If your completely fed up with living from paycheque to paycheque and having completely no savings. Then this is the post for you.
For many years i have lived like this. I would have no savings and would constantly feel like I was broke. Yet would see friends and work colleagues on roughly the same income and budget as me, living a great life, going on holidays and weekend breaks. While I was in despair wondering where I was going wrong.
Reviewing my finances…
I was terrible with money. I needed a simple but effective way to get out of the miserable rut I was in.
So after looking into my finances and realising what I needed to do. I started to make the changes.
It didn’t happen overnight, but with will power and determination I can now say my finances are in a better shape. I have ample amount of savings ( not megabucks) and seem to have more money to spend on myself.
Here’s how I did it.
Write down your income and expenditure.
I always knew my finances were in a bad shape. But absolutely hated to admit it to myself. So would kind of push it aside.
So I took 3 months worth of bank statements grabbed a pen and paper and began to do my sums.
Write it all down
making sure to write everthing down is very important. Even down to the little chocolate bar you brought on your lunch break.
You could be suprised at all the little things you waste money on. Read my post on some of the way you could be wasting your money on. http://lovedbyclaire.com/things-that-waste-money/
I was most certainly shocked to see that a huge proportion of my money was going down the drain.
here Is what I was throwing away my money with
- pointless subcribtions ( for things I didn’t need or hardly used. Even for a silly brain training game… why why why?
- DEBT looking back it was not needed an certainty could of been avoided.
- Being lazy not cooking then ordering in.
- Paying far too much on my phone tv and utility bills.
- Basicly not living within my means hence the debt issue.
After writing it all down felt annoyed with myself. After my self pitying sulk I decided no more! I began to get on top.
Clear out the debt
My first priority was the dreaded debt issue. I’m still paying for it now. I had 2 maxed out credit cards, catalog debt and a couple of those dreaded payday loans *** Unless your amazing with money never take out a payday loan no matter how bad things are. ***
In order to get myself out of the paycheque to paycheque cycle I needed to tackle this head on.
Firstly I stopped just paying the minimum payments on my cards paying off as much as I could each month. Making it quicker to get them cleared.
I set up affordable payment plans with the payday loan companies and swore to never take out another one AGAIN!!
I began to bring my overdraft down little by little until it was cleared.
ITs such a relief to know your debt has been taken care of. The months even years of burying my head in the sand was not worth it.
Cut the crap
after reviewing my income and outgoings it was pretty evident that I was wasting my money on rubbish.
I stopped all of my subscriptions for things I didn’t use. Netflix was first, I cancelled amazon prime I didn’t order frequently enough for it to be worth the £7.99 a month.
However I did keep spotify, I’m complete music junkie and it keeps my walk to work fresh and motivates me. WEll worth the money. They also do a family version that includes upto 6 accounts for £14.99, great news If you have a few teenagers.
Takeaway no more…
Realising I needed to start saving asap, the constant 4 odd takeaways a week needed to stop. I started making more meals at home saving my wallet and waist. But I hate the feeling of being deprived so I limit myself to one takeaway every 2 weeks. Something to look forward to.
The big save
Now that finances are in somewhat more order I can now start sorting out my savings. I really need to start being frugal with my money. When I was a little girl I would hate spending my pocket money and refuse to touch it. Now on the other hand It burns a hole in my pocket.
Its not going to be easy however I think must be done if I intend to stop the paycheque to paycheque cycle.
until a while back the thought of having an emergency fund was foreign to me.
I now realise how important it is. Last year my washing machine packed up it was completely broken, then because of my awful luck the tv decided it had had enough too. I had no spare money or any savings. So what did I do?…… put it all on my high interest credit card adding yet more debt.
If I had already had an emergency fund I would not of racked up a heap of debt and stress.
How much should my emergency fund be?
well this is completely upto you based on your own personal finance. Im opting for at least £1000 I think that’s ample for me.
A lot less spending and more overtime is required at least until I reach my target.
Stop the paycheque to paycheque cycle for good
if i want to be completely worry free I want to be ahead of my earnings.
I get paid weekly so if I can save at least save the amount i get paid a week 3/4 times I can lighten up my worry’s. Just in case I need to take time of work e.t.c (life is full of surprises).
I have set myself with a huge task. I know it won’t happen overnight. ITS Going to take a really long time. But i will be really happy knowing I’m a step closer to my goal each month.
Thank you for reading if you made it this far. Let me know how you save money.
LOVE Claire xx