I see the money I saved I tend to think: wow, that’s a lot. However, if I then divide that amount into: money that I need for the rent, money that I saved for the bills, money I’ll use for groceries and so on and so forth, I’d have a clearer vision of what my wallet looks like. Of course, I won’t be using real envelops, just apps that do that for you.
Something else I want to try is one of those new apps that take a look at your spending patterns and then start to invest a little bit for you – a little bit that according to them you won’t miss. I’ve seen a few posts about them and it looks like they work, so why shouldn’t I give them a try? I’ll keep you posted about that.
So that’s where I stand now: still learning but able to see some progress. Not a millionaire yet, though! I am also doing some work for this startup called Osper, whose goal is to teach kids what I’m learning the hard way. That makes me really happy, it feels like I’m doing something for my old self as well as many other kids in the UK.
I hope you enjoyed this “confidential” post, it felt like writing a confession to me. It has been a long journey for me, but I think I’m slowly getting there.
What about you, how do you budget?