PERSONAL

How to stop spending and start saving

I want to share some money saving tips and tricks with you today. I never realized how passionate I am about saving money and spending it smartly until I started writing this post. There are too many ideas in my head, so let´s start with basics first. Hope you are ready to save your bank account.

Little history of my relationship with money

I never thought of myself as somebody that could one day be good (or a lot better) with money. I started making my own money at age 15. I was doing a lot of different student jobs in Slovenia and Croatia and somehow spent all I earned. Working was never a problem. I liked making my own money. Some of my long-term jobs were working for marketing research company, clothing store, photo studio and having my own business (distribution and online shop). The last one was definitely the hardest. After a few years (and a market crisis) I decided to close it. I was left with a big minus on my account ….. a long story short, I had to save a lot of money as soon as possible.

A great opportunity came along and I moved to Austria. Compared to Slovenia, Austrian paycheck was a lot higher, but so were the living costs. I tried my best to save 65% of my income and I saved around 6000 € in less than a year and payed off my debt. After all that, I can say I´m a lot better with money today.

Once you experience having zero money (or being in debt), you always fear of going back. And I know it can happen really fast. So I want to do everything I can to prevent that from even happening again. And that doesn´t mean I´m super cheap and stay at home all the time, it just means I try to spend and save my money smarter now. I´m not an expert, far from it. Any I know everybody has a different story, but I can tell you what works for me.

I´m not an expert, far from it. Any I know everybody has a different story, but I can tell you what works for me.

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Make a plan

First you need to understand your finances. Be honest with yourself. If you don´t have a job, get one. If your job doesn´t pay enough, start looking for a new one. Think beyond the borders of your country too, especially if you live in EU. Don´t be too proud to do anything that comes around. Make a money plan every month and write it down.  Sort out your priorities.

#1 on your list should be all your bills and loans before you do anything else with you money. Write down exactly how much you need for all of them. If your bills for rent/electricity/phone/internet/water… don´t come in the beginning of the month, just put the money for them aside or even separate it into different envelopes and don´t touch it. Just don’t!

#2 is money for food, so let´s say you spend 150€ for food, write it down and use envelopes if you prefer. So you can make 4 envelopes for each week and use it just for food.

#3 put some money apart for transport if you use bus/train/car every day or just for some trip that might come up. I walk to work, but I do some train or car trips every month.

#4 put at least 50-100€ apart every month for emergencies. You never know what can come up and you should be ready. For instance, we had to pay 200€ extra for winter electricity/heating this month, or maybe you need new glasses or fix something in the house. You never know and if you are living paycheck to paycheck, this is definitely a smart thing to do.

#5 Make savings account and transfer some money automatically to that account so you can´t spend it. You can always transfer it back if anything happens, but be strong and don´t ever do that. Find a way, get an extra job if needed.

#6 after everything is paid and planned, you can see how much you have left for going out, new clothes….

If you are thinking that you don´t have enough to do #4 and #5 then you shouldn´t be spending any money on extra clothes, dinners, coffees, gifts, cinema or other things that you don´t really need right now.

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My Savings and money plan

After last summer I came back to Austria and worked part time (20h/week) for 10 months (till now). I will not write down my numbers. Although I wanted to be honest and had them written down for you. But I can say that in the last 10 months my money would be spent like this:

  1. 35% rent and bills (with electricity, water, internet and phone). We have one of the cheapest flats here in Schladming (but definitely not the smallest). I guess it was a mix of luck, good timing, and my negotiating skills.
  2. 20% food. I´m vegan – so lots of good fruits, veggies. I always put quality before price, when it comes to food. Your health should be #1 on your list, so don´t be cheap or you will end up giving all your savings to pharmacy or doctors.
  3. 10% transport (train tickets or gas)
  4. 25% saved up for traveling, emergencies, season ticket, furniture…
  5. 10% left for gifts, cosmetics or whatever I would need that month. If I didn´t need anything it would go to my savings.

So even with a part time job I was still able to save up some money for a season ticket (Salzburg super ski card 500€), a new awesome bed and matrace (500€ – that´s my half), went to Hvar (Croatia) twice and I didn´t need to touch my old savings. I started working full time again this month sand my plan is to save at least 60% of my income. 


Now let´s take a look how you can save as much money as possible. I will start with the biggest addiction most people today have and that is clothes.

Stop chasing trends

If you want to save money, stop shopping it like a crazy fashion blogger (most of them don´t even own or paid for clothes that they are wearing). Stop checking magazines, Instagram, get off Pinterest and stop obsessing over other people’s wardrobes. At least until you learn how to control yourself.

Shops used to have 2 seasons: Spring/Summer and Fall/Winter. But now Fast fashion brands have 52 micro-seasons per year! 52! With new trends coming out every week, the goal of fast fashion is for consumers to buy as many garments as possible, as quickly as possible. Are you sure your budget can handle it? And are you sure you want to look like everybody else? You know you will always want something new and you will probably never be really happy with what you have. So learn to ignore them, avoid this shops, build your own style and be happy with what you have.

Fast fashion product ( HM, Zara, Mango, Primark, Top Shop…..) are designed to fall apart, they are full of chemicals and are made in sweatshops. And that is something I´m not willing to support with my money.

An article in The New York Times says the Center for Environmental Health is focusing on reducing the lead content in products marketed to young women because lead accumulation in bones can be released during pregnancy, potentially harming both mother and fetus.


Support fair fashion

Since I decided I will buy only products from fair and sustainable brands I shop more consciously. I write down what piece of clothing I want to buy. I ask myself: Does it goes with other products in my wardrobe? Does it fit me perfectly? Is it a good quality? And if I still want it after a while, I go ahead and buy it. So many times I would realize that I don´t really need it and it´s not really work-appropriate, age-appropriate or even weather-appropriate (for mountains). So I  just don´t buy it. 

Build a wardrobe of items that make you feel great, you love to wear, feel good on your skin and will make you happy for a long time. My plan is to slowly build a wardrobe with great products, made from organic materials that are good for me and environment. Build a “capsule wardrobe” if you want to call it that. It definitely worked for me.

  • I shop less and save more. A few days ago I bought my first new piece of clothing since March. I honestly didn´t even realize it´s been that long
  • I don´t even get tempted to walk into fast fashion shops anymore and it feels great.
  • It´s easier for me choose my clothes in the morning. I know they all fit and are easy to mix and match
  • I have a cleaner wardrobe and more space, which I love

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I also love 2nd hand shopping but unfortunately there aren´t any thrift shops around here. Luckily there are a lot of online options Willhaben.at (Austria), Bolha.si (Slovenia), Krpice.hr (Croatia), Ebay.com), …


Don´t fall for marketing tricks

As somebody that worked in marketing I know a little bit about tricks they play on you. You all know “3 for a price of 2”, “Low price – only for a short time”, “Discount for new customers”, “Free gift with every purchase“. Next to colors, lights, smell it´s all there to make you buy and buy a lot. If you didn´t plan to buy it at first place, don´t do it now either. You will not save money this way, you will just spend it on something you didn´t really need in the first place.

There are some rules of what not to do when shopping by marketing consultant Martin Lindstrom, author of the book “Brandwashed: Tricks Companies Use to Manipulate Our Minds and Persuade Us to Buy.

Don’t bring your kids with you. They’ll help you spend 29% more than your budget.

Don’t shop with your partner. He or she will make you spend 19% more than planned.

Don’t use a shopping cart. People who carry their stuff spend 8% less.

Carry $100 bills. People are far less likely to want to break bigger notes. {marketwatch.com}

Unsubscribe from all online newsletters (hope my boss is not reading this). Great tool for this is Unroll.me.

Stop spam mail by putting a sticker on your mailbox that they are not allowed to put any free catalogs, flyers, and other spam mail in there (is that simple). Write an email to all shops/brands that are  sending their catalogs (like HM, Mango….) and tell them to take you from the list. 


Thanks for reading and I hope you found my tips useful. Next time I will give you some tips how to lower your monthly expenses (rent/electricity/water/food/…).  

Let me know if you have any questions.

Mateja

 

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