How did my husband and I save 20% of our annual income in 2017?

claiza (42)in #saving • 7 years ago (edited)

Well, here’s one thing about me that I haven’t said in my introduction post, I am actually very organized with money and savings, so I thought I’d write this post to help others who are not as disciplined and maybe give you some ideas about saving.
I’ve been married for a little over one year now and both me and my husband are very keen to save and invest our money in order to have a more comfortable life in the future, so it really helps that we are both on the same page on that. I’ve enumerated some tips and things that we’ve been doing throughout the months:

1- Calculate ALL your current expenses

Our first step was to calculate how much we actually NEED to spend, by need I mean: Rent, food expenses, money for the bus, money for lunch at work, etc. Basically, everything that you CAN’T change.
Also calculate how much you spend on clothes, food and drinks on nights out, holidays, etc. One way to have this info is to spend one month keeping track of everything you spend, no judgment, just keep all your receipts and add them up (by categories) at the end of the month or if it works best for you, download an app and record all that information there.
Once you have that info you’ll know how much of your money HAS to be spent (rent, for example) and how much you can cut on (Clothes, for example).
I always recommend people to maintain some disposable income available for non-fixed expenses; you want to still be able to go on a night out or on a nice weekend trip without touching your savings. Also, it would get old pretty quick to live without the things you find important.

2- Pay Yourself First

I know, it’s such a cliché, but it doesn’t mean it’s not true. YOU HAVE TO pay yourself first. Now that you know how much is going into saving monthly, set up an automatic debit that takes the money out of your account asap. If you are one of those people who are always taking money out of your savings, try to put your money somewhere it’s not easy to touch. Make it harder for you to use your savings. If you have calculated your expenses correctly, you will have enough money to go by.

3- Continue to keep track of your money

Remember what I told you to do on the first month? Yes, keep doing that.
When you realize how much money you are spending on things such as clothes or nights out, it will probably be easier to save on the next month.

4- Have a goal

Me and my husband actually just save for the sake of investing and having a more comfortable life in the future. For most of the people it works best if you have an objective for all that saving, maybe you want to do that big international trip or buy a house. It’s up to you. Having a clear objective that you can visualize might make it easier to say no when your friends ask you out for the 3rd day on a row and you’re totally broke.

5- Whatever is not an Asset is a Liability

So this is very simple, my husband and I don’t own anything that can add to our list of liabilities and it’s not extremely necessary. The most famous liability that I can think of is a car. Of course, we are lucky enough to live right in the center of a relatively small city that has quite good public transport, not everyone will have that option. The fact is that, owning a car in Ireland right now would simply mean a lot of expenses such as insurance, gas, parking, maintenance, etc. It just makes no sense but you would be surprised with the amount of people who don’t need it either but will buy a car just for the sake of having it.
If you can get rid of expenses such as this, I strongly recommend you to.

6- Have fun!

I know you have a goal and so do I, but don’t forget to leave some money on the side to enjoy yourself and have some fun, after all, it’s not all just work.
In 2017 I got to visit the beautiful island of Malta and the amazing city of Rome (that’s a subject for another post).