To ask how people built up savings of £5k to £15k?

[ThatOpenPoet]

For those who’ve managed to build up savings of around £5k, £10k, £15k - how did you actually do it in practice? Was it consistent monthly saving, cutting back, a one-off boost or a mix of things?

I would like to hear what realistically worked for people rather than just general advice.

Thank you.

ISA = consistent monthly savings
Premium Bonds = Lump sums either bonuses or occasionally inheritance

Also have a separate savings account that we pay into monthly to cover school fees. We try and pay a couple of years at a time so we don’t touch it as often.

We've resisted "lifestyle creep" as our income has gone up, and every time we got a pay rise we've just saved most of it (with the exception that we now allow ourselves occasional foreign holidays out of that money). I'm about to get another pay rise and plan to transfer that money to savings on payday. Last year we saved about £40k between us and it's likely to be similar, if not more, this year.

Aiming to have enough to retire in my early to mid 50s and spend my early retirement travelling (as I didn't travel much when younger).

Have you got a savings or share scheme at work? That can be good as deducted at source and then you cant touch for a few years

I started saving from the moment I took my first part time job during school holidays and weekends, probably aged around 13. I started off doing room cleans/bedding changes in a nearby guest house at weekends and school holidays, spent my wages every week (clothes, magazines, going out etc), but saved my tips in a post office savings account. A couple of years later, I started waitressing in a nearby restaurant a couple of evenings per week - again, spent my wages but saved my tips. My tip savings account was "untouchable" in my mind - I just enjoyed watching it grow by small amounts week by week, plus interest being added, and of course, it grew a lot more during Easter and Summer holidays with a lot more tips! I had a fair amount saved by the time I left school, probably several hundred pounds which was a lot back around 1980ish and equivalent to a few thousand in today's money.

I then got a full time job but it was menial/very low paid work, less than £1 per hour, but it was a training job and had good prospects, so that was fine. I kept my weekend cleaning/changing job and also a couple of nights waitressing. I "Lived" on the wage from the day job, but then saved all the weekend/evening wages along with the tips, so the savings account started growing a bit faster. Still religiously not making any withdrawals and watching it grow week by week, made better by relatively high interest in the 1980s!

Eventually, I worked my way up in the firm and could afford to stop doing the weekend/evening work which had become hard as I was also self studying accounting exams in the evenings and weekends. But as my wages were higher, I started spending half and saving half. Savings started to build up even faster. My being strict, I just "lived" within my means, just like I'd been doing when part time at school - I gave myself a fixed sum to live on and adjusted my spending accordingly which meant I adjusted by buying clothes some weeks but going out more other weeks, and having a meal out only every few weeks - all depending on what I wanted to buy/do week by week - if I wanted a "big ticket" purchase or evening out, I'd do/buy nothing else that week.

This was all before credit cards and store credit became a big thing, so to an extent it was easier to live within your means as the temptation to put stuff on credit wasn't as easy.

By the time I came to get married and buy a house, I had around £35k saved, accumulated over around 15 years of small but regular savings and self discipline not to withdraw anything.

Standing orders to savings accounts, ISA and premium bonds monthly and top those up with extra if my current account runs high at the end of the month and I don’t envisage any big bills coming up.

@HardFuckingBird

We've resisted "lifestyle creep"

I think that's the key really. Lifestyle creep is so easy a trap to fall into.

As others have said DD at beginning of month to savings. We have also recently bought a second hand EV which costs less than £10 a week to charge so I put the difference between that and what I was spending on fuel (approx £150 a month) into savings as well. Whenever I get any work expenses e.g lunch expenses as I was travelling for work I put that in (as I would have had to pay for lunch ordinarily) plus any refunds I receive (as I reason I was happy to spend the money originally) I don’t save enormous amounts but it’s more about getting into a mindset where you think about savings all through the month

Deducted from our pay before we see it means we have savings of around 80k.

But really it's earning more than your outgoings, there's no real secret to it

Have two current accounts

One where you have your wages paid in and you live out of

One where your bills come out of, every single direct debit and standing order needs to be on this account. Same amount going out every month

As soon as you get paid you transfer the "bills money" into the bills account

Sit down and work out how much you need per week to live, everything, food, petrol, an allowance for clothes etc etc etc. do this based on long term weekly living, make it an agreed set amount and stick to it. Revisit the amount every 6 months and adjust as life changes etc.

Take that weekly budget and work out every month how much that totals up to..... remember some months need 4x of the weekly allowance, some 5x. Anything over that amount put into a savings account

Do it at the start of the month and see it as an "expense" to be set aside, not at the end of the month as a hopeful surplus to save

For the money you've set aside for general living. Treat it as a weekly allowance, not a monthly allowance, spend it based on the pot you have per week, this way you don't overspend and if you do burn through the weekly money quickly you only have 5/6 days to the next week's pot. Yes, inevitably you may go a little over or under but this weekly budgeting mindset is so much easier than thinking of it in a monthly context. It's easy to be broke for 5 days, a lot, lots harder to be broke for 25 days waiting on the he next wage deposit.

Be really honest about how much you need per week, don't try and skrimp and underestimate, you'll only end up topping up from th growing savings pot

Good luck

I also regularly check my current account and keep round the spare pounds to put into savings. E.g if I have £573.46 in my current account I will move the £3.46 into my savings account leaving me with £570.

It is really surprising how much this adds up over time and also stops those little "frittering" type spends. Previously I was thinking nothing of going to Costa two or three times a week, nowadays I will put that £4.25 or whatever I would have spent on a coffee straight into my savings account. It becomes quite addictive seeing the savings going up.

Yes to earning more than outgoings, but a big part of that is controlling outgoings which is a lot easier with discipline and giving yourself a set amount to spend and a set amount to save, and sticking to the amount you've set yourself to save, i.e. the discipline. Scope creep is very real and it's too easy to spend all of your wage increase or windfall whereas if you set yourself limits/targets, you can control yourself better. Little and often is the answer, consistency is far better even if relatively small amounts as you're more likely to stick with it.

@GameOfJones

It becomes quite addictive seeing the savings going up.

It really does!!

As well as the "straight to savings" tactic, I've got 2 separate bank accounts that get a set amount each month on pay day. One is for treats - like a haircut or lunch out with a friend, and the other is for food. Once it's gone, no more until next payday. It stops top-up shops turning into £50 and any left over funds is put into short term savings for unexpected expenses (for instance the fridge packed up a couple of months ago so we dipped into it for a replacement).

Work out essential outgoings (house bills, house food, childcare, transport)

"Pay" yourself an allowance per month (we used to do 50 quid a week when we were saving hard, these days it's 80) for anything that isn't an essential outgoing - to cover eating out, gifts, socialising, hobbies, personal spends like clothes, make up etc

Put the rest not covered by the above in savings in a separate account

It helps that we both have v similar frugal attitudes. If one of us had an expensive hobby, drank a lot, bought lots of clothes etc it would be trickier.

Put a set amount away at payday (I used to save half my salary) sell things

For me, my most successful instance of saving was back in 2009 when I joined my then workplace’s Sharesave scheme. I put in £250 a month over 5 years (you could also opt for 3 years), and was guaranteed to walk away at the end of the term with at least the £15k I had saved. Otherwise, I could opt to use that £15k to buy shares and keep them or to buy shares and then sell them at the current market rate.

Come 2014, the share price had rose significantly vs the option price I had to purchase the shares. So I chose to buy the equivalent value of shares and then sell them and walked away with over £25k! This used this for my deposit for buying my first house, all the associated fees and costs and had some money left over for a few bits of furniture.

Having the money deducted ‘at source’ meant I never got to miss it, if that makes sense. Is there any kind of option like that for you?

What are your thoughts @ThatOpenPoet since you asked and you’ve had responses. ?

As others have said I will out savings away at the start of the month. We have a joint account for mortgage/bills/expenses. I pay that in the day I get paid. Whatever is left for myself after those two have left the account is my amount for the month.

I then divide what is left in my account by the number of days in a week and give myself a day rate. Anything I do not spend in that day rate I put into savings that day. If I overspend I just recalculate by using the number of days left in the month and then do the same with that day rate. It becomes easier to save chunks here and there doing that. I saved best part of £1k in a few months just from that

I use an app called Plum. I have the free version and it has various rules, mine takes money out of my bank after payday and elsewhere based on spending habits and what it thinks I’m
unlikely to spend. Sometimes I have to shuffle a little more back but it’s generally pretty good.

I have a rainy day fund and a present pocket on it.

By mentally not thinking that I can spend all of the pay cheque that lands in my bank account each month. Partly I'm lucky that I earn a reasonable wage, but there are various things I've gone without because I can only spend so much if I want to be able to save. But they key is nothing ever thinking that I have £1000, so I can spend £1000.

Consistent monthly savings, although I’ve just blown all my savings on a vehicle upgrade so now need to start again 🤣🤪

Consistency.

I started doing salary sacrifice from my paycheque to workplace credit union when I was only on £9k/year so £5/fortnight was all I could do…but that added up to Christmas presents from cash instead of needing loans and interest payments.

As my salary increased I could increase the amount - it went to the credit union before so got paid so quietly built.

And as I got a bit more /salary I increased my payments (I’d give myself a treat fortnight or two and then increase my payment) as I was managing on the previous level of pay.

Now, I do that and also have a monthly savings coming out as a standing order in the second half of the month (my bills tend to be the first half). I have an account I must lodge €100 monthly to but can lodge as much as €1,000. So I have a standing order for €300 and if I have more available, I do a regular transfer for a bit lore up towards the max. That really did help to build up some extra.

I am a real believer in “pay yourself first”, based on having a good budget covering the bills and knowing what I need to live on and still having some spare for fun or emergencies.

I put money to a savings account and investments on payday. Everytime I use my debit card, my bank automatically transfers a set amount to my piggy bank savings. Once the piggy bank is full, I add it to my investments.

I think it’s usually a mix of things rather than one big change. For some people (many), cutting back on everyday spending can make a surprisingly big difference.

Take smoking, for example. A pack of cigarettes is around £13 these days. If someone smokes a pack a day, that’s £13 × 365 = £4,745 a year, nearly £5,000 saved just from quitting.

Coffee is another example that will resonate with a lot of London commuters (myself included). A takeaway coffee is roughly £4 on average. To keep it simple let’s assume someone works 5days in the office. If you buy one every working day, assuming 228 working days a year after bank holidays and 25 days of annual leave, that’s £4 × 228 = £912 a year.

On their own, these amounts might not seem life-changing, but when you combine several habits like this smoking, daily coffees, meal deals, takeaways, subscriptions, and impulse purchases the savings can add up to thousands of pounds over a year.

Constant saving combined with a sense of realism about what i can afford on my income (lifestyle wise) if I want to save.