The secret to saving for your great bicycle getaway is surprisingly simple: live beneath your means.
We’ve always been keen savers, and believers in living within the income that we have. We aim to spend about half of what we earn.
Even in London, one of the world’s most expensive cities, we saved a surprising amount and put ourselves in good shape for a big trip by watching every penny.
As Charles Dickens wrote in his famous novel David Copperfield:
“Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
Here are some of the techniques we use…
#1 – Know How Much Money You Have, And Don’t Overspend
This is the single biggest thing you need to remember about saving. It’s amazing how few people really know what they spend every month. Do you keep a budget (preferably broken down into categories like spending on food, household bills, eating out, etc…). If not, start now! It’s easy to do in a spreadsheet.
Once you’ve noted down numbers for a couple months, take a hard look at your income and what you are spending. If you’re spending more than you have, find places to cut back. Above all, never use credit cards to bridge the gap between your desires and your income. If you do put something on a credit card, pay it off immediately.
#2 – Be A Competitive Consumer
We frequently change power, water and gas suppliers to keep utility bills as low as possible. We only renew our wardrobe when clothes are on sale, or from second hand shops. If we need household furniture, we check out eBay and lists like Freecycle to see what we can get for cheap! Part of being a good consumer is also checking your bank statement regularly, to make sure you haven’t been over charged for something. We find mistakes several times a year on our statements.
#3 – Eliminate Luxury Expenses
Why take a taxi when public transport will get you there? Ditch the car if at all possible. Giving in to gadget temptation can also eat away at your savings. When you purchase something like a mobile phone, go for the simplest model. They all make phone calls, so why go for the flashy model? You’ll only have to worry about losing it, or the phone being stolen. Unless you are in a job where you really need to send emails all the time, there’s no need for an expensive phone.
#4 – Save on Food
We bring our lunches to work and rarely eat out in restaurants. We try to cut down on expensive meat, focusing on more economical things like lentils and in-season vegetables. When we do buy meat, we wait until it is reduced in price at the supermarket, and then stash as much as possible in the freezer. VeganDad is a fantastic website for meat free meals that taste great and are light on the wallet.
#5 – Downsize Your House
A big house costs money to furnish and maintain. We purposely buy houses that are beneath our means, so we don’t feel stretched each month on the mortgage, and we don’t need to buy a lot of furniture to fill every room.
#6 – Set A Top Bank Balance
We have a maximum bank balance that we keep as a “monthly float” for regular expenses, plus a little extra for unforeseen emergencies. As soon as we exceed our agreed float, the extra is either transferred into a high-interest savings account, other investments or used to overpay on our mortgage. By keeping our bank balance to a set amount, we were not as tempted by a big bank balance to buy something we didn’t need.
#7 – Participate in Company Pension and Share Purchase Schemes
You might be planning a big trip, but you also need to plan for the future. Company run schemes are a great way to maximise your efforts, because the company usually makes a contribution that adds to your savings. Not taking part is like throwing away the money the company would have given you.
#8 – Claim Expenses and Refunds
It’s staggering how many people forget to claim work-related expenses back from their employer, or don’t apply for a refund when they’re entitled to it. Was your train late? Most public transport operators compensate for delays. Did something break down earlier than you expected? Tell the company and ask for compensation. These may not be big things on their own, but many small payments add up to a lot over the course of a few months.
#9 – Have A Treat Fund
Even when you’re saving for a big goal you need a bit of encouragement now and then. With nothing to look forward to, misery soon sets in and if you’re totally unhappy, you’ll give up on saving altogether. To prevent this, set aside a small amount each month to spend on a treat of your choice.
#10 – Find A Friend!
There’s no doubt about it: two people can save money easier than one person alone. If you can live with someone, the household expenses are immediately halved. Even if you don’t share a home, two or more people can bargain for bulk discounts on products, and of course you can help keep each other motivated. Don’t forget: friends can be online too! There are some fabulous budget-conscious communities out there, to inspire you and keep you on track. WiseBread is one of our favourites.
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