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How To Save Money: How I Saved My First £100K
What would it feel like to have £100,000 saved up?
For many, how to save money remains a challenge and £100k is seen as unimaginable especially with savings rates at all time lows.
I was pleased to learn recently that Jeni Crane (38) had hit this significant milestone.
She announced it on the Financial Independence London Facebook group and I invited her to share more.
You might recall Jeni had shared her story previously about how a health experiment led her to Financial Independence.
To me, she is a fantastic example of what one can achieve if they have a clearly defined goal and the right mindset.
The right mindset puts deferred gratification into action and activates the upside possibilities that come with choosing a simple life.
I hope you take away as much from this guest post as I have.
I’ll now hand over to Jeni as she shares her tips on how to save money to hit £100k savings.
Table of Contents
HOW TO SAVE MONEY
When I first started on my journey to Financial Independence (FI), £100k seemed like a lofty milestone on the way to, a frankly unfathomable goal, of my ultimate FIRE number.
Recently I hit that milestone and WOW, the supportive response that I received from the FI community was overwhelming.
Whilst it has been a long journey, I hadn’t fully appreciated the multiple baby steps which I had taken to get to this point and to really accelerate towards my goal.
Although I have been saving for my retirement since my first pension contribution at 23 years old, in truth my “journey to FI” only formally started 10 months ago.
Prior to that I didn’t even know about the concept of FI!
I’ve taken some time to reflect on the steps which have helped me towards FI.
Although I have quite some way to go, hitting £100k in savings makes this more real than ever before!
BEST WAYS TO SAVE MONEY
Below are the exact tips and hacks that have got me to where I am today with £100k saved:
It’s not until you declutter that you really see JUST how much “stuff” you have accumulated!
My mission to streamline initially started as a way to simplify life.
i.e. not needing to tidy as much and in an attempt to reduce the need for extra storage space for “stuff”.
Decluttering prevents you from buying more things, which you already have.
Especially if you employ the Marie Kondo (Author of Lifechanging Magic of Tidying Up) method- putting all things from one category in one place and starting your sorting and decluttering from there.
Most of us have tendencies to “repeat buy” certain things, whether it is toiletries, certain clothing, cleaning products or food.
It is surprising just how many duplicates you can find when you put all things of one category in one place.
This helped me to use up each item before needing to buy more and therefore saving money.
I watched The Minimalists Netflix film – they focus on living life with less.
This was both countercultural and inspirational.
In our society of consumerism, it was really exciting to see, albeit quite an extreme version, people selling everything.
Doing so released them from the trappings of consumer debt and enriched their lives through travel and experiences in the process.
Whilst I am not in anyway about to sell all of my stuff and live out of a rucksack – its changed my perspective considerably.
I used to get swept up in the latest crazes for clothes, tech etc.
Now I am perfectly content with what I have and have no desire to surround myself with material things to make me feel happy.
3. Make Do and Mend
When what I have eventually breaks or wears out I love to find a way to get it fixed.
Not so long ago we had a society which was proud to “make do and mend” and even more importantly people had the skills to fix things.
These days less and less people can sew.
It’s here that I admit that I am one of them however I am fortunate enough to have a very crafty mum who does all of my repairs.
However, I am acutely aware of the fact that I NEED to learn!
Frustratingly with many items, such as tech, it is often more expensive to fix them than replace.
That said I have found a local guy to fix my Dyson vacuum – 12 years old already…
and my Kenwood food processor – well over 20 years old, as well as give me another year’s use on a pretty old mobile phone.
So, the help is out there if you can find it and it is well worth sourcing to not only save money but also the environment.
4. Buying Second Hand
If all else fails and something must be bought, second hand is my preferred and usually my only method.
I’ve saved an absolute fortune on high ticket items like a mobile phone, high end sports leggings, trainers, headphones and dresses.
Simply by setting up a “watch list” on eBay and having a predetermined “top end” of my budget.
I always start looking long before I need an item so that I don’t fall prey to high prices due to urgency or demand.
I’ve bagged “as new” £120 trainers for £15, a dress worth £90 new for £20, and a £500 phone for £350 .
Facebook Marketplace has proven to be absolutely invaluable both for super cheap purchases and during the decluttering phase.
5. Knowing Your Numbers
After I read the book Your Money or Your Life I understood the need to know my numbers.
To truly know how much, I was being paid per hour, net of all expenses, how much my expenses were costing me and how to manage them.
Working out how much money I have earnt in my whole working life was an eye opener.
It helps to bring into focus the realisation that I could attract large amounts of money into my life.
Plus, It shone a light on the fact that I had earned a significant amount of money but didn’t have an awful lot to show for it.
I had to nail down regular expenses and maximise on savings available on these expenses.
Haggling with insurance and energy companies meant that I could ensure that I was getting the best deals available and not spending money unnecessarily.
6. Mortgage Overpayments
In truth this was one of my first forays into expenses management.
Wanting to be mortgage free as soon as possible was my driver from the moment I got the mortgage.
Having been consumer debt free for several years, this debt, albeit a legitimate non-consumer debt, felt uncomfortable all the same.
Since getting the mortgage I have paid the maximum overpayment amounts and have managed to reduce the term from 25 years to just 9.
The mortgage is our largest expense each month so once this is paid off, I can make larger investments into my Stocks and Shares ISA and SIPP.
Watch this video on how to pay off mortgage early to see the impact of mortgage overpayments:
7. Maxing Out My Current Account
Read any FI books and they will tell you that you need to have an emergency fund.
Whilst I do agree that liquidity in the face of emergency is important, for me it was more about the mindset than having the physical funds available.
Having that money immediately available meant that I was not acting with a scarcity mindset.
I.e. I could make sensible decisions about where I wanted to invest the money, which was in addition to my fund.
I found that having this money sat in my current account was best for me with a 5% interest rate on credit balances.
It made sense to leave it there rather than tie it up somewhere and with that kind of return, I found that hard to beat placing anywhere else.
A recent development in my FI journey is hacking, specifically travel hacking.
I took out an American Express Gold Card and have been putting my usual daily expenses on there and clearing it every month in full.
AMEX provide generous British Airways Air Miles for every pound spent.
So I am looking forward to using these for our annual holiday and saving on the airfare.
Related post: How To Travel Cheap On A Budget While On A Low Income
9. Cutting Expenses and Budgeting
Once I knew my numbers it empowered me to look for ways to get more for my money.
I started to shop in a local “low waste” shop and they order my staple foods for me in bulk, lentils, beans, nuts, seeds, tinned food, oats and cleaning products.
We now get our fruit and veg delivered to our door weekly from a local organic farm.
Buying food in this way helps to reduce those impulse purchases at the supermarket.
It also saves on time (travel to and from the supermarket and time doing the shopping) as well as fuel.
Check out this video on how to live well on £50/week food budget as a family of 4:
10. Side hustle
Although my business didn’t start out with the intention of being a side hustle, it developed through a passion for nutrition and helping people.
Inadvertently, it has been another key factor in my journey to reaching £100k.
I have been investing all income from the business into my savings for retirement and this has certainly proved to be a welcome boost.
11. Taking Back Control of My Pension & Savings
I used to think that you needed to have a Financial Advisor (FA) to have a personal pension.
Unfortunately, a few years ago I fell into the trap of letting a Financial Advisor open and run my pension pot.
Whilst I was still contributing to my company pension, I recognised that it was predominantly invested in UK Property.
So was both underperforming and not particularly diversified.
I asked the FA to set up the pension so I could make annual transfers in from my company pension.
However, I wasn’t aware that this was costing me a lot in fees to the FA every year, taken directly from my the sale of my investments.
Once I had mustered the knowledge to work out how much I was losing in fees each year, I had the confidence to open my own SIPP.
I have reaped the rewards as the fees now remain safely in my account and make a positive impact on growth of my pot, rather than my FA’s!
A couple of other areas I decided to invest in were a Lifetime ISA and a Stocks and Shares ISA.
All 3 of these accounts were only opened at the tail end of 2018.
I have found it incredibly motivational to see the impact that the government’s 25% LISA bonus makes to the balance and so have been motivated to fill this allowance for the year.
I’m doing this as soon as I can as I only have 2 years left to in which I am able to contribute until the cap at age 40.
Managing both my SIPP and ISA through Interactive Investor and Vanguard respectively has been beneficial to my increased contributions.
I am able to see the impact of the deposits pretty much instantly.
NEW content on Our YouTube Channel – How To Save Money – Our 60% Savings Rate:
The journey to £100k savings has been a mixture of a steep learning curve and a change of lifestyle.
Investing in my personal development and improving my mindset has played a huge role too.
One particularly important factor has been the focus on not just finding ways to save money but also increasing my income.
There is only so much one can save from the income they make.
To hit £100k+ faster, the focus has to be on making more money whilst living a simple life.
More than anything else, hitting this milestone has taught me that I really can achieve the goals that I put my mind to.
My financial independence has never felt so close and I’m excited about my next 100k milestone.
More on how to save money:
- 50+ Ways To Save Over £10,000 Every Year
- READER CASE STUDIES: 6-Figures and Struggling To Save Money
- Why Saving Money Should Be Prioritised Over Investing
- 10 Reasons Why People Spend More Than They Earn
What is your biggest struggle with how to save money? Which of these tips will you likely implement?
Do please share this post if you found it useful, and remember, in all things be thankful and Seek Joy.
Ben Jasri says
Thanks a lot for sharing these tips with us. Huge congrats!! I’m embarrassed to say that a lot of what you’ve done are things I could achieve if I had the willpower. Sadly I haven’t been able to save as I’d like but your story has definitely spurred me on.
How have you been able to stay saving consistently? Also, do you have a partner? Do they also have the same goal of financial independence as you do? I’d appreciate any insights on how you both agreed to pursue this one goal.
Inspiring story, Jen!! It made me smile reading it. I read both posts that you did. What a life journey you’ve had. 2 things occured to me as I read your story
1) how is your £100k split by account? What’s your split by ISA, LISA, SIPP? Also, i desperately want to start a side hustle n make more money. When did you start to see success in your side hustle? And when did you decide that this could now become a full time business? I.e. what convinced you? Also, were you working fulltime and had to leave your job to start the biz?
Looking forward to your reply.
Jeni Crane says
Hi Hannah, apologies for the delay in my reply – I hadn’t had a notification of your note! The split is very much weighted to my SIPP, then ISA, then a tiny amount in my LISA as the limit is £4k per year.
It took 2 years to really see my side hustle make good returns however now it is my full time job, 3 years in! What convinced me was my P&L and the fact that it gives me much more job satisfaction!
I was working fulltime and studied and built my business alongside it until it was viable as a full time job.
Jeni Crane says
Hi Ben, many thanks for your comment. I have found that my savings rate as a percentage of my talk ehome tends to go up and down. It depends on big expenses like car insurance and repairs, holidays etc and how much bonus I make each month. I have targeted myself on a minimum savings percentage and a stretch target. I put my savings away first and then have the rest of my wage left. At the end of the month if there is more available to save, I pop that away too.
I do have a partner, fortunately he was already not materialistic and already frugal. He has the same goal as me however he is a little older and has a much smaller pension pot so he is having to save a bit harder to make up for lost time. Fortunately the information I’ve been learning we have been able to implement for him too.
All the best of luck with your saving, it might seem like there are a lot of things to get to grips with but for me it was a very very gradual journey over about 4/5 years, but worth the slow pace for the learning opportunity. All the best, J
Jeni Crane says
Hi Hannah, thank you for your comment! My £100k is split, £87k in pension, £4k in ISA, £4k in Lisa and £5k emergency fund. I’m hoping to focus on my ISA and LISA now and just let the SIPP compound.
Regarding my side hustle, it is still very much part time. I work full time during the day as an employee then in the evenings and weekends on my side hustle. It’ll be a while before it is good to go as a full time endeavour but I know that it will.
I retrained whilst working full time, it was hard but worth it.
I hope that helps answer your questions, let me know if I can answer any more for you.
All the best with your side hustle!
Hi Jeni and Ken,
I’m feeling really inspired by the content over the last week especially the info about paying down your mortgage and saving your first 100k.
The thing for me is that I earn more than my partner and we also have different aims and he can’t see how getting rid our mortgage will give us freedom. So I have sent him this article and video Ken made to watch so that this weekend we plan how we can start over paying by small instalments and increase.
For me I really want to know my numbers, for example I have no idea what my pension is worth, I have several pensions of one to two years that likely need to be joined.
Also through reading your article I realised that I have a FA for an S&S ISA which I had since 2010 when I got my first real job and realised they have been taking 5% of my regular monthly investment. I am not sure why I never checked but now I feel more informed, I don’t regret having invested here as it allowed me to save a deposit for my flat but I realised I could have been much more savvy earlier.
Reading this blog and another blog by frugalwoods, I have already implemented the decluttering and mending but there is still so much further to go!
Side hustle for me would be great but I have no idea where to even start?!
Anyway thanks for giving me lots to think about and action.
Jeni Crane says
Amazing feedback Sang, thank you. It sounds like you are well on your way with pensions and savings started already! Definitely get your pensions amalgamated if you can (if they’re not Defined Benefit pensions) as I found this was hugely motivational to see, in one place, how much of a pot I had saved already, and therefore my saving potential!
I spent 6 years with my pension under that FA and when I started working out the fees he’d made from my investment I felt annoyed that I hadn’t seen this before, but we live and learn as you say. What happens at the time is meant to happen for that reason to teach us.
My husband had no idea about the benefits of paying the mortgage down early. It wasn’t until I explained to him about the reduction in years through over payments that this really piqued his interest. Our mortgage is our biggest outgoing by far and living mortgage free feels like it will be so freeing, less overheads = less stress as far as I’m concerned. The way I view it is as an investment as I know we will downsize at some point and will free up some equity.
My side hustle came out of my desire to help others, what really lights you up? Do you like crafts? Thriting? Fixing things? Even organising. Any of these can be built into a business. If you’re passionate as bout it, it doesn’t feel like work. I wish you all the best for your chat this weekend and for saving towards FI in the future. Thanks for commenting, Jeni
Great blog! I have just signed up for a Lifetime ISA, thanks to your blog post. Do you get a 25% interest every year? It’s not very clear on their website.
Jeni Crane says
Yes you do indeed, on the deposit for that year. Which is excellent
You can keep contributing to a LISA until the age of 50 and get the bonus.
40 is the max age you can open a LISA.
The Humble Penny says
Good point 🙂
Dutch van der Linde says
A friendly correction: there is an error in point 11.
“I have found it incredibly motivational to see the impact that the government’s 25% LISA bonus makes to the balance and so have been motivated to fill this allowance for the year.
I’m doing this as soon as I can as I only have 2 years left to in which I am able to contribute until the cap at age 40”
This is false.
While you cannot *open* a Lifetime ISA once you hit 40 years of age, if you have already got one, you can *contribute* to it until you are 50.
I think the author confused the age limit for opening a LISA with the age limit for contributing to an already-opened LISA.
The Humble Penny says
Thank you for sharing 🙂