I’ve already mentioned how I started this journey a while back, but due to some complications had to hand over most of my savings to my current landlord. Not in a terrible way. I’m glad it’s lowered my monthly expenses, but I’m still £7,500 down. Anyway, this post isn’t about that.
This is the first post I’ve done delving into my current savings situation. You’ve seen how much I earn, how much I waste, and how much I have to spend every month to live. The big question is how much can I save? After all, the purpose of this blog is to document how I’m managing to save enough money to buy a house.
I’m not starting from nothing. Even though it feels like that after that huge chunk came out. I had over £10,000 and was well on my way to my goal before I moved into this unfurnished flat in January. Now I have a combined total of £3,206.13*. The asterisk will follow later in the post. But anyway, not a bad start for a waitress in her early twenties.
I have two savings accounts, both with ridiculously low interest rates. I don’t really think about interest too much. It’s just somewhere for me to put money and not spend it. The reason I have two is because my bank puts limits on some of their savings accounts, meaning I can’t save as much money as I’d like to. So I have a monthly savings account, and just an uncapped easy savings account.
My Easy Saver account is my main savings account, as it is the one I transfer most of my money into. I pay myself first. So every payday I transfer all my salary (except £40 which is for spending) into this account. The interest rate is very low, at only 0.2%, but this account is uncapped and I can put as much money in there as I want. Currently, my Easy Saver account holds £1,456.12.
My Monthly Saver is the better account, with an interest rate of 2%. However, Lloyds Bank caps the amount you can transfer into that account to £250 a month. Currently, this account holds £1,750 because I’ve had the account for seven months. Trust me, it would be much more if I was allowed.
What I tend to do is use my Easy Saver as my main savings account, then once a month (just whenever I remember) transfer £250 from there into my Monthly Saver. I do this purely to reap the benefits of that extra 1.8% interest. Interest rates are shocking and it’s almost pointless trying to save money anymore. That’s not going to stop me though.
Now it’s time to address the asterisk. I, at the ripe old age of 24, have a penny jar. Well it’s more of a notes tin than a penny jar, but for the purpose of this post we’ll call in a penny jar. It’s one of those tins that you can only open with a tin opener, like this one from Amazon. I have always had penny jars though. I’m obsessed with them. If you live in a house share, get a penny jar and put it in your kitchen. Everyone will put their money in there and you’ll end up with £100 by the end of the year.
I’ve stepped up my penny jar game though, and invested £2 in my tin. Now this really works for me because I can’t use tin openers. Even though everyday I’m tempted to get into it I physically can’t. This is painful because I love tuna, and now that I live alone I have no one to open tins for me. Anyway, I’ve recruited my boyfriend to be the designated tin opener when the time comes. We’ve decided it will be the 8th of October. That date will be 200 days since I started the jar, and I’m too excited to wait a year. I don’t even know if I’ll be able to wait five months. But in all seriousness, my boyfriend has booked a day off work to come and open my tin. That’s because we both know how much money I’m saving in there.
What Goes in There?
As you may or may not know, I’m a waitress. So as well as the salary I earn, I get tips. These tips are given to me cash in hand at the end of every shift I work. And because I literally live and die for this saving money malarky I put all those tips in my penny jar. I’m going to do a blog post soon about my tips and how much I get, but I like the fact that I’ve lost count and have no idea how much is in there.
Honestly, an average nights tips can be anywhere between £15 and £35. And I get that five times a week. Worst case scenario, after 200 days I’ll have £2,142. Best case: £5,000. I don’t just put tips in there though, basically any cash I have. So if I buy something on my card that someone gives me money back for, it goes in the jar. I have no idea how much is currently in there, hence the asterisk when I calculated my total savings earlier.
Missed Savings Opportunities
I wasn’t expecting to be this far from my goal, this far into my journey. In fact, I missed a lot of opportunities earlier on because I thought I’d be here by now. For instance, I could have invested money into a bond. I was put off of bonds by the three year time scale, because I thought I’d have my house by then. Clearly, I am kicking myself now. Also, I have never put any money into a first time buyers ISA. There’s a few reasons behind this, and I stand by my decision. However, if I had known how long it was going to take I probably would have signed up for one at the beginning.
My Current Savings Situation: Summary
So there it is, my current situation. How much I save depends on the type of property I want to buy, and the cost of that property. Typically, you have to put down 10% of the property value. However, I don’t think I’ll be able to get a mortgage that big, so am looking to save more than that. This is the first savings post. The ‘starting from nothing’ as it were. I know £3,200 isn’t nothing, but it’s very insignificant in comparison to how much I need to save. I’m hoping that in future updates you’ll be able to watch my savings grow with me, and be involved with the whole process.