Hey there! My name is Idriss and this is my first blog post on Cheeky Hippies. I am so excited to be sharing my knowledge with you guys. On this blog, I will be mostly sharing tips about budgeting, personal finances and other awesome things. Today I will be sharing with you how I effortlessly saved 2600$ in just 6 months.
It is I !
For those of you who don’t know me, I am the content creator behind Broke Foodies, a food blog that is dedicated to delicious, reasonably healthy and inexpensive recipes.
I am and have always been a numbers guy – for that reason I pursued studies in both Economics and Finance. However, like a lot of people I was good at giving advice but not at following it – I, too, have struggled with my finances. Saving money seemed like a fantasy to me. Then something changed…
One thing I can tell you with certainty is this: if you figure out money, make sense of it and make it available to you, your life will become so much easier. No matter how hard it seems, you must find a way to make the best out of your income.
While saying that seems obvious, there is the classic mindfuck obstacle that gets in the way of saving… My wife thinks this way and I’m sure you too have had this thought, the whole “Hey man! I’ve got bills! After all my payments are made I’m left with nothing, how am I supposed to save anything?”
Trust me, I get it. I am a full-time student with a part time job. I’m not rolling in cash and I, too, have bills that roll in every month.
Interestingly enough, after working hard to phase out the bill before savings mentality, I now have more money saved up than I did when I had a full time job and no school, earning 3 times what I am now. It’s not only about your mindset and priorities, it’s also about what you do with your money. With confidence, I can tell you:
It’s not about how much you earn, but how much you spend.
Back then, I had a decent salary with benefits and I was still broke, living from pay-cheque to pay-cheque. So, what happened?
As a general rule, when people earn more money, they also spend more (sometimes without noticing it) because they feel as though it’s no big deal and that they can afford it now. A little splurge here and there, expensive new habits, and before you know it, you are living pay to pay. You come to expect that money and lifestyle, and the cycle repeats itself without a second thought.
I remember wondering how I got there, every 3 to 4 days before each pay. Like clockwork, I sat there looking at my bank account perplexed, remembering “I had plenty of money just over a week ago!”
Now, here I am – less time to work and more savings – 2600$ in 6 months.
As I quit my job and decided to go back to school, my state of mind completely changed. I knew that I was going to have less money on hand and that finding a part time job with a decent salary was going to be a challenge. Luckily enough, I was able to land one. With a salary coming in for both me and my wife (who also goes to school and works part time) saving money became a lot easier. With a lower salary I started paying attention to each dollar I spent. Here is what I noticed:
Coffee: Indulging in shitty coffee almost every work day, at 3.5$ a pop.
It didn’t feel like much when I was paying for it. Coffee before work felt like a reward for getting out of bed and going downtown; I thought, I like coffee, how can 3.5$ possibly make any difference in my finances?
Food: Not groceries, but fast food & eating out.
At work? At school? You bet! I was buying lunch instead of packing one. That alone was costing me about 10$ a pop and it was happening at least four times a week. Seems harmless enough perhaps, but get this, I was also buying breakfast. That’s another 4-6$ another 4-5 times a week …
I used to wake very early and did not have the will power to make myself breakfast. I was basically a zombie in the morning and all my brain was saying was: ‘Coffee! Food!’ That added 4-6$ being spent on food I could have made at home for a fraction of the cost, and that was happening at least twice a week.
All that might not seem like much, but I promise you this, it makes a huge difference. The problem with this kind of spending is that first of all, we tend to do it to save ourselves time and as a reward, but it hardly does that at all.
Waking up just 10 minutes earlier can be enough to make breakfast, depending, and your taste buds, stomach and wallet will thank you. Same thing for coffee.
I don’t know what your coffee situation is like in the city you live, but here in Montreal, getting a coffee outside is a gamble. It’s either overpriced and shitty, cheap and shitty, or super overpriced and not worth it. Either way, not worth it for a caffeine fix.
What if I told you that it is better to invest in a coffee mug, amazing beans, and a wonderful French Press? Doesn’t seem so bad anymore, does it? And you’ll save money long-term!
I took the liberty of crunching some numbers for you:
|Cost per week||Cost per 6 Months|
|Coffee||4.5 x 5 = 22.5 $||22.5 x 26 weeks (6 months) = 585 $|
|Breakfast||5 x 4 = 20 $||20 x 26 weeks (6 months) = 520 $|
|Lunch||10 x 4 = 40 $||40 x 26 weeks (6 months) = 1040 $|
|Total||82.5 $||2145 $|
Yes! It’s outrageous how did “little” expenses add up over the months.
By breaking down your excess spending habits, replacing and limiting them, you’ll save more money, develop healthier habits and naturally follow your priorities. This brings us to my next saving trick: saving weekly.
Why you should break down your savings plan into weekly transfers.
When you know how much exactly you spend on these miscellaneous/convenient expenses, it’s much easier for you to make a savings plan. All these expenses can be cut out if you make the right adjustments:
Make your own coffee and put it in your travel mug.
Make your own lunches and breakfasts. To do so, it’s better if you do some meal planning during the weekends. To get some great ideas about easy affordable meals I encourage you to visit: Brokefoodies.com We have tons of delicious low-budget recipes over there, all available to you for free.
It seems like a ‘Duh’ moment, but it does not diminish its significance. Every time you make something yourself you are bringing yourself closer to that vacation you wanted to take, a down payment on a new place, new furniture – what ever you want!
With these simple adjustments you should be able to save somewhere close to 80$/week which should save you 2100$ in just 6 months!
82.5 $ x 26 weeks (6 months) = 2145$
I was already putting 40$ a week in my savings account, which added up to:
40$ x 26 weeks (6 months) = 1040$
1040$ + 1560$= 3185$ in just under 6 months. Luckily, you don’t have to put aside as much as I did, all you have to do is get as close as possible to 100$ per week and you will hit that target.
And that’s just me, if you have a life partner/spouse/wife/girlfriend who is earning an income and with whom you are sharing living expenses, she can pretty easily follow the same path and save another 2600$.
That’s 5200$ in just six months. That’s a decent vacation right there, a down payment on a car, a nice contribution to your retirement fund, or a good down payment for a car. This is just just what you can do in 6 months, cutting few basic miscellaneous fees.
The golden rule:
Instead of putting your money in a regular savings account, opt for a TFSA (Tax free savings account). Those types of accounts are harder to access. You usually would have to wait at least 24 business hours after a withdrawal request. This encourages you to keep your money saved up.
So here is what you can do:
Find out the weekly cost of your miscellaneous purchases (Coffee, snacks, lunch etc.)
If the cost is under 100$, I encourage you to put as much as you can to make it to 100$ a week.
Set up an automatic weekly transfer of 100$ to your savings account.
Opt for a TFSA over a simple savings account.
Pay yourself in 6 months’ time.
I hope you enjoyed reading this post, let me know what you think in the comment box below. In the meantime, thank you for reading and don’t forget to be awesome.