I’ve always been a saver. I remember squirrelling away the money from my paper-round when I was 14 years old, not knowing what to spend it on. Similarly, I quit my weekend job at a stationary shop when I was 16 because I wanted my freedom back instead. I realised early on that money can trap you or free you. This post is all about how we used ‘saving’ as a weapon. By being savvy, we are now living mortgage free in our 20′ and 30’s.
I know of friends and family that are natural spenders; as soon as they have money they buy something with it. We all fall into the category of either spender or saver, but that doesn’t mean that you can’t find a balance of both. By saving a high percentage of our income we are now living mortgage free. Keep reading to find out how we did it.
In general, I think that a balance of both saving and spending works the best. However when you have a specific goal to reach in the short term, then a more disciplined approach is needed. The extreme of saving every penny means that you can become selfish and take advantage of other people in order to help yourself. Similarly, being overly generous can leave you with nothing at the end. A happy medium is what we are looking for. Nobody wants to be the friend that doesn’t buy the round of drinks at the bar or doesn’t leave a tip at the restaurant.
Living Mortgage free: Our top 10 tips for saving
1. Get rid of any debt:
This is one of the first steps we took when we started to save seriously. We weren’t able to instantly get rid of the debts we had, but we created a plan to get rid of them. This became our priority. We had a couple of loans that we had taken out to buy vehicles, and every month a chunk was going towards paying the loans back.
It was only after doing some research that I realised how much interest we were paying back on the loans. Although it didn’t seem like a huge amount every month, over a 5 year period it was a hell of a lot of added interest. Continuing to pay these instalments back was actually a false economy. We were wasting a lot of money by paying the loan back over a long period of time. We changed our approach immediately, and we started to save our money to pay back the loans.
I know it seems like a move in the wrong direction. Building up the savings account only to see it disappear on a loan repayment, can be disheartening, but we got a huge feeling of satisfaction when we payed those loans off within the year. Having payed off the loans, we were now able to save a higher monthly amount. We had the satisfaction of not wasting money on the added interest of the loans every month.
2. Evaluate your monthly spending and eradicate unnecessary outgoing’s:
This sounds obvious but it’s surprising how much we all waste without even realising it.
We sat down and went through everything we spend our money on every month. There were the obvious ones such as rent and food, but we didn’t realise how much we were spending on really unnecessary things.
We stopped buying things we didn’t need, and questioned everything we were spending.
3. If you can’t eliminate an out-going, then scale it back:
There were plenty of things that we were paying for every month, and they all added up to a lot of money. Things such as rent, mobile phone bills, subscriptions to companies for extra channels on the tv, fuel for our vehicles etc. We decided to see if we could scale back the amounts we were paying, without feeling like we were depriving ourselves of the things we enjoyed.
We made changes such as; buying our phones out-right and having sim only contracts (rather than expensive contracts where you pay for the phone itself within the repayments) we cancelled costly monthly subscriptions for extra t.v channels and chose free options plus netflix, which cost far less.
We started to walk and cycle to work and left the car behind, and we stopped paying for fitness classes and used our bicycles instead.
The biggest change we made was paying out a huge sum of rent every month for our flat. We made the decision to dramatically reduce our monthly accommodation out-going, by living with family and by living in a caravan for a year.
4. Set up a direct payment to a savings account:
Mr Sidestepping-Normal and myself run our finances quite differently to anyone else we know. Although we do have separate bank accounts, we don’t consider any of our money separate. The money in his account is half mine and the money in my account is half his. This requires complete trust and an understanding that neither party will take advantage of the arrangement. I think this might be one of the reasons for our success. We run everything past each other before buying new things. This means there is less tendency to buy something on a whim, because we both have to agree on the need to purchase it.
I know that some people would view this as an infringement of their privacy and independence. On the contrary, we feel like an invincible team with a common goal. (Please note, I DO NOT recommend using this approach unless you have 100% trust.)
We set up a monthly direct payment (direct debit) that automatically transferred an arranged amount from our bank accounts into our savings account. We couldn’t access this money when we were out and about, because it had no debit card. This meant that it was stowed away and only accessible if we decided to transfer it back in to a current account in an absolute emergency.
This is definitely a good strategy if you can’t trust yourself not to spend it. There are other bank account options available. Some of them tie your money up for a set period of time, for example 2 years. This works well for some people because you receive a higher interest rate. It’s not a good idea if there’s the possibility you might need to access the money within that time frame.
5. Question everything you buy:
By the end of our 5 year saving stint, this became second nature. It’s actually a really hard habit to break once you practice it for a long time.
Think to yourself, do I need this item? Will I use it? Could I use something I already have?
Having asked yourself these questions, take some time to think about it before making a rash decision. If you are out shopping then walk away from that pair of shoes (that you just NEED in your life because they are more beautiful than any other pair you have ever seen!) and take a few minutes to decide. If you are on the internet, go and make a cup of tea before committing to purchasing. The point I raised above (about sharing our money) also plays a factor. We feel guilty if we act irresponsibly and buy something that we don’t need.
6. Take care of the things you have and make them last, buy secondhand, fix, mend, use leftover food:
We started to question everything we bought. On many occasions we realised we could make things ourselves or fix what we already had. As an example; we turned an old bookshelf into a mini greenhouse with the help of some leftover bubblewrap and a bit of ingenuity. I also handmade gifts for friends.
I started to make our own deodorant and lip balm and we fixed the holes in our clothes. Friends and family started to give us their old clothes that they didn’t want anymore (thanks Liv and Claire for all of the hand-me-downs!) and we shopped second-hand.
We NEVER throw any food away. All left over food is eaten for lunch the next day, or Dora the dog eats it for dinner! Left over potatoes are made into potato salad. Left over pasta is made into pasta salad and we throw everything into a soup or omelette. I can hear people dismissing such small things, but when you make lots of small changes, you really do see the difference.
7. Put all of your coins into a jar to save up:
I remember my Nanny and Grandad telling me a story. When they were newly married they used to line up any spare coins they had along the picture rail. For those of you who don’t know…a picture rail is a wooden rail found in old period buildings. It runs around the circumference of the room to hang picture frames from. When the coins made it all the way around the room, they either spent it, or went around the room again.
This made an impact on me and I’ve always saved my spare coins in a glass jar. When we started to save seriously we decided to make the rule that: every time we broke into a £5, £10, 0r £20 note, we would put the coins into a big glass jar. We kept this going for a year before counting it out, and this was always money that we allocated for treats. As soon as we emptied the jar, we would start the process again.
We would always put the money towards something that we both wanted. This was usually a trip of some kind. Plus, the change was always handy to have for a float when we sold our unwanted possessions at a carboot-sale!
8. Don’t let saving money stop you from socialising or going out:
The reason that people fail at saving money, is because they see it as a sacrifice to the way they want to live. We decided that saving didn’t have to stop us from doing what we wanted, we just had to make a few changes.
Instead of going out for meals, we would cook together and eat at home. When we were out we treated ourselves to coffee and cake instead of a meal, which is far cheaper. Friends came to our house and we cooked them dinner, and in turn they did the same for us. To celebrate special occasions, we made presents and cards for people instead of buying them things. We also met up with friends to do free things, such as country walks with a flask of tea in our backpacks or a movie night at ours.
We rarely felt like we were missing out on anything. On the rare occasion when we felt that we couldn’t avoid spending money, we accepted that sometimes saving money comes secondary.
9. Take on extra work and sell things you don’t need:
We were absolutely committed to achieving our goal of buying a property (or two!) without a mortgage and living the life we chose to live. Over the period of 5 years that we saved seriously hard, we often had several jobs at the same time. We took on morning cleaning jobs, evening reception work, plus full time jobs and housesitting. That time was really manic and crazy but we also thrived on it. We also sold LOADS of our stuff at carboot-sales or on the internet. We got rid of anything we didn’t need or use, and made money at the same time.
10. Compete with yourself and each other to save more each month:
I’m not naturally a competitive person, but Mr Sidestepping-Normal and myself found ourselves competing to save more and more money each month. We became quite addicted to seeing how much the savings account had increased by. We often talked of other methods to increase our saving capabilities. After a few years of saving, we were managing to stow away a whopping 90% of our income. We never imagined that we could save so much. We exceeded all of our expectations, including the original total we were striving to save.
Spending the savings…
So, when do you call it a day and spend the money that you have so carefully saved? It’s a pretty hard decision to make. We could have carried on working lots of hours with multiple jobs, saving a high proportion of our money. The reality was that we were living in my mum and dads loft room on the wrong side f 25! We had to make the decision to finally live the dream that we had envisioned for so long. As we have many times before, we took a leap of faith. On the 31st July 2018 we left the UK by ferry (on our bicycles) and headed for Greece! We are now living mortgage free in the mediterranean…
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