Building savings to bubblewrap my new life.

doingitanyway

I would like to join the savings gang if you will have me.

I am a fifty something on the verge of a big life change.   I am moving away from the place I have lived for many years to a lovely market town with rural countryside on my doorstep plus a nature reserve and a river. I will be under 5 miles from the sea too. 

I had debt of £24,000, but between 2017-19 I became debt and mortgage free. I met the debt challenge head on and now I want to do the same with savings. I have barely any savings (£270) and of late I am overspending, setting myself up for debt if anything goes wrong, and it will, because that is life. I live alone so the buck stops with me and having no savings leaves me feeling nervous.

I have a tiny income but the plan is to live simply and be free to pursue my own creative project rather than teach it! The homes I am looking at are more expensive than I thought so I won’t have the financial cushion I had hoped for.  To enjoy my new life I will need a budget and some savings.

My goals are as follows:

Create a budget

Set up pots to support my budget

Have my discretionary spending in one account that can be monitored on my phone with an app.

Build a buffer of £100 in my discretionary account

Create an emergency fund of £1000

Close a rewards account

Explore SIPPs and ISAs

I will sleep on it and start preparing the budget tomorrow

longway2go

Welcome, I have only just joined this area myself and must say it's a very friendly bunch. 
Your move sounds very exciting and a lovely place to live. 

Skint_yet_Again

Hi doingitanyway 🤗

Well done on becoming debt and mortgage free. Your changes sound very exciting. I’m similar in many ways, early 50’s about to sell my house to downsize, pay off my mortgage and help my DS move out and buy a place with his girlfriend. They both live with me and have a crazy dog 🐶 

Not having savings or an emergency fund can make you feel really vulnerable so I look forward to following your progress and any tips or ideas along the way 😁

Irenadler

And a belated hello from me too! I am similar age & small income, and have finally got my head around saving (after a lot of squirming and denial, and budgeting, and erm, finally sticking to a budget!) Fantastic you are out of debt, and long may all us stay that way.... 

doingitanyway

Thanks everyone for the welcome.

I've been on diaries a while but once I ventured out of debt free diaries to post elsewhere. They were so nasty I never did it again. Until now, so I appreciate the niceness.

So today I am having a NSD. When I was getting out of debt I did these a lot to make my budget stretch further. I'm going to start by committing to 2 NSDs a week but will aim for 4 in a few weeks so I am not spending more days than I am spending. 

I drew up a budget. Trying not to make it too rigid so it feels comfortable. It is fair to say it is a work in progress. Will keep going...

I set up a standing order for 2 premium bonds a month, something I have been going on about for ages but still hadn't done. I cancelled my CU Christmas savings of £20 a month to enable this. Neither pay interest but with the PBs at least I might win something...also SOs work for me as I don't need to make the decision to put the money away each month.

I hope everyone is having a good weekend.

Irenadler

Sounds like a good plan - took me ages to get going, but I should've started like this! Less painful....

MovingForwards

Somehow I missed your new diary! Welcome to the exclusive area, where we share hints, tips and ideas, while encouraging saving.

Excel is great for budgeting on, mine is kept on my phone so I can update it wherever I am.
-- I do an annual spreadsheet, broken down monthly, for all fixed outgoing, leaving lines for as hoc payments such as haircut, beauty salon, 3bay spends etc, then I can include them as and when required.
-- I also have a separate annual sheet for savings, early retirement savings (a girl can dream!) and pension balances.

Set mini goals within big goals, hitting the mini ones keeps focus to reach the bigger one.

Normally I would suggest paying by cash, seeing the money reducing changes spending from impulsive 'wants', to controlled 'needs'.
-- one of the things I do is move money to savings if I haven't spent that budget eg £25 a week food, spend £18 and transfer the remaining £7, my new budget starts the week after.

With savings don't bother with cash ISAs, the interest doesn't help and you have a £1k personal tax allowance for interest money earned. Find a regular saver as they pay 1%+ depending on the bank, those few pennies each month does boost your pot. 

Well done on your NSD 🤗

atrixa

A belated welcome from me, too! Completely agree with the above re cash ISAs, go with a regular saver (although the interest rates are pants at the moment). I do a zero based budget, but there's loads of different methods. You can try a few and see which one serves you best

doingitanyway

Thanks @MovingForwards

I am definitely not good with spreadsheets and figures. I get a cloud coming over my head just thinking about it. I have actually been on a spreadsheet training course, still find them confusing.

My plan is the same as when I cleared debt as I know it works for me.  I set up standing orders so invisible savings happen then I cut out unnecessary expenditure and transfer the would-have-spent into savings. So, for example, today I cancelled my beauty treatments (MSE as I use a beauty training college for a fraction of the price, but it still adds up) I will do a pedicure myself and do my own face scrub and mask tonight. When I was getting debt free I used to do Face Pack Friday. It was rubbish TV and 2 beauty treatments of my choice but always a face pack and facial scrub thrown in! I allowed myself a mini bottle of Prosseco and popcorn! I'm going back to this! Anyway, I digress, the £43 (including fares) saved I am transferring to savings. If I have excess in my discretionary account I want to leave it there and see if I can build in £100 buffer there.

I want my main account to be just for SOs, DDs and pots. I want to ignore this and never use for discretionary purchases

Funny you mention using cash. This is my preference for discretionary spending but Covid has me using a card and that is why my spending has got messy. The answer is one account ring-fenced for this where I can see all transactions on an app. Working on this one...

I am still working out a budget. It is hard for me!

Today I go and cancel an account I pay for and get rewards. That £17 will also go into savings.

Can you spot flaws in this plan??

Thanks @atrixa. I had a look at zero budgeting. I had never heard of it before.

Wishing you all a positive day with a joyous moment or two thrown in

MovingForwards

Mine are only basic.
How about a note pad, with headings for different things? When a bill is paid it gets ticked, when a spend is made it gets written under the appropriate heading. End of the month add each section up to see where the money went and what could be trimmed back.
-- I also do zero budget, never knew it was a 'thing' until Atrixa said.

Your FPF day sounds wonderful 🤗 ends the week, allows it to wash away and start the weekend refreshed.

There are never flaws, only work in progress ideas 😁

riotlady

Another belated welcome Love the face pack Friday, I might steal that!