Stressed about savings

LegacyUser

Hi guys,

Not a life or death scenario, but over the last while I've realised that my budgeting skills are a bit poor and it's stressing me out a little.

Just a bit of background - I'm 26, female, single, living abroad for the last 18 months, before that I worked in a close to minimum wage job in Ireland, saved a few grand, most of which was blown on setting myself up over here.

Now, I work freelance in a job that's great from a career stance (looks excellent on the CV) and my gross PA is roughly $50k, net minus taxes etc is about $35k. Since starting work, and it took me about 8 months to work my way up to the rank I'm currently at in the work place, I've managed to save just over $5k, but it just seems like such a measly number that wouldn't go very far if push came to shove.

I didn't think this was too bad - until recently, massive cuts were made to the organisation I work for (it's a government-run organisation that has been cut by 10% right across the board), in the next few weeks we will learn about how this will impact on our team. Needless to say, there's a real chance my 'rainy day' could become a reality, and I'm living alone in a one-bed, have bills, groceries, daily expenses like the rest of us, and then things like weddings, flights home, etc to worry about. It's kind of scary.

I'm lucky in that I have no debt, sold my car on leaving and didn't buy a new one, don't even own a credit card etc...but I just feel as though I have very little to my name. I don't know the first thing about investing, bonds, etc - all a mystery to me - and I pay into a pension plan at work, but need to figure out how I get this money back when I leave - which I will, most likely within the year. That is of course something else to worry about - money to fund travel. It's doubtful I'd get very far on what I have right now.

I guess I'm just looking for some good old-fashioned advice on how I should tackle this. Should I pull out an excel sheet and just start crunching numbers? Start investing? Has anyone else manage to successfully bump up their savings with a bit of strategic money management? Any advice is appreciated.

niceoneted

I used to be thinking the way you are when I was about the same age.
The first thing I would suggest you do for about 1-3 months is start a spending diary. It means writing down everything you spend - be it 50c or $500. Then go back and evaluate what you have been spending your money on and is/are there things you can cut out.
Also look at household bills and how you can cut them.
Always shop with a list.
Don't impulse buy on clothes etc.
You can always work out a budget and say you are going to save x amount and then have it taken at source from your wages and your left to manage the rest.
What about an additional part time job to add to the savings in the short term?

LegacyUser

Don't bother with investing. Interest rates are so low, you will get virtually zero return.

All you need is enough cash to bridge the gap if you find yourself unemployed, that's all.

A few thousand is plenty.

Don't obsess over money...it comes and goes in everyone's lifetime....it is an energy to get by, but is meaningless on it's own.

Last tip: if you're running short, don't do the Irish thing of thinking I need more coming in....think I need less going out. This is easier to manage and 100% in your control.

LegacyUser

Thanks Niceoneted, all great suggestions.

I've actually doing as you've suggested as it is - I try to lodge $500 when I get paid every two weeks - so that's $1,000 a month - and just leave myself to fend for myself with what's remaining after that.

What I've found is a few unplanned events throw me and I end up withdrawing from my savings to cover - a spontaneous trip to a different city for example, or a plumber's invoice after the toilet broke down. The former is hardly a necessity - but the latter can't be prevented - and as it's very possible I won't be in this country by the time the year is out, travel is also a priority.

I think there's vast room for improvement groceries-wise though - I tend to shop hap-hazardly as I feel hungry as opposed to a weekly planned shop with a list and a set amount. Maybe I'll aim to fix thing as a step forward.

Things like weddings, plane flights though...expensive and if I want to have any level of social life or mental health, inevitable. How does someone fit all this in without it detracting from their savings?

The part-time job is just impossible, I work long hours in a very very high-stress environment which means my work-life balance is attrocious already. I barely have time for friends as it is.

I guess the groceries thing is the first step. I've also decided to quit the booze for the next while (which coincides with a new fitness plan) so that should save a bit on nights out.

Stavro Mueller

Definitely write down what you're spending your money on. I used to be like you too and discovered that what was eating into my money big time was food, drink and impulse buys like books, magazines CDs, DVDs etc. Taking more care to ensure there's food at home and in the office and cooking proper meals definitely helps. As does asking yourself do you really need such a thing and such a thing.

What's really eating into your finances though are those weddings. How many are you coming home for? To be honest, I don't see any easy solution to this. Make no bones about it, a wedding invitation is a bill. Don't come back for so many of these and see how things go re. your finances. Make more of an effort to meet your friends where you are. Surely the time off you're getting to go to weddings could be spent more wisely and more cheaply.