How we saved £25,000 in just one year & How you can too.
How we saved £25,000 in just one year & How you can too.
One thing I don’t want to do is brag, if one person reads this and thinks it possible then we will be happy. This post is merely to inspire someone who has a goal but doesn’t think they can afford it, It’s all about the baby steps and working towards the goal – in this case saving money!
When you live in the UK and work a nine to five job in a decent career you can make a pretty good income. But factor in your outgoings, rent or mortgage, food expenses, gas, electric, maybe a phone bill, car payments, insurance, house insurance, money for hobbies, the gym, maybe a nice meal at the weekend and a night out from time to time, you get the picture!
Before you know it, that high paying job with your decent wage is gone before the weekend is over.
So how is it that we managed to save £25,000 in one year when sometimes it’s impossible to save £25 a week?
There are a lot of factors that attributed to us putting away a lump sum of money each month to savings. We had bills like the rest and still we saved £25,000, maintaining our fix of holidays or weekends away at the beach, glamping or skiing.
I’ve found there are a number of ways to save a lot of money and our plan was just one of the options available to everyone in which to do so.
Lets start with how we saved £25,00 in just one year &
how you can set about doing the same.
Here are our five easy steps!
Step 1: The Plan
It all started with a plan. We had it in our head that we wanted to make shit happen. We wanted to buy a house, we wanted to get married, but we also wanted to go travelling.
We wanted it all but we didn’t want to wait years to make it all happen. We knew we would have to make some sacrifices in order to make it work and to achieve our goals, but we were prepared to do it.
We sat down and worked out our dream line (which I will discuss in more detail in tomorrow’s post) like we do every year.
We decided what we wanted to achieve in the coming year and how we planned to make it happen.
Now you may be thinking, it’s different for us because we were in Seoul and you are in (whatever city you happen to be living in right now) and so this plan is not achievable. But if you ask me that is just an excuse. If you are truly willing to make some sacrifices then you too can save £25,000 in one year like we did.
Also a note that if you look at current statistics available online you will see that Seoul, South Korea ranks top 72 of most expensive places to live in the world. If you compare that to the likes of Dublin, Ireland for example who ranks at #106 then you can agree it’s still a relatively expensive city to save as much as you make in a year.
The thing about making a plan, writing it down and looking at it everyday is that it reminds you why these sacrifices are being made. It keeps you focused, when you just want a break from it all.
We worked out what we wanted, we divided it into 12 months of the year, breaking it down into an affordable monthly plan. Saying you want to save £25,000 in one year can be overwhelming and can feel unrealistic but when you break it down into a monthly figure you start to realise it can be possible.
Lets do the math:
25,000 divided by 12 equates to 2,083.33. Divide this again by 2 (because this goal was for us as a couple) then we needed to save 1.041 each month. If we break this down again into an affordable weekly goal then we each needed to save a total of 260.41 each to reach our goal of 25,000 in 12 months.
Now our goal of reaching £25,000 in one year wasn’t looking so bad and we just needed to figure out how we were going to do it.
Without going into detail of our monthly incoming and outgoings I will just say that we needed to get creative to ensure we could save £260 per week and still be able to pay our bills and put food on the table.
Step 2: Get Creative
We like our trips away and our weekly dinners out but how bad did we want it while trying to achieve our goals for the year. Let’s just say a lot. We’ve grown accustomed to taking trips and constantly enjoying a holiday here or there, so we weren’t prepared to stop travelling!
Instead we used our blog aka hitchhikinginheels to secure weekends away or activities that we wanted to do without having to pay a penny. We contacted ski resorts, we reached out to cooking schools and other events that we wanted to take part in to offer a review in exchange for a chance to stay in their ski lodge, or take part in their class. Obviously we had to work for this, take photos and write the reviews, but whats work when it’s something that you love to do!
We managed to continue to do the things we loved without having to pay a penny for them and thus saving those extra pounds each month to add towards our goal.
This is just one thing we thought of because we knew we could provide a service needed by others in return for getting a service we wanted.
How can you get creative using your skills?
Step 3: Leverage your skills
In Korea, whilst it’s not the most legal thing to do (I hope no government official is reading this right now) we took extra jobs teaching English to kids, adults and groups after our 9-5 finished.
Those extra classes helped to put that extra bit of cash away at the end of the month in one lump sum without really making much of a sacrifice.
Once the year was up and we’d reached our goal, we even continued with the jobs because they gave us that extra bit of cash to play around with, book a trip or buy something to reward ourselves with at the end of the month.
Step 4: Create Passive Income
Most people work for their money, but the key to generating savings and becoming successful is making money work for you. We learnt this strategy through reading the “rich dad, poor dad” book.
Doing something once and continuing to generate money is the idea behind passive income. Create a product, set up an Etsy Store selling prints that you did once and copied for future sales or buy a rental property like we did and make money from the extra rental income each month.
Your options are endless, as long as you don’t have to trade your time for your money.
Step 5 : Change your spending habits
Ask yourself these five simple questions before spending your hard earned cash.
Do I really need it?
Can I live without it?
What’s more important, the object in question or my goal?
Will my life change significantly because of it?
Will I benefit from it long term?
If you answer yes to any of these question then it may be necessary to make the spend. If not, then some things are not worth spending the money on. And you need to be honest with yourself.
I would ask myself these simple questions when thinking about buying my second coffee of the day and that little voice in my head would say yes to all five. I’m tired I need it, I can’t live without it right now because I can’t function on only one coffee. I will benefit long term because I will actually get my work done if I’m not tired anymore. The voice went on and on and this was only for my coffee, imagine the struggle when thinking about the new outfit for the weekend!
Those boots I needed or the new top were just not worth it. The new phone I wanted and the Mac I just had to have were soon just another luxury that I didn’t actually need. My old phone worked just fine and I realised all I needed was an extra hard drive to store my photos.
We started to question all the things we spent money on and decided to re-evaluate if we actually needed them in the first place.
Soon we realised that life was about making “memories” and not collecting “things” and slowly our attitudes started to change.
We became minimalists. We sold the things we didn’t need or use anymore. Christ, we had two ipads, two iphones, two mac’s, two cameras and that was just electricals! We didn’t even use half of them. We had a massive clear out and the money we made from those sales we put toward our savings.
Saving £25,000 in just one year
Before we knew it the year came to an end and we were close to reaching our goal. The great thing about working in Korea is, at the end of your contract you get a “one month salary” bonus. We knew this was coming and so it took the pressure off a little when it came to christmas, knowing our outgoings would increase a little.
But if this hadn’t of been the case we would have made sure that somewhere in the past year we worked harder to make a little more to cover what we spend around december. There were no excuses. We had made our plan and it was set in store, we did what we had to do to ensure at the end of the year we had achieved what we set out to achieve.
We accomplished our goal, we travelled to the Philippines, Thailand, Bali, Portugal, Ireland, France, Spain and back to Korea all within the year. We had our dream wedding and our adventure honeymoon and it was all because we worked hard to put our plan into action. We made saving £25,000 sound doable in our head and somehow we knew it could be accomplished.
Whatever your goal is, make a plan and visualise yourself accomplishing it.
Make Shit Happen!
September 25, 2017
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April 04, 2016