Budgeting is one of my favourite pastimes. It's hard to believe, but since graduating ten years ago, I’ve saved up for two life-changing travel trips, a car and a house.
It hasn’t been easy; at times that’s involved working two jobs, surviving on loose change and changing social habits. But it’s also been a positive influence on me becoming a vegetarian, a keen bargain hunter and someone who always opts for walking.
In this latest chapter of my life I live in Sydney, Australia, where competitive wages make saving less of a challenge, especially compared to London life where my overdraft often tried to swallow me whole. So, as another financial goal has come my way, I'm saving once again and thought I’d share my tips with you.
The journey of 1000 steps started with one… so here we go!
Goals: How much do you need to save and when?
Choose your deadline and write a list of costs for the things you want to save for. Add 10% onto each cost to make you save even harder. Rather than a vague list, remember to be specific and break down the costs. For example rather than listing ‘travel trip’, break down your expected costs for each country. Or if you’re saving to buy a house research and write down the individual costs involved such as solicitors fees, surveys, deposit, removal services, etc.. If you simply want to save a wad of money, then just pick a figure to aim for, then add that 10% Trust me, you can do this!
Lifestyle assessment: Ready to start saving or do you need to make some changes?
Work out your current state of affairs so you know exactly where and how you are spending money. This will show you any current savings potential, or perhaps, most likely give you the kick up the tush to make some lifestyle changes. Anything is possible if you want it enough so don’t let this put you off, instead see it as a good challenge!
Use tab one ‘monthly finances’ or tab two ‘fortnightly finances’ on the Cosmic Pear savings plan template to calculate your income vs your outgoings including rent, bills, food and fun money. Now you can see what your current financial status is and if you have room to save.
Commit: Now it’s time to create your own budget to help you reach your goals!
Step 1) If you already have enough money in the ‘remaining for the month’ column then add how much you aim to save in the ‘$$ aim to save’ tab. At the end of each paycheck note down how much you actually save and if you’re strict you’ll see it start to add up. But if you have a ’$0’, or even a scary ‘-$’ figure, you need to take a deep breath and move onto step 2.
Step 2) You now need to decide where you can start budgeting and cutting back your expenses. Use the ‘now start to budget’ tab to work your way through your expenses and where you can make changes. You can also read our tips on How to live on the cheap to save cash.
Step 3) Now that you have decided where to budget and cut costs, you need to put it into action. Go back to your finances tab and update the figures with your new budget. Be ruthless and commit yourself 110% to make this worthwhile. If you still have a $0 or -$0 figure you may need to make bigger changes or seek professional advice :)
Step 4) Now you have your savings goals and your new living budget side by side in tab two. Let this be your rule book. Keep checking back and add in your actual savings amount each month in the ‘actual savings’ column. If your budget has been too unrealistic, make some adjustments, or why not think of another way to add some extra income?
Step 5) Tell everyone you are saving. Over and over again. They will soon stop begging you to stay for an extra pint, or go on expensive trips, instead, they will support you on your journey and they may even be encouraged to start saving themselves!
I hope you find these steps and The Cosmic Pear savings plan helpful. Good luck and remember to always aim to have your cake and eat it!
Written by Kerri
One half of The Cosmic Pear