Absolutely Lucy on her travels thanks to money saving plan, Temple views, Bangkok, Thailand 2019

I talk a lot about the best ways to save money, but it’s so important to build up your own money saving plan – and the younger you start, the better! Through travel I’ve learned a lot about managing and maximising my finances. Now I want to share what I’ve learned with you guys! I’m definitely not a financial advisor, I’m just sharing what has worked well for me. Before trying any of these tips, do your own research and make choices that work best for you. I’m writing this as a 29-year-old. So I have the benefit of hindsight and a lot more knowledge than I ever had when I was 25. I hope this post will help you be one step ahead during your twenties.

Since travelling, I’ve been the richest and poorest I’ve ever been. I’ve also become really good at saving money and cutting corners where possible. I’d much rather spend on experiences and save for something special than blow my money on nights out. We all have different priorities but whatever you put first in life is where you will see your money disappear. The question is – what will you have to show for it afterwards?



Absolutely Lucy in Thailand, temple

Money in your early twenties

Straight out of university and hopefully into your first job – I started work as a journalist but was on a really basic and crappy pay. Despite this, I was living at home with my parents for a while and while paying rent, I was also able to have some financial independence and was able to save money for the things I really wanted. After living in debt for years at university, it was nice to finally have some breathing room and freedom. It was the time to start managing my own money and naturally that means blowing some money at first and treating yourself.

But once the charm of the nights out and new clothes wore off, I started to realise how empty it felt to waste money like this. It occurred to me that I didn’t want to stay in this job forever, and I also didn’t want to live at home forever. Now was the perfect time to really save – for what? I wasn’t sure yet… But it wasn’t long until I realised how much I had always wanted to travel and bingo, I already had a good chunk of savings set aside for that rainy day! If like me, you know that you don’t want to stay in the same job, the same house or live the same life forever. Today is the day to start saving money and get on top of your finances for when you’re ready to make a change.

Temple, thailand, Bangkok

Top tips for creating a money saving plan

Household Budget

The most important thing is to get a handle on your spending and really understand your essential expenses vs. unnecessary expenses. You need to make sure you prioritise your bills before you’re treating yourself and this includes rent, food, utility bills, council tax and phone/broadband. We’d all love to have a plush apartment to ourselves filled with the latest gadgets and gorgeous furniture, but living within your means is an important skill to learn. Create a spreadsheet of your monthly incomings and outgoings and log everything – including those sneaky coffees on your way to work.

Another great way to do this is to sign up for a bank like N26, Monzo or Starling Bank – they have apps which track your spending and where your money is going. Once you’ve been tracking your outgoings for a month or two and you will start to get a good idea of your disposable income. If you’re finding it’s much less than you would like – considering looking at your living arrangements to see if you could save there. Sharing a flat is a great way to make friends, especially if you’ve moved to a new city for work or study and it helps to keep expenses down by sharing costs. Disposable income is a key factor, so it’s important to get a good handle on your expenses to create a money saving plan. 

Absolutely Lucy Bangkok temple

Building Your Credit Rating

This is one that I wish I had started working on earlier, it can have a huge impact on your life. Ironically you need to acquire “debt” to pay it off in order to get a good credit rating. A good credit rating is important for mortgages/buying a house and for taking out large loans. This doesn’t mean you should go and max out a credit card on extravagant purchases. Instead, why not get a credit card to make some affordable payments, before paying it off in the agreed period. 

For example, you could use a credit card to pay your regular food bills and then pay it off when you get paid. Over a few months, you will build up a sound credit history by spending money you were already going to spend. Certain credit cards have extra perks, such as cash back or reward schemes. Using comparison sites could help you find the best credit card for you needs. If you have a mobile phone on contract, this can also count towards your credit rating, if you don’t, it’s a great way to boost your rating.

Absolutely Lucy at temple

Pensions And Savings

Look after the pennies and the pounds look after themselves. Well I prefer to look after the pennies, the pounds and any stray Euros that sneak in. Looking at your pensions and savings is really important, it’s building a future for yourself. One of the most important decisions when creating a money plan is how much of your income to save. The more you can save and the sooner you can start, the better for your future. 

The BBC have reported you should start a pension by the age of 25 to have the best chance of saving enough for retirement. Often if you are employed by a company, they will offer some kind of pension plan. Whether you understand it or not, it’s worth ticking a box to pay into one. Its a tiny portion of your pay-check but sometimes your company will match it. You won’t even notice it has gone, but you’ll definitely notice when you retire so add it to your money saving plan today.

Other saving options could include ISAs, where you can save up to £20k per year tax free. I’ve had an ISA since I was around 18 and have always set aside the majority of my savings in it. However, you should also look carefully at your bank accounts. I was definitely guilty of having stayed with the same bank for years and never looked at my interest rate. Then I discovered it was pitiful and realised that by switching to a new bank, I could get a welcome bonus of £150 and a much higher interest rate. It’s worth shopping around for better accounts and changing every few years to get the most out of your bank. The market is designed for new customers.

Temple views

Insurance

It’s not the most exciting topic in the world but insurance and being properly prepared is so important. Just like you wouldn’t go away without good travel insurance for emergency medical treatment or car crash cover. Make sure you have a comprehensive home insurance against theft and damage. Ensure that it will also protect you in case of a flood or fire – which could otherwise be devastating. You need third party insurance on your car, but make sure you have an insurance that meets all your needs. Also – regularly check up and price compare to see if you could be getting a better deal. If you find a better price elsewhere, you can ask your current insurer to match it.

Life insurance is also worth thinking about in your money saving plan, especially if you live a high-risk lifestyle. It’s designed to pay out a lump sum of money to your next of kin if you were to die. It can give you piece of mind that your loved ones are provided for when you’re not around. You can find great deals on comparison sites like Moneyexpert. I haven’t yet looked into this, but it’s definitely going on my to-do list after some close calls in car accidents while travelling. While it wouldn’t ease the pain of losing someone, it would make sure they were provided for in a time of need.

Buddhas at temple

Entertainment

When you’ve put these tips into play, it’s important to remember to enjoy yourself as well. These budgeting tips will help you to put money aside for big purchases such as holidays or a new car. Plan and instead of risking a bad credit rating, you’ll be able to use your savings to pay! It will give you such a sense of achievement to pay outright. Before travelling the first time, I worked five jobs, and you know what, it was worth every second. When I was finally travelling, I felt so proud of myself for making it a reality!

You can also look into reward schemes from credit cards. This could help you build up your credit rating if you use your card to purchase and pay off the balance. Plus you could score free flights or purchases! Design a money saving plan that works around your lifestyle and gives you the benefits you want.

Absolutely Lucy shares her money saving plan which helped her save for Thailand trip, pictured

The biggest advice here – don’t be intimidated or feel like you don’t know enough about finance to make your own choices. I know how it feels. We haven’t been educated when it comes to growing up in a world ruled by finances. Particularly as women, the financial world can feel alien. None of the schemes, companies or advertising are aimed at us. It’s hard to understand a world when you can’t see yourself in it. But it’s important to talk about finance, to talk about money, wages and the future. Only by talking about it will we learn and we will grow, expanding both our knowledge and our finances.

Check out SavvyWoman for great tips on money and finances.

How will you start creating your money saving plan?

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