How I managed to save enough money for down payment
It’s obvious that in order to save decent amount of money you need to have a decent source of income (or several sources). Still, saving money is quite hard for many people. Income increase often correlates with spending increase, and the sad truth is that most of the grown-ups have a very small or no savings at all (https://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-americans-dont-have-enough-savings-to-cover-a-500-emergency).
Goal-setting is the key here. I had a clear goal to save enough money for down payment for my apartment so I had a specific sum in my head that I wanted to save during N months (from the saving to the buying date). Having this number and having this deadline helped me to figure out how much money I needed to save every month as well as it helped to control any impulse purchases. The next step was to create a budget in Google Sheets. My budget varies a lot from month to month as my income and expenditures varies a lot too. I divide my expenditures into categories: fixed (apartment-rent, payment of my student loan, gym membership), groceries, restaurants/cafe visits, transport, clothes, makeup and beauty products, gifts, savings etc. I budget for expenditures like an annual public transport ticket and shopping for Christmas gifts. I create an extra sheet for both my regular and additional income, which can include vacation pay, yearly bonus, tax money return or money I make from selling my stuff.
I visualise my monthly expenditures categories in a pie chart. By this I can than see which share of the pie can be reduced and how much I money I put into the savings account compared to the total amount spent. This helps me to stay dedicated to continue to save money.
I also archive another goals that I set for myself: 1) I reduce amount of things that I possess and 2) I have more environmental-friendly lifestyle.
Where I save:
- I don’t have a car mostly because public transport in Oslo is very convenient. I buy train tickets when I visit my friends and family and try to take a walk as much as I can. I do the same when I travel — I hike or use public transport
- I almost never use taxi, and when I do I try to only use Über
- Alcohol or sigaretts. I simply cut off this expense because: 1) I don’t really like alcohol’s taste and never tried to smoke 2) It’s bad for your health 3) It’s very expensive :)
Where I spend, but not much:
- I’ve started to buy second-hand clothes, but mostly from high-quality brands. This happened mostly environmental reason (see “True cost”), but I also found out that I can spend 1/2 to 1/5 for the new price for an item that feels and looks as new
- The same goes for the furniture/home decor. I try to buy either second-hand or on sales
- I started to plan my meals, but there is a long way to go :)
- I go to the restaurants and visit coffee shops occasionally, once or twice a week
- Cheap gym-membership which my company pays for, and where I don’t have group hours
- Apps and subscriptions. I pay for Audible($15/month), Todoist($32/year), Spotify ($10/month or $15/month for several family members use it), Netflix and HBO ($10 and $15 which I split with my bf) and Forest (best ever $1 purchase)
Where I spend more:
- Travelling to the foreign countries
- I occasionally would pay a full price for a high-quality base clothes if I think it’s going to be a good investment
- I buy gifts quite often, but with planning this type of spending can get cheaper (e.g. not a day before Christmas eve, but check sales on the Internett)
- Makeup and beauty products. I justify spending money on makeup and beauty because it is a hobby of mine. This category is not that environmental-friendly though. Still, in order to control this expenditure I budget it in advance :P
- Good hair dresser
Other saving (and environmental-friendly) tips:
- Swap books and clothes with your friends
- Use your local library
- Invite friends on food parties
- Use credit cards only if you have good control on you budget. Credit cards can save you money in form of shopping or travelling bonuses but you do risk to end up in debt if you won’t pay money back by the deadline
- Use coupons and saving cards on things you buy regularly (movie tickets, concert tickets, food stores etc)
- Sign on newsletters to check on sales
