How to curb spending and double savings
I want to preface this post by saying I know I am incredibly lucky. I earn a good wage and am able to set aside money for savings each month. I know this is not possible for everyone and that no advice will change that- we’re in a time when even just the basics of life are more expensive than ever and salaries have not kept up so I am not preaching that you should be doing better. But if you are in a position where you feel like you can cut down on unnecessary spending and want some tips on how to save better, then you might find something for you here.
You are wasting more money than you think
A few years ago I decided to really understand my spending. I was saving a decent chunk each month but I was still curious to get to know exactly where my money was going. Once I started paying more attention I was shocked at how much I felt I was wasting on things I didn’t need or appreciate. Just by looking at where I was spending money and being deliberately mindful, I managed to double what I was putting away each month, so maybe you can also increase what you set aside.
5 easy steps to spending less and saving more
I put together a dynamic excel budget spreadsheet listing my estimated ‘budget’ per month (which was what I thought I was spending) and then my ‘actuals’ for each category per month. I was horrified by how much more I was spending than I realised and on such unnecessary stuff. I was sickened by how much I spent on taxis, my grocery shopping was poorly planned and wasteful and I was buying a lot of stuff- stuff I didn’t need and didn’t even care about not long after buying. Seeing the numbers for a few months in a row was a real wakeup call and just this alone jolted me into a new way of thinking about spending.
Keep track of every purchase
I switched my daily spending to Revolut. I still have a Maltese bank that my salary is paid into (and my mortgage comes out of) and MeDirect for some saving and investing, but Revolut is still the best option I’ve found for daily spending. The reason being that the balances update instantly and it automatically categorises spending, plus you can add new categories and make adjustments so that you don’t need to go through every transaction each month, just take a look at the category totals. If something is higher than you expect or would like, you can dig into each transaction. This helped me save so much time each month in keeping track of what I was spending and what I was spending it on.
Switch all your spending to Revolut. It updates instantly, categorises your purchases and let’s you set budgets. Even when it just comes to keeping track of what you have spent, it’s so much better than traditional banks.
Create a spreadsheet, or use mine. In the “Budget” tab, fill in what you want to spend each month. Then once a week, or once a month, fill in the “Actuals” and see the “Overview” tab tally up what you spent vs what you should be spending. It’ll turn red when you over spend and green when you save more than expected.
It’s rewarding to see the green boxes (and believe me, they’ll all be red in the beginning, it takes time to learn new habits) but it’s also a very enlightening exercise to actually go through your spending, transaction by transaction. You will start off horrified but don’t give up- just do better next month. Just doing this exercise helped me be way more mindful. Next time I was about to book a taxi I already started thinking “can I walk?” and I instantly stopped a lot of small, mindless purchases that all add up.
2. Write monthly reports
At the end of each month, write up a few bullet points summarising the month. For one month, for example, I discovered:
Considering I barely wear makeup, I spent a lot more on beauty than I realised
I needed a category specifically for large electronic purchases- €279 on airpods without even thinking.
I spent a LOT on the cat- I purposefully buy quite expensive food because it is much better quality (I’ve done a lot of research) but I also spend a lot on toys and gadgets that she don’t give two shits about.
I spent 100s on clothes each month, which I justified by donating a lot to charity but I always wear the same 5 things!
Just by being more considerate of my skincare spending, holding off from clothes shopping and thinking twice before I splurge on some new electronics I could easily save a huge chunk extra that month.
3. Meal prep!
Meal prep can mean a few different things. It can be as simple as sitting down on a Sunday and planning your meals for the week ahead, building a grocery list from that and only buying those things. Or it can be a bigger project where you prep big batches of those meals and freeze them to reduce how often you cook overall.
I do a mix of the two. So once a month I will search online for a load of healthy recipes that sound delicious and are suitable for freezing. For examples soups, stews, curries, pasta sauces. I build a shopping list in my Notes app on my iPhone and only buy those things. I then make big batches, sometimes up to 30 servings. I portion them out, keep some in the fridge and freeze the rest. I like to find things that freeze so I’m not eating the same thing for a whole week and instead stock the fridge with a few different things so I can see what I feel like each day. Then, during the week I’ll look at my freezer and pull out a few portions for the week, but I might also fancy something fresh- for example sausage and broccoli pasta doesn’t work well as a pre-prepared meal so that week I’ll buy broccoli and sausage and make it fresh one day.
The overall idea is that you plan for a week, only buy what you need and use what you buy. It helped me stop wasting food and save money. I literally halved what I was spending on groceries and I could be more frugal if I wanted.
For a few years, I went so far as to keep a spreadsheet of the cost of grocery items and how they changed, and the cost per serving for my batch meals but I’m not super dedicated to that, it’s just interesting to see how cheap you can make a healthy meal, but takes a lot of work!
4. Use your learnings and build better habits
So you’ve seen from your monthly financial report that you’re spending a lot on certain categories that aren’t essential. Now you need to use that learning and make a conscious effort to cut back. Whether that’s walking more, or taking the bus, or carpooling. Perhaps it means uninstalling ASOS or closing accounts where you doom spend. I found that unsubscribing from marketing lists helped a lot- I’d convince myself I was SAVING by only shopping in the sale but since unsubscribing I find that I don’t need things at all, so I am ACTUALLY saving.
If having a goal, or an aim is a way to help motivate you- do it. I had a goal to save 20% for a deposit to buy a home- the actual deposit was 10% then I had some extra savings to fix up a few bits. I also always have at least 3 months ‘runway’ of essential spending in the bank in case something happens, but I generally try to up this to 6 months.
5. Finally- invest!!
This is more of a tip of what to do with the savings you accrue, but helps you save more as the savings become worth more. Don’t just keep the money in your basic bank!
Savings account: Shop around for an account with a good savings rate. Right now, MeDirect has a 2% savings account for EUR and Revolut has 2.70% for EUR and 4.39% for GBP which is paid DAILY. By putting your money in a savings account your savings start earning for you.
Start investing: You can do this online or you can use a Malta based service, either via your existing bank or via MeDirect for example. With MeDirect you can either invest yourself, or you can use a managed portfolio where you tell them the risk level and they invest for you. They also have financial advisors in case you want some help.
