Like most adults, the day I moved out of the family home, financially I was on my own.
Growing up, I was never too concerned about money; I understood that if I worked hard and saved my pocket money (and what I got from various part-time jobs) I could buy things. I even took on three jobs the summer before moving to London so that I could fund a portion of my first year's rent, stress-free. Money, and my future life, always felt exciting and empowering.
The thing I hadn't quite realised about London before moving here was that everything costs A LOT. You can go to a gig on a Monday night, a Michelin-starred restaurant on a Tuesday, an art exhibition on a Wednesday, and so on... but be warned, it'll cost you!
As I've never really been a lover of 'things', I've never considered myself materialistic. When it comes to trying new experiences and living life to the full however, every penny I earn seems to find its way into fuelling that particular addiction. Of course there's nothing wrong with that if you have the funds, but as a 20-something now living in the big smoke, I did not.
I would say yes to every invite or opportunity, without thinking whether I could afford to and, little by little, the credit card became a get-out-of-jail-free card. Again, that's fine if you can pay the balance off every month, but if like me you weren't planning your money wisely each month, it can soon begin to feel like you're just treading water.
Money, whether we like it or not, is a status symbol and carries a lot of shame. Comparing our lives to others who are 'doing better than us' can make us feel like failures, or push us into debt if we try to compete or fit in. Rather than enjoying the money we have, it's easy to fall into a negative spiral and end up resenting it and feeling life we never have enough.
Fortunately, there are ways to overcome money worries and with a handful changes (and mindset shifts) you can get back on track and maybe even thrive!
Here are my 5 tips to budget your way to a better life:
1. Write down your outgoings and create categories
I used to put aside money for rent and bills each month and then bundle what was left as 'spending money'. The problem with this approach is that it doesn't show you where the money is actually going. If you don't break down your money into little pots, you can't see how you are ploughing through it; the picture is skewed and you'll often overspend. It's also impossible to factor in the peaks and troughs of the year such as Christmas, or going on holiday because you are simply reacting each month, rather than planning out how you want to spend your hard-earned cash. The approach that has worked best for me is to look at my monthly spend holistically: what are non-negotiable costs? (rent, bills, food) what do you need to put aside each month? (holiday fund, life savings, Christmas gifts) what is left to blow in any way that makes you feel happy? (night's out, clothes, books) Obviously these categories / pots will differ depending on your life circumstances and priorities, and sometimes life will throw some unexpected costs your way (broken boiler anyone?!) But by taking the time to plan and budget your money each month, you'll avoid nasty surprises and feel more in control of your spending because you've given yourself a basic framework.
2. To become rich, you'll need to start out time poor
When money is no object, people tend to base their decisions on the best use of their time e.g eating out instead of cooking, or hiring a cleaner so that you have more time to spend time with your family or to hit the gym. Luxuries all come with a price tag. If however you are hard up at the moment and need to find some extra cash, a good place to start is finding ways to do things yourself: Bringing leftovers in for lunch instead of that £10-a-day Pret habit, cycling or walking instead of taking the train or bus, mending/upcycling your clothes instead of buying new ones, making home-made presents or cards instead of hitting the shops each time your friend has a birthday. All these may seem like small, insignificant changes, but they can really add up. You've just got to be willing to put in the effort and sacrifice some of your time as a result.
3. Just save something
When I first started saving, I would put away £100+ into an account each month and feel pretty smug that I was bossin' life and my future. The problem with that however, was that my first job in London was a waitress where I earned £7 per hour and used any tips I made to buy food. Putting such a large portion of my money (relative to my earnings) into savings each month ultimately meant I fell short and would have to take it back out again at the end of the month to avoid hitting my overdraft. What I should have done was put away what I could at the time e.g £10 per month, and patiently watch it flourish bit by bit. The lesson here is: don't judge yourself for how small and insignificant your saving may seem at the time, be proud that you are taking control of what you can and creating a better future for yourself.
*Oh, and for the love of God, as soon as you start earning get yourself a damn pension! Most companies offer this as standard (you pay a bit in each month, they pay a bit in each month) but if they don't, consider starting your own account and putting aside anything you can in each month for your future.
4. Enjoy every penny you have
The sure-fire way to start feeling good about money it to enjoy the hell out of every penny you have. If all you have is £5 after all the bills are taken care of, get yourself down to a coffee shop and sit there for hours savouring every last drop of that fancy flat white, or buy a book you've always wanted and read it cover to cover in one sitting. Yes, it can be frustrating when you see people out every night, living their best lives, when you're eating beans on toast in your PJs, but happiness and life satisfaction really do fall down to perspective, having gratitude for what you do have and focusing your energy on the special moments that make you happy. There's also the whole 'Law of Attraction' idea, so you really can't go wrong by being grateful for the money you do have.
5. Get yourself a passive income stream
I'll admit right here, right now, that I'm no expert on this and can only speak from my personal experience. Passive income is essentially getting money for doing nothing, although you did have to do something early on in the process. For me, as a musician, this means earning money from songs I wrote 6 years ago because someone has used them on a playlist or in an ad campaign and as a result, I receive a royalty cheque for that privilege. 6 years ago, it would have cost me the price of a studio, a mix engineer and various other expenses to make that song, but now those are paid off, any money I make from a song being used is solid gold profit - yes please! This type of income spans many sectors and will of course be unique to your life / skill set, but it's 100% worth a Google to see if there's a way you could be cashing in, whilst doing very little in your own life.
Let's face it, there's nothing sexy about budgets and having to say no to the things you'd like to do (FOMO) but like anything in life, with a bit of effort, and a few habit tweaks you can get yourself to a place where money does make you happy and life feels that little easier.
I wish you all the luck in the world x