How I saved £50000 ($85000) in 3.5 years
How I saved £50000 ($85000) in 3.5 years
Back in 2009 I was broke… really broke. I’d just finished traveling for 15 months and returned back to my hometown almost penniless and soon to be homeless. My parents had retired early to the south of France while I was away and they gave me a month of free accommodation before the house was sold. I had to act, fast.
1. I got a job
After uploading my CV to every job site I could think of and numerous applications, I was contacted by the HR department of a large company looking for new graduates to work on a short-term contract. It was only for 7 months, the pay was peanuts and it was in I.T. (I had a business degree). The HR lady assured me that my lack of experience didn’t matter, they wanted enthusiasm and the willingness to learn.
And so I started work. My first real 9-5 job and the truth was: I loved it. I worked hard, learnt everything I could and at the end of the 7 months was offered a permanent contract with a 100% pay rise. My salary literally doubled overnight.
2. I avoided spending
Living as a student and then on a tiny salary taught me that it was possible to not only survive; but also enjoy life whilst spending very little. I didn’t have a car, expensive mobile phone or take luxury holidays. Instead I walked/biked everywhere, spoke to people in person and spent my holidays visiting friends and family.
By the time I received my first pay rise, I was so used to spending little that it was almost inconceivable to go out and blow the new cash on expensive phone contracts or a gas guzzling car! I was still sharing a house with a couple of friends and walking to work every day.
3. I saved
Even before getting my pay rise, I was saving money. For the first time in my life I had a steady stream of money arriving into the bank every month and this allowed me to plan accordingly. When my salary doubled I was able to put every pound of that right into the savings account as well. Because I had built up this cash buffer early, any unexpected expenses could be easily covered without having to borrow money and paying interest to anyone.
Just over 3 years later I’d saved £50,000 ($85,000) and was ready to buy a house, start investing and working towards Early Retirement.
I’ll go into more detail on each of the 3 points above. It doesn’t matter if you already have a load of debt or are on a low salary. By implementing practical changes in your life and working towards your own financial goals you can reach your own achievements.
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4 thoughts on “How I saved £50000 ($85000) in 3.5 years”
Wow, that is very impressive! I can’t wait to read some of your ideas.
Thanks Ginger! It was alot of hard work at the start but once I’d invested the time in the beginning to grow my skills, the rest came easily. Avoiding lifestyle inflation really helped and meant that everything from the pay rise could go straight into the savings!
I love the ambition and single-minded purpose of some of you guys at the start of you’re (hopefully shorted) careers. I applied my youthful single mindedness to a combination of hedonism and trying to make a great audio amp – such dissipation. Your achievement is great, and I look forward to seeing how it pans out!
I think there’s a thread running through some of the PF universe that you get a long way ahead by learning one basic thing as a child from your parents –
Don’t spend more than you earn on wasting assets
It’s a shame so few get that message, and have to shovel their way painstakingly out of a debt hole when the eureka moment arrives.
All the best for your journey!
Thank you Ermine. Im certainly glad that I was taught the value of debt avoidance from a young age and its easy to see the joys it can lead to as I look over at my parents having retired in their 40s to the south of France.
There is a great TED talk currently being discussed over in the MMM forums relating to how the actions you take in your 20s can have an exponential impact on your later life. While all is not lost if you enter the 30s with some debt, it certainly helps to form the good habits early. Its not too long and worth a look.
I suspect it may be harder than ever for the message to get across to youngsters these days with the payday loans literally a few taps away. It’s a hard temptation to resist when everyone around you is yelling YOLO..