Frostbite is never fun. Even if you are saving a bit of money
My daily commute to and from work over the last couple of days has not been the best. It’s been raining for two days straight and it feels well and truly like mid-winter in the UK. It’s been raining so much my commute now includes navigating and crossing what looks to be a river.
On a bike.
Saving Money on the Big Things
Not having a car is one of the things that has set me apart from most of my peers since university. Whilst it has not always been convenient, it has allowed me to save significantly more than a lot of my friends who cite having a car as one of their biggest expenses.
Whilst being frugal and saving on the little things adds up over time, saving on the big things like your living arrangements or a car is where you can have the biggest impact. The effect on your finances is immediate and meaningful. It has afforded me a few smaller regular indulgences because my larger monthly expenses are much smaller.
This was a conscious decision when I first started making my way in the world as a (semi) independent adult.
Are you in a rush to live like your parents?
When those of us in our 20s first move away from home, either to go to university or after graduation it can be quite a shock to the system. Rather than having our parents support our standard of living, we have to learn to support ourselves.
Many 20 some-things fall into the trap of trying to keep their standard of living the same as when they still lived with their parents. They want to live in a nice place, travel around comfortably in a car, and go on regular holidays. However, its easy to forget that it may have taken many years for our parents to reach a comfortable standard of living and that as young 20 some-things we most likely are not earning as much as them, at least not in the early years of our career.
It’s perhaps why there are so many 20 some-things trapped in debt.
Some are even blogging about it! As an aside, some of my favourites Debt Bloggers include:
The secret to setting a solid solid foundation is not to be swept up in the rush to improve your lifestyle. This is of course easier said than done but it’s what I started doing in 2007 after my graduation and already I’m beginning to see it pay off in a meaningful way.
How I Doubled my 2008 Invested Savings
In 2008 I started my first full-time job after graduating the year before. I listened to some advice I had read online about the potential to grow your savings by ‘living like a college student’ for as long as I could and investing the extra.
It sounded like a worthwhile plan!
Rather than work towards buying a car or finding a swanky new pad, my parents generously allowed me to keep living at home for a few months and I continued riding my bike everywhere.
After cycling home each day, come rain or shine, I made it my mission to learn more about investing and the stock market and by the end of 2008 I had invested £2000 into the global markets –not a huge amount in the grand scheme of things but as a recent graduate on an entry-level salary I was really pleased with my progress.
The amount my £2000 of investments from 2008 are worth today?
That’s right. The value has doubled. Not a bad return, and this is only my returns from one year’s investments.
As a caveat, as many will know, 2008 was a crazy year in the markets and I managed to buy some extremely undervalued and volatile equities so these results may not be typical but it is a lesson in not only having the courage and dedication to investing during scary times, but a willingness to save at a time in life when there are lots of other pressures (when are there not?!). Also I’ve not ‘sold’ these investments so it’s not a *real* gain –I have a much longer time horizon for my investments)
The Myth of Sacrificing
If you like the sound of doubling your money in two years it may be tempting to cut your lifestyle down to nothing and invest everything you’ve got into investments. But the long term, sacrificing your life is not sustainable.
If you feel you have to miss out on things to be able to scrape together enough savings to invest then you will not be able to keep at it for long before you become miserable.
You must find something intrinsically good in what you are doing to be able to keep at it for long long enough for it to have a positive effect.
I’m still riding my bike (and investing the money saved!) because, whilst it has saved me money, I don’t do it for that reason alone. I do it for the pure enjoyment I get from riding my bike.
I love cycling; it keeps me fit; and in some cases it gets me to places quicker than any other mode of transport.
If I was cycling for the sole reason to save money I would have stopped long ago –the wet feet and cold hands that inevitably comes with British weather just isn’t worth it!
The same insight can be applied when it comes to your biggest money-making endeavour –your career. Getting a well-paid job can help with your finances, like riding a bike can help you save money compared with a car. However, if you are miserable in your career then you’re less likely to be able to stick it out, and thus not be able to make the same level of progress on your financial goals year in, year out.
The powerful lesson then, is to keep looking for things that not only help you save or earn money, but that you enjoy (or can east tolerate for many years).
For me, cycling (despite the rain!) is a good fit but what about you?
Do you do anything that may seem like a sacrifice but is really something you both enjoy and saves you money? Leave a comment below!
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