Have you ever wished you had more money in your bank account? I assume pretty much anyone has!
From April to August 2020 for about 5 months, I hardly made any money as my self-employment suffered massively due to the Covid-19 pandemic. I had never been more concerned about my money. Without any planning, you were suddenly thrown into an empty hole.
Savings saved me
As much as I was furious about the government who didn’t give me any kind of support in the situation where they put my business completely on hold, I appreciated my savings that existed in my bank account. Thanks to them, I didn’t need to actually go hungry nor worried about loosing the roof of SW1 postcode. Savings saved me.
Not only that, I am in the process of buying my first property now taking advantage of the stamp duty holiday. Although I am doing it with my finance-background boyfriend, let me say this, I am the one who is putting down majority of the deposit!
I’m not a city worker. I don’t make as much money as some of you do in the financial institutes. Many of my British friends couldn’t comprehend how I saved up enough money to survive the crisis and keep my life on track.
Britain’s low saving rate
According to the 2019 OECD data, in Sweden and Germany, more than 10% of disposable household income goes to savings, in the UK only 0.37% is the saving. Not in the recent economy, but when I was living in Japan in early naughties, the saving rate was near 10%. I am probably inherited the good old Japan’s saving habits.
Unemployment rate is now 4.8% in the UK. You hear many people struggle to make ends meet. It is very important to have some security money saved up somewhere, and it has to be a reasonable sum.
How I do it?
I never go through my bills and ledgers to make calculation apart from once in a year necessarily for my tax return. But as being enquired by many friends who don’t believe it is possible to save, I analysed my habits to identify the things that helped me save.
Some argued that I saved money because I always made boys pay the dating bills! I think it is an insult, but there is a gender pay gap over 15%, so girls could claim at least 15% discount on dating bills.
Well, a joke aside, here are the genuine tips.
Be a minimalist
Being a minimalist always helps. Every time I open a box of my online purchase, I ask myself, ‘Does this spark a job?’ and ‘Can you see yourself with it in 3 month time?.’ If there is a slightest doubt to your answer, I send it back without hesitation. The same principle applied to the old stuff. It it no longer sparks a joy, it’s time to sell it.
Being a minimalist doesn’t mean I never spend any money on anything. I do like finer things. For example, I own an expensive Cartier watch and Louis Vuitton bag. But they are timeless pieces. So they help compensate the relatively cheapish clothes and shoes, where I save more money.
Go 80% full
Previously I gave a talk on the Japanese proverb ‘Hara Hachi Bun Me‘ and some of you might remember it still. Basically for the happier and healthier life, try and eat only until you get 80% full rather than 100%.
This is certainly practical to our money saving strategy. Because, if you only eat 80% of what you are eating now, you are technically saving 20% of your food bill!
In addition, if you think you have nothing to eat in your fridge, don’t go to a shop straight away. Carefully go through the back of fridge and your cupboard, and find the things you forgot there and be creative. You can always make some bubble and squeak. Usually my unplanned concoction is surprisingly delicious.
Incorporate holiday in work
I incorporated fun activities in work. When I wanted to go on a Mediterranean holiday, I made a proposal to shoot a documentary about a lady who lives in Malta and got a commission. When I wanted to travel more around England, I got a magazine onboard to create a series of travel column.
My holiday bills are small because it’s often covered by my clients! And my boyfriend occasionally enjoys it as he joins me as a driver or simply visiting my exotic business trip for free accommodation.
You might think it’s a privilege of media worker or freelancer. I don’t think so. You can go on a conference which takes place in Barcelona or Berlin. You can relocate to Sydney office or Montreal office if you like. Or you can participate in a training that’s starting soon in NYC.
This could be a drastic saving opportunity.
Saving is not the only saving method
Although I hugely appreciate my savings, it feels like I am moving forward to the next stage of life in terms of money. Cash won’t always save us all. I need some capital to grow going forward. I am working on my pension scheme now alongside of purchase of a property.
But it has to start with some savings. If you don’t have much cash savings, I think it’s time to build one. Savings will save you in crisis, and it is somehow satisfying when you achieve it :)