How I Save: The 31-year-old who's selling things on eBay after buying a house
Most of the people we speak to for our weekly money series, How I Save, are trying to save up cash for a house deposit.
But what happens once you’ve achieved the goal of getting on the property ladder?
That’s the situation this week’s saver, Annie*, finds herself in.
Having done the hard work of buying a home in South Wales, the content writer has had to get back into the savings habit in order to fund changes to the house.
We asked her to share her approach to saving, then got her to track her spending for a week.
How Annie saves:
I earn £23,000 a year and in my savings account right now I have £1,915.
I’ve started putting £300 a month from my paycheck into savings and I also have ‘save the change’ set up with my Halifax account, which rounds up anything I spend to the nearest pound and adds it to my savings.
Another way I have been able to save is by having a clear out and selling items on eBay. Anything I make will also be added to my savings account.
It has been a lot easier to save this year with my expenses being lower as I’m working from home. My boyfriend moved in recently and is paying half the bills, which has also allowed me to add more to my savings.
I purchased a house this time last year which ate up the majority of the savings I had, but owning a house was my goal and I am so thankful for it, especially during lockdowns and working from home this year.
I’m saving for a solid emergency fund and for work on the house. I’d love to be saving for a holiday but the facias on the house are the priority! Plus, going abroad isn’t an option at the moment. Once the facias are done, I’d like to start saving for a trip to Sweden – although who knows when that will be able to happen.
I use the ‘pay yourself first’ method. On pay day, I allocate the money for bills and for savings and whatever is left is what I spend on food, activities or anything ‘non-essential’ during the month. I’ve recently been doing this by splitting my pay 50/30/20 – 50% on bills, 30% on money throughout the month and 20% into savings.
I’m an avid watcher of The Financial Diet channel on YouTube, which although is based in America, has helped keep me focused with my savings goals and being on top of my finances.
I struggle with saving because sometimes I do like to treat myself, however the main expense has been the house. A few windows have needed replacing, the living room needed work and decorating has also taken centre stage with my finances this year.
I am aware that I have been able to save what I have as my expenses are a lot lower this year.
I’m saving £100 on commuting to Cardiff to work, I’m not going out to by lunch or having drinks after work and there’s no temptation from the high street on my way home. When things get back to ‘normal’, I know I’m going to have to keep an eye on my excess spending and keep up my new savings goals!
How Annie spends:
- £325 – Mortgage
- £200 – Parents (I borrowed some money for some house costs before the lockdown and I’m paying it back monthly)
- £114 – My half of council tax, water, electric and gas, broadband and home insurance
- £38 – Phone contract
- £7.49 – Phone Insurance
- £6.49 – My half of the Spotify duo account I have with my boyfriend
A week of spending:
Monday: A couple of items sold on eBay over the weekend so I transfer £30 from my paypal into my savings.
We’ve run out of milk this morning so I pop out on my break to the local shop. Annoyingly the minimum spend on card is £3 and I haven’t used cash in months so I buy my boyfriend a bottle of Coke to meet the minimum, spending £3.24.
Total spent on Monday: £3.24
Tuesday: Spend £28.50 at John Lewis online buying a weighing scale and a ridiculously priced hand sanitiser by Aesop.
I head out to the post office to send a couple of items that I’ve sold on Ebay. The buyers pay the postage so this doesn’t cost me anything, I just transfer the amount allocated to shipping in my Paypal into my current account. I pop into Greggs on the way back to pick up some lunch for me and my boyfriend, spending £4.90.
Total spent on Tuesday: £33.40
Wednesday: Despite being VERY tempted by items on ASOS, I resist and have a no spend day’. I try to have as many of these as possible so I can either put the money not spent towards something I need or want, or into my savings.
Total spent on Wednesday: £0
Thursday: Another no spend day. These are a lot easier while Wales is under the firebreaker lockdown. I don’t leave the house and if I’m online, I’m checking the US election results rather than online window shopping.
Total spent on Thursday: £0
Friday: Post office again today for another eBay sale. The money for the postage is again paid for so costs me nothing.
On the way back I pop into a local sweet shop, which has a huge range of items, many from America. I treat myself and spend £1.90. In the evening me and my boyfriend get a takeaway which costs me £8.25.
Total spent on Friday: £10.15
Saturday: Food shopping today. Me and my boyfriend do this every week and a half or so. To keep the cost down, I don’t buy any alcohol and non-essential items aren’t allowed to be sold in Wales during the firebreaker lockdown so no temptations there either. My half of the shopping comes to £28.50.
Total spent on Saturday: £28.50
Sunday: Despite my best efforts not to online shop, I realise I only have one jumper for the winter – having spent the majority of the year in loungewear and sweatshirts.
I purchase a jumper from H&M and add some gold ribbon from the Christmas range to my basket for crafts and decorations. Being a H&M member, I get £3 off my order and free delivery, bringing the amount to £24.98.
Total spent on Sunday: £24.98
Total spent this week: £100.27
How Annie could save:
We spoke to the experts over at Plum, the smart app for managing your money, to find out how Annie 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 Annie, thanks for sharing your money diary with us this week!
Lockdown has definitely altered spending and saving habits quite a bit. Some have even found themselves saving more than usual, without the regular temptations available to spend on. However, that newly found saving mindset might go out of the window as soon as the restrictions are lifted.
To make sure that’s not the case, let’s analyse your money diary to see what additional long-term strategies you could implement that would last long after lockdown is over.
When it comes to spending, budgeting is the king! Just hearing that you’re implementing the 50/30/20 rule is music to our ears. Once you feel that you’ve mastered it, you could take it to the next level by creating even more personalised categories for your spending.
For instance, you could create a separate eating out category to track and allocate your spending on those cheeky takeaways or festive dinners with friends (fingers crossed for those!).
Having two no spend days in a week is a pretty impressive feat, but that only works if you have superhuman levels of discipline! In modern times, with online temptations on every single tab on our browser, it’s hard to say no to putting yet another item into our shopping basket.
If you do find yourself extremely tempted to buy something (you know we’re talking about ASOS here), instead of making an unplanned purchase, some people find that having a 30 day ‘cooling off period’ works well for them. After it, if you still want to buy that item, go for it!
Another way to decrease your spending is to try and get a cheaper deal on your household bills. Ofgem calculates that an average household can save £300 a year by switching to a better energy and gas deal. A money management app like Plum will keep an eye on your bills, calculate how much you could save if you switched and let you know if you’re being overcharged.
We have to admit, we’re already loving the way you’re managing your savings. You’re helping yourself out already when it comes to saving with these classic tricks: paying yourself first, putting money into a savings account straightaway after you get paid, setting a budget, saving a spare change.
Your strategies are clearly working for you but you could gamify the whole experience of saving money so that it feels less like a chore and more of a fun thing to do. With Plum, you could set up a 52 Week Challenge, and save 1 pound more each week. Or Plum could stash some money away every single time it rains with a Rainy Day feature! Though, on the second thought, that might not be the best choice in South Wales…
Just by introducing a bit of automation into your money management strategy, you’ll be smashing those saving goals way after lockdown!
*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].
If you want more tips and tricks on saving money, as well as chat about cash and alerts on deals and discounts, join our Facebook Group, Money Pot.
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