How I Save: The Londoner who has saved up £31,700 towards a house deposit
Our weekly series, How I Save, explores the reality of how we spend and save our money.
And when we say reality, we mean it. No glossing over those pricey purchases and pretending things were on sale when they weren’t.
Each week we ask a different person to chat to us about how they save money, then to track their spending for a week.
Then we chat with an expert to give them some money-saving tips they (and we) can learn from.
This time we’re nosing around the finances of Marianne*, 31, a writer from London.
How Marianne saves:
I earn £35,000 a year and in my savings account right now I have £31,700.
I’ve saved this much money by being very persistent. It has taken me around five years to save this much, and I have managed to do so by supplementing my main income with additional work on the side (freelance writing commissions and work on podcasts and other creative projects).
I’m saving for a two-bedroom flat with my boyfriend. We have finally started looking at properties and applying for mortgages – a stage I never thought I would actually get to.
I make sure to save £200 of my salary every month, and whenever I get an additional lump sum, I will put the majority in my savings account. On average, I am probably able to save £400 per month – but in the past, unexpected expenses or random decisions to go on a huge holiday have hindered my progress.
For example, I chose to go to Las Vegas for my 30th birthday and blew a big chunk of my savings. I regret nothing.
I’m not brilliant at weekly budgets or keeping track of every penny I spend, but I am generally pretty sensible with money (Las Vegas excluded).
My main expenses used to be nights out, meals out and city breaks – but 2020 has put a stop to most of that anyway.
I struggle with saving mainly because my salary is relatively low compared to how much I have to spend on rent to be in London. There isn’t much left over at the end of each month, even if I am pretty frugal.
Also, the irregularity of my additional income makes it hard to know exactly how much I will be able to save any given month, so some months I can save a lot, but then it might be slower for a few months.
I also struggle with saving because I am notoriously disorganised. I work in the office every few weeks and whenever I am commuting I don’t make lunch – either because I don’t have time or I don’t have the energy – so I end up spending close to £10 on lunch and coffees most days when I go to the office.
Lockdown has affected my saving because I have so much extra cash, because I’m not doing anything. My gym membership is frozen as I’m working out at home, I’m not spending a fortune on the Tube because I am working from home two-thirds of the time. I’m not buying lunches out as often as I used to and I’m making a lot more meals at home.
Also, no big holidays or weekend breaks this year has meant I could save a lot more. I have probably saved around an additional £3,000 over lockdown.
How Marianne spends:
- Rent: £625
- Bills (council tax, water, broadband, gas and electric): £112
- Spotify: £9.99
- Disney+: £6
- Phone bill: £38
A week of spending (please note this week was recorded before the second national lockdown):
Monday: No spending today. I worked from home. Ate leftovers for lunch, made chili for dinner with bits we already had in the fridge, and spent my evening doing a writing course on Zoom – which was free.
Total spent on Monday: £0
Tuesday: I did a food shop after work. I was lazy and picked up some bits for the week from Waitrose because it’s closer than the big Tesco. We needed fresh vegetables and I treated us to some salmon. I also got good deals on cheese, butter and yoghurt, so I felt like we were mostly sorted for the week.
Total spent on Tuesday: £26
Wednesday: Nothing. I literally only left the house to go for a run after work. I filled a huge ASOS basket with loungewear and comfy tracksuits, but I abandoned it before I decided to check out.
Total spent on Wednesday: £0
Thursday: A birthday card and present for my friend – I got her a book and a fancy candle – for £23.
I popped to Waitrose (again) on my way home to buy some cottage cheese, capers and fancy bread for my lunch, which will be enough for my lunch for Friday, too – £4.25.
I bought a paper because I had an article published (yay): £2
I booked a spin class for Saturday morning at my local studio – I normally treat myself to one or two classes per month. They are pricey, but they make me feel so good: £12
I went out for dinner for my friend’s birthday. We had delicious Middle Eastern food and lots of wine and pricey cocktails. It was an expensive restaurant, but I feel like I can justify it because I am barely going out for dinner at the moment, and it was her birthday: £70.
Travel to and from dinner – I took the bus both ways so it wouldn’t be as expensive: £3.50.
Total spent on Thursday: £114.75
Friday: It’s my boyfriend’s birthday in two months – and it’s a big birthday. I wanted to do something special, so I booked a weekend in a fancy hotel with an even fancier restaurant. I used a Wowcher deal, so it only cost £220 for two nights, with dinner included both nights. I booked both our trains for the weekend too, which cost £55.
I cooked all three meals at home, so didn’t spend anything else today.
Total spent on Friday: £275
Saturday: Spent the morning travelling across London to view a prospective flat. I treated myself to a flat white as it was an early start – Travel £3.50, coffee £2.75.
I then went spinning, which I had already paid for. I spent the rest of the afternoon writing.
I bought a bottle of wine and a bar of chocolate to have after dinner with a movie – because hey, it’s the weekend, for £8.
Total spent on Saturday: £14.25
Sunday: I went out early to buy eggs and sourdough for brunch. I also bought some flowers to liven up the living room: £8.
My friend came over to spend the afternoon watching scary movies and gossiping – she brought snacks and tins of gin & tonic, so I didn’t spend any money.
Total spent on Sunday: £8
Total spent this week: £438
How Marianne could save:
We spoke to the experts over at Plum, the smart app for managing your money, to find out how Marianne 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:
Hi, Marianne! Thanks for sharing your money diary with us this week.
While living in London comes with perks… it also has a price tag attached to it.
With that in mind, let’s take a closer look at your spending and saving to see what additional strategies could help you put more money aside while still enjoying the best London has to offer.
If there’s one thing we’ve learned by regularly talking about money, it’s the importance of finding the right strategy for you. If you don’t have much left at the end of the month despite being quite frugal and you want to save more, it’s potentially time to review your current approach.
If, as you mention, you don’t feel like tracking every penny you spend or organising a weekly budget, then automating these tasks could be for you.
You could try using a money management app like Plum, which will allocate your monthly spend into categories like Groceries, Shopping, Eating Out, Entertainment and Transport, to anonymously benchmark your spending against people with a similar financial profile to you.
This is the first step in identifying your spending habits and working out which ones you want to change.
To have racked up £31,700 in just five years of work is a great achievement, so give yourself a big pat on the back. Your persistence and commitment to your flat goal is admirable and you’re very close to reaching it.
It’s worth keeping in mind that with a big purchase like a flat, additional expenses will come up. As you mention, those unexpected expenses tend to hinder any saving progress that you make so it’s sensible to prepare for them in advance.
If your additional income tends to be quite irregular, making it difficult to know how much you should set aside,you could try using technology to automate the process for you.
An app like Plum can analyse your income and spending to calculate exactly the right amount to deposit, without ever leaving you short for what matters. Plum adapts to your lifestyle, and it’s a bit like putting your money on autopilot, which is what we all need when life gets busy!
With a little help from some smart technology, you may find that saving money in London is a mission possible…
*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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