Leaving home is a massively exciting time. A life event. A rite of passage. The very first step on what will hopefully be a very long and enjoyable journey through independent adult life. However, the process of moving out can of course be just a little daunting at times, though. There’s absolutely no shame in admitting this. Moving house always rates highly in lists of stressful situations – and that applies to people who are veterans as well as first-timers.
The Secrets of Saving Money When You Leave Home
Life out there in the big bad world is going to be a lot of fun. But in order to get the most out of it, there is inevitably going to have to be some budgeting and general financial forethought. And while it would be nice to move out with a big pile of cash and no financial restrictions, the chances are that, like most of us, you’ll be moving out with a modest cash flow.
So, in order to help you get the most out of that modest cash flow, I’ve written this post in the hopes that I can help you save some cash during the weeks and months after moving out of the parental home. This post won’t make you rich or provide a magical snake-oil formula that makes currency rain down from the sky. But I hope that at the very least it highlights some of the danger points where we can find ourselves in a money-wasting zone, as well as some tips on how a prudent existence needn’t be a dull one.
Here our my Secrets of Saving Money When You Leave Home:
Repeat after me: it’s a learning process
There’s an old saying, and it goes like this – calm seas don’t make sailors. Experience is what shapes us. And life’s vicissitudes – be they financial, emotional, or whatever – are what give us our depth of character. All of which means that (despite our best intentions) there may be surprises or challenges along the way. We might even (whisper it softly) make mistakes.
Well, guess what? You’re only human. So by all means seek out and follow the best advice. But find the ability to forgive yourself if you don’t manage to be a paragon of financial virtue 100% of the time from day one.
Looking after your money, budgeting and saving is a learning process.
And none of us are above learning – no matter our level of experience.
Be prepared for contingencies – create an emergency fund
You never know what’s round the corner. You could meet the romantic partner of your dreams tomorrow, and suddenly need to buy some new clothes and pay for half (or all) of a meal at a fancy restaurant. A more prosaic scenario – you could lose your phone and need to purchase a new handset.
The simple fact is that the future is full of all this future stuff – none of which we can see yet but some of which will require expenditure. So get into the habit of having a lot of cash that is there simply for contingencies.
It is pretty astonishing how much money you can save from trading down. You do this by looking at all of your weekly or monthly purchases and then trying out cheaper versions of them. So if you always buy one brand of a product, try out a private label or non-brand version of the same. If it’s tolerable, stick with it. If it isn’t, go back to your usual brand.
With brand goods the marketing, advertising and package design can add quite significantly to the price. And also very often the difference between a branded product and a budget one are minimal – to the extent that if we were presented both products unwrapped, it would be nigh on impossible to tell the difference.
Saving on banking, loans, utilities, and other necessities
It pays to shop around with banking and utilities just as much as it does with any other products. Maybe not as fun, but just as potentially useful in terms of keeping your expenditure lean and mean. Money saving check sites are all good and well, but they just tell you who provide the cheapest service, not the best. Personally, I like to seek out those who have won awards for their services. Organizations such as Moneyfacts (my go to site for such information) do the research for you, so you don’t have to. They do tend to pick out the best of the best when it comes to such matters, and they even hand out badges of honor to the winners of their awards, for example. So, keep an eye out for the providers who brandish these badges oh so proudly and find out as much as you can about any financial products you sign up for, well in advance of signing up, of course.
Understand shopper psychology
I remember being in the gleaming, futuristic computer and electrical floor of a department store more or less on the day a new version of a famous MP3 player was released.
Oh my, it looked so good. I mean like, wow!
My knees began to tremble. Suddenly my belly became a chasm, empty and yawning except for a flash of pure electricity bouncing around inside it like a firework.
I picked the thing up. The beautiful, perfect display model. Its OLED screen seemed to beam back at me with nothing but appeal radiating from every pixel.
I began to salivate.
I could feel my bank card starting itch.
And then something happened that I didn’t expect. Some voice, deep within me, said ‘Hey! You already have an MP3 player. You don’t need a new one yet. You can buy this one in the future when you do need one”.
The voice was right. I breathed deeply, counted to ten, and walked slowly backwards away from the MP3 player. Finding a zone of safety near a display of steam kettles, I closed my eyes briefly, and re-focused myself. Then I walked briskly out of the store, welcoming the grey of the late afternoon sky as I made my escape through the automated revolving door.
Have you ever been in a situation where it almost feels like a supernatural force is making you buy stuff? If you have, you are far from alone. In fact, there is even a recognized health condition known as compulsive buying disorder, which is believed to affect over 1 in 20 of the US population.
Now, while my experience with the MP3 player could hardly be classified as a compulsive buying disorder episode, it was very much a visceral thing. I wanted that MP3 player, soooo badly. But the difference is that I was able to resist its charms until months later when, with a small windfall, I was able to purchase it. And a great purchase it was too – I still use it every day!
The simple fact of the matter is that even for the majority of us who don’t have a buying disorder, temptation abounds. Of course it does. When you go to the supermarket, take a look at any item – be it a plastic bottle of lavatory cleaner or a can of beans. The product has been designed to look as appealing as possible by its manufacturer. It’s been placed by the store in the most appropriate place for it to receive your attention. It may even be on offer! Suddenly it becomes apparent that your purchase of the item is encouraged by these factors. So if you’re not looking to spend money, the best way is to avoid temptation altogether. It’s simply a fact that a trip to the supermarket often seems to include a few unplanned purchases. We’re hunter-gatherers. Of course we’re gonna go for a few extras when we’re out in the ultra-modern foraging space the modern retail space provides.
Control your Finances
One last thing.
One of the most amazing things I’ve found is that if you keep a daily journal of your expenses, you get a sense of control over your finances that really makes a difference. By jotting down every single purchase, you can see starkly on the page each daily expenditure and how it compares with other days. For those of you who are a bit more tech savvy, there a lot of great budgeting apps out there. I would recommend TOSHL if you prefer tapping than jotting.
I don’t know if journalizing my expenditure sends a message to the subconscious or what, but it seems to work wonders. I think it may be because when you can see everything on the page, there’s less likelihood of getting an ostrich mentality in times when the expenditure is more than it should be. You make the necessary adjustments as you go, and all is calm.
This post was guest-written by Chris from Spend It Like Beckham.
My name is Chris and I write about all things financial in the world of football and everyday life. Money saving advice is always useful, no matter who you are, so I try to communicate my life experiences to help those who need it. You can find me over at Spend It Like Beckham or you can follow me on Twitter @officialsilb.