Financial Wellbeing: Saving Checklist (How to Save Money and Build Wealth)
Welcome to Be Your Own Date! If you have been following my series on financial wellbeing and personal finance checklists, I hope that I have got you thinking about budgeting effectively and spending consciously. The final post in this series is all about saving.
That's me, water rappelling in La Fortuna, Costa Rica
My saving goals
Saving is a core money management skill. It has enabled me to invest in myself, realise my goals and pursue my greatest passions. Fortunately, my savings have afforded me the opportunity to travel and explore around the world, from backpacking in hostels in Latin America to lounging in boutique hotels in Greece - there's nothing that I love to do more! This includes travelling solo and the personal growth and development that comes along with it, which is part of what Be Your Own Date is all about. The idea being to get to know yourself better, to take care of yourself, to be satisfied with your own company and to do the things that you really enjoy, even if that means venturing out alone.
One of the wonderful things about travelling, whether solo or in the company of others, is the opportunity to meet people from all walks of life and potentially make new friends, perhaps just for that trip or, even better, a lifetime!
When you have a goal in mind and something to plan for, it is soooo motivating and can make saving far easier and much more enjoyable, rather than simply saving for the sake of saving. The "why" is so important here, don't you think? I'm not sure where I will go next, but I can't wait for another adventure!
Tell me, what excites you? What are some of the goals that you are working towards? Let me know in the Comments section below and connect with me on your socials.
Self-care includes taking care of your personal finances
Reminder notification promoting financial self-care | Graphic by Amy-Jo Lynch
At this point, you may be wondering why I choose to place so much emphasis on personal finance and financial wellbeing. Well, the reason is that I truly believe that self-care, which is hugely important to me, includes taking care of your personal finances. There are many different aspects of self-care, and for me, this is one aspect to really highlight and bring attention to. As I have mentioned before, understanding and learning how to manage my personal finances helps me to build financial resilience and feel more secure, leading to a much healthier relationship with money, as well as a positive impact on my health and wellbeing - no matter how much I am earning. Essentially, being and feeling in control of my finances really works for me.
In a future post, I will return to financial resilience and share some of the ideas that I have explored to supplement my income and, in turn, save more money.
How to save money and build wealth
Saving money is one thing, but building wealth is another! My godmother taught me early on to watch my money grow, and now I can fully appreciate that it is a great incentive to save as it helps to build momentum. Crucially, saving money is a life skill that we can all learn and practice, and this includes saving on a small salary. Be Your Own Date is a platform that supports financial education, literacy and inclusion.
So, when I frame saving as a habit and behaviour, I find that putting aside a set amount of money regularly, regardless of the amount, is what really counts. It’s not about how much you earn, but what you do with it! I recall saving £5-10 each month and feeling very pleased with myself because that is what I could afford at the time and I made the effort because I really wanted to buy my mum her favourite perfume as a gift for her birthday.
Tip: Taking the time to watch your money grow is a great incentive to continue to save. However, there is a balance to be had, so be careful not to check too much!
Grow your savings and your wealth | Photo by Micheile Henderson by on Unsplash
Making the transition from saving to growing your money and building wealth is an interesting one. Saving is important but I also consider how I can grow my money and really make it work for me. Whilst some of my savings help me to achieve my short and medium-term goals, such as travel and getting on the property ladder, there are parts of my savings that I try not to touch at all. This is because I am motivated to work my way toward financial independence, also referred to as financial freedom, and having the option not to work if I choose to do so.
Tip: If you are fortunate enough to receive a windfall or a bonus from work, why not consider saving a portion of the money, as well as enjoying spending some of it. Conscious spending, of course!
Investing in the stock market is also something to be considered carefully to help generate wealth, but that is not really within the scope of this post. And, no, I would not consider trading! Just remember that when investing, your money is at risk. What you pay into your investments, might not be what you get out. It could be more, but it could also be less. Much less.
Less thrilling, but really important, is saving and investing within a pension. This is a tax-efficient pot of money that you contribute to, usually throughout your working life, and later becomes your income during retirement. So, you've got to be in it for the long-term. More on that later.
Be Your Own Date Saving Checklist ✓
Now that you've had a chance to think about the passions that you would like to pursue and the financial goals that you would like to achieve, here are six key principles to also consider:
1. Automate your saving strategy - I work out how much I am saving and what I am saving for, as part of my budget plan, and automate the payments to top-up my savings accordingly. This is something that I review and adjust regularly. Then, once I get into a good saving rhythm, I start to increase the amount that I save periodically, if I can afford it. If you find that you have depleted some, most or all of your savings, simply start again. Life happens! Save. Watch. Repeat.
2. Build an Emergency Fund - this is pretty much a rainy day fund to pay for unanticipated expenses, enabling you to deal with an emergency with far less headache and far more confidence knowing that you have the money saved to deal with it. Starting with whatever you can manage and aiming to reach at least £1000 seems to be the general consensus in my personal finance reading, and I have shared my favourite books further down. Having this fund in place is also part of building your financial resilience so that you can, hopefully, deal with what life throws at you with less stress and upheaval. The key here is to only use it for an emergency though!
3. Research high-yield savings accounts - these accounts typically attract a higher interest rate than your regular savings accounts, which will help to grow your money, such as Individual Savings Accounts (ISAs). Although, let's face it, we need to be realistic about what can be achieved when interest rates are low.
4. Learn to say “no” - put simply, if you can’t afford it. You can't afford it! I know that this can be difficult sometimes, especially as there is a people-pleaser within us all to some degree. The more open and honest conversations that we have about money, the better off we will be as a society. I'm curious...do you agree?
5. Avoid comfort creep (also known as lifestyle creep) - if you are in the position to increasingly earn more money e.g. receiving a pay rise, you may find that you start to spend more and more on lifestyle expenses (our wants rather than our needs). So, this is a gentle reminder to be mindful of your spending in order to maximise your savings otherwise it may creep up on you!
6. Consider investing in a pension - whether you make contributions to your workplace pension or invest in a Self-Invested Personal Pension (SIPP) if you are self-employed, the trick here is to allocate your money toward your pension before you receive your payslip/salary/income. In my experience, what you don’t see, you won't miss. And it's probably not too late to start a pension if you haven't already or to increase your contributions. Some employers will even match the level of contributions that you make up to a certain level. So, do your research and find out more about what's available to you. It's not easy to think ahead to your retirement but think of it like this: what you put aside today is essentially your salary when you stop working in the future. Look after your future self. I'm sure that they will be thankful!
Don't delay! Start to take better care of your personal finances today! Oh, and have a read of my other checklists by clicking the links below:
Tell me, what's your BEST money-saving tip? Let me know in the Comments section below.
💎 My Personal Finance Gems
These resources have proved invaluable in my personal finance journey:
Books
The Total Money Makeover by Dave Ramsey
I Will Teach You To Be Rich (2nd Edition) by Ramit Sethi
Your Money or Your Life by Vicki Robin and Joe Dominguez
Unf*ck Your Finances by Melissa Browne
Money School by Lacey Filipich
Rich Dad Poor Dad by Robert Kiyosaki
Research
Financial literacy research by Professor Annamaria Lusardi
Save money online
I use TopCashback when shopping online. It's a free service enabling you to gain cashback from a variety of shops and you can sign up to the website using my referral code, at no extra cost to you
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Feel better about your finances. Be kind to yourself. Be Your Own Date.
~ Amy-Jo ☀️
Disclaimer: I am not a Financial Adviser, just a regular gal sharing my experiences and encouraging others to feel better about their personal finances. The content of this blog is provided for general informational purposes only and does not constitute financial advice.
