20th March 2015 at 11:38am
Where do you strike a balance between enjoying spending money today, and saving for tomorrow?
My own answer to that has changed over time. As a student, I spent with no regard for tomorrow. I had very little concept of budgeting.
In my 20s, I had to get a grip on my finances, triggered by buying my first flat. Cue sensible saving on a small scale. I squirrelled away £25 each month to build-up an emergency fund, which succeeded in taking the sting out of a roof repair bill several years later. £25 a month does eventually turn into a pot of over £1,000.
My money priority in my 30s has been focused on saving for the long-term, through a combination of pension and ISA savings. And I get a kick out of finding ways to cut my costs, so that creates more capacity for me to save.
I also feel that getting a discount or deal on something isn’t actually ‘saving’ in itself. It’s still spending, but spending less. You could be forgiven for thinking the word ‘saving’ has been hijacked and used in situations which are actually about spending money – which maybe succeeds in making us feel better? As I see it, you only really save when you set aside what you’ve not spent, and pay that into your savings.
So do I prioritise today or tomorrow? The answer is both. I maximise how far I can stretch my budget with deals and discounts, and that creates capacity for me to save as much as I can. How I do that has been transformed by managing my money online. It’s now easy to have different ‘pots’ for different things, and to move money between them. When I’m paid, I then ‘pay myself’ first – I move money into my long-term savings pots – that’s my investment in how I want to live in the future. Then I know what’s left in my bank account is my budget for spending.
As for me, my focus on saving is driven by a desire to create a nest egg for future fun. And I’ll gladly use discounts and deals to create more capacity for me to save. I became an online money management convert a few years ago, and there’s no looking back.
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