Nobody is perfect with money! And for a long time, I was far from perfect at handling my finances. But in the past couple of years, I have made strides to reduce my spending and increase my savings! Read on to hear the top 5 mistakes I made on my the journey to get my finances sorted.
1. Getting into debt.
While I was in University studying for my masters, I got my first credit card. Inspired to build my credit rating, I was confident I could resist the temptation of my new shiny card. At the time, I was working, but just barely enough to cover my expenses. This was all made worse by the fact that I did not have an emergency fund. When the restaurant I worked at closed unexpectedly, I got behind on my bills. The comfort of having a credit card allowed me to push off my problem into the future. I can deal with it later! I thought.
By the time I started a full-time job, I had accumulated £3,000 in credit card debt. I was constantly stressed about this debt, which made it harder to tackle. If my friends invited me to go on a night out, I would either decline or suggest they come to my house instead. I was anxious to pay back my debt as soon as possible!
When I was finally working full time, I vowed I would be debt-free by the end of the year. On the first of each month, I paid £1,000 of the bill. In three months time, I had finally paid back my entire bill. Being debt free felt like walking on a cloud! Finally, I could buy the things I needed without feeling guilty about increasing the debt.
Moving ahead, I am going to do anything I can to avoid getting back into debt! Instead of spending on anything I want, I have made a habit of saving most of my earnings and occasionally splurging on a night out. Saving money is hard, but it is better than the stress of owing the bank.
2. Shopping in the sales
I used to love sifting through the sales racks. I would save vouchers for everything, and and plan the best times to go shopping for deals. Nothing felt better than finding a dress that was originally £150, but was reduced down to £25! I could save £125 if I got the dress!
But then I realised: I am only saving money if I needed the dress anyway. Sales are great if you can use them to save money on things you need. But if a deal causes you to buy something you otherwise would not have purchased, you are just spending money, not saving.
As much fun as it was, I had to say goodbye to sales shopping. Instead of browsing the sales, I started browsing my own closet and charity shops. Before going shopping, I intently look through my my wardrobe to discover what I truly need. I sometimes even wrote a grocery list for shopping!
Shopping more carefully has saved me tons of money. Since I avoid the sales racks, I buy only what I need and know I will use.
3. Too many takeaway’s
When I first moved to uni, I was unprepared to cook for myself. Accustomed to my mother’s delicious cooking, preparing meals seemed like a daunting task. Where do you even start?
Since I was too lazy to learn some simple recipes, I would often buy a pastry and coffee on my way to lectures. In addition, I would get takeaway about three nights each week. Not only was I wasting my money, I gained five kilos from eating so much junk food! Clearly, it was time for a change.
I started small, preparing a bowl of oats each morning instead of picking up a pastry. This saved me about £20 a week, which was fantastic. Inspired by the potential to save, I started incorporating new dishes into my repertoire. I loved cooking simple stir fries and soups, which can easily be frozen and eaten later.
It has been a couple of years since I graduated from university and I now love to cook new dishes. Instead of eating out, I enjoy the challenge of making something delicious to eat. Over the years, I have saved thousands of pounds by cooking instead of getting takeaway.
4. By-passing great job opportunities
When I first started looking for full-time work, I was overwhelmed by the process. It felt like every job required years of experience that I did not have. When I saw a vacancy with steep requirements, I would skip it and keep looking.
Since then, I have learned that employers are not always looking for candidates with the perfect resume. There are many ways to get a great position, and personality and perseverance count for a lot. If you do not have the exact qualifications, education and related experience can both work in your favour. Instead of thinking, I will never get this job, I started thinking, what is the harm in applying?
Adopting this new approach was largely about growing more confident. It is about remembering that I have a lot to offer in the workplace, and it is not the end of the world if I am not asked to interview for a role. If I had not adopted this new approach, I would not have my cool writing job! Dispelling limiting beliefs such as I am not good enough or I do not qualify has given me the confidence to find a job I enjoy.
5. Always buying in bulk
There is a common misconception that it is always cheapest to buy in bulk. When you buy your groceries, toiletries and paper goods in bulk, you usually pay a lower price per unit. In the past, I bought huge bottles of shampoo and huge packs of paper towels. Look at all the savings!
But since then, my habits have changed a lot. Instead of using paper towels to clean surfaces, I opt to use rags and cloth towels. Instead of using shampoo to wash my hair every night, I sometimes do an apple cider vinegar rinse. Reducing my consumption of paper products and toiletries has saved me a ton of money in the past year.
While buying goods in bulk can save money in the short term, it can also prevent you from finding creative ways to save. If I had continued buying shampoo in bulk, I would not have discovered how shiny my hair is after a vinegar rinse! Instead of finding the best deals on common goods, I now take the time to ask if I truly need the goods.