Maybe you have been struggling to get out of debt for a while. Perhaps you have been living month to month, dreaming of the moment when you have some spare cash. Now the moment has arrived: you have finally saved £1,000! Now is the perfect time to translate your cash into more savings, find a safe way to store your money and plan your future saving strategy.
Translate your cash into further savings
When I make a budget, the first thing I consider is how to cut my expenses. But not all purchases are a waste of money; in fact many small purchases can help you stretch your £1,000. By making small investments in yourself, you will be able to save more money in the long term. Here are some ways to spend a little money now, and save a lot later.
Upgrade your kitchen. Having the means to make the food and drink you love may encourage you to eat in. Eating out can take a toll on your wallet, and cooking in is usually much yummier! Invest in the things you need, like some nice spices, a coffee maker and a tea kettle.
Cooking in is also a great way to explore your preferences. If you enjoy breakfast smoothies, get a high-speed blender that will make breakfast quick and easy! If you love burgers, try making them yourself rather than buying them pre-made. Want to save even more on food?
Buy a sewing kit. According to Business Matters magazine, Brits throw out an average of £12.5 billion of wearable clothing each year. Not only is this an environmental disaster, it is also a cash waster! By learning basic sewing, you can double or triple the life of your garments. Save clothes from the bin, and save your wallet too.
Are you feeling more adventurous? Try transforming old garments into new things. You can find thousands of cool DIY projects online. Exercise your creativity without breaking the bank. Check out some DIY ideas here.
Invest in some tech protection. Screen protectors, laptop cooling pads and other objects may feel unnecessary– until disaster strikes! A high quality screen protector has probably saved me hundreds of pounds over the past couple of years. Spend some money now to keep your tech in tip-top shape. Trust me, you will not regret these purchases!
Turn down the heat. Do you leave the heat blasting in the winter? This behaviour can waste hundreds of pounds a year, and harm the environment. Investing in a programmable thermostat will pay for itself almost immediately. You can program the heat to turn down when you go to work and warm up again before you return. Additionally, lower the temperature while you are snuggled up in bed. Since you are under the duvet, you will not notice the several degree difference. Learn more about conserving heat in the winter.
Invest in workout gear. Going to the gym is a nice way to stay motivated and healthy. But too often, our gym attendance does not justify the price. Take the time to realistically assess how much the gym is costing you. If your membership is £100 a month and you exercise twice, you are spending £50 a session! This is an exorbitant price. If you make good use of your gym membership, the value is much better. Instead of investing in a gym membership, pick up a yoga mat and some free weights. This may cost you about £100, which will last you a long time and allow you to work out in your home.
Update your car. Change the air filter in your car to increase efficiency. By switching the filter regularly, you can save up to 14% on petrol costs each year. This is a £20 purchase that will pay for itself in the first month of use!
How to make the most of your first £1,000
Now that you have your first £1,000, you may be wondering– where should I keep my money?
First things first, you need a safety net. Experts recommend that you have between 3 and 6 months of living expenses saved up for a challenging financial time. If your job is secure, your safety net can be on the smaller side. If your job is riskier, such as if you work on commission, freelance or are an entrepreneur, you should have a larger safety net. Safety nets are critical to your economic, physical and psychological well being. Nothing is certain, and changing circumstances may reduce your income. Be prepared for changes by setting money aside for a rainy day.
This fund can help ease psychological pressures. Stress and anxiety are increasing medical issues in today’s fast-speed economy. Studies show that having an emergency fund eases psychological stress, allowing savers to live a healthier life.
A second great way to use your £1,000 is to invest in your retirement fund. The best time to start saving for retirement is now! The UK already takes a percentage of your income for retirement, but you can opt in to save more. This money is not taxed, so putting more funds into your future will save you money in the long run.
What about investing money?
Since you have successfully saved your first £1,000, you may be interested in investing. Investing is a great tool because it allows you to earn passive income and improve your position. In 2019, there are lots of platforms that will allow you to invest small sums. This will allow you to get started, without risking too much from the start. Check out pages such as WealthSimple, Degiro, and Interactive Investors.
Though there are lots of opportunities to make money in the stock market, there are many other ways to invest. Investing simply refers to any money or time you spend now in order to reap benefits later. Consider what makes good financial sense for you. Investing can mean buying a house or car, or investing in a course that will teach you a marketable skill. If you need better transportation to get to work, purchasing a car could the best investment you can make.