I’m an NHS mental health worker on £25k a year, but with £0 in savings – how do I limit my spending and get control over my finances?
Welcome to Money Matters: GLAMOUR’s weekly dive into the world of finance – your finance. These uncertain times have reminded us just how much understanding our money matters and yet… how little we talk about it and how much it’s shrouded in secrecy.
This stops now.
Keen to break that money taboo, we’re chatting all things personal finance from daily budgets to ISAs and pensions. Each week, a woman in a unique situation will give us an honest breakdown of her finances, and our expert will tell her easy tips on exactly how to tackle it. So, grab a cuppa, take a seat, and let’s talk about money…
Valerie* is 24, lives in East Anglia and is an NHS assistant crisis care practitioner working in mental health services. This is her money diary…
I worked throughout the Covid pandemic and managed to achieve a higher paying job within the NHS. I am clueless with money; I have no savings and am very embarrassed about the lack of control I have over my money. Help!
I graduated in 2019, moved back in with my parents and went straight into a job working in private healthcare. Thankfully, I was able to work throughout the pandemic as my job was considered to be a ‘key-worker’ role. Up until October, I was on £21k a year and have been lucky enough to secure a new, higher-paying job in the NHS. I’m now earning just under £25k per year and work as an assistant crisis care practitioner within mental health services. The hours are less and I’m on more money (what’s not to love?).
I recently had a devastating realisation that after working continuously since June 2019, I have no savings. Not one penny in either of my two savings accounts to show for the last 18 months. Shocked and embarrassed is how I’m feeling about the state of my finances. I have no savings; at the end of the month I am left with barely anything and I have no idea how I waste my money (emphasis on the waste). Each month I put money into my savings accounts and tell myself I won’t touch it; fast forward to the end of the month and I’m using up my so-called ‘savings’.
All my friends are buying houses and taking those ‘next steps’ in life and I have been working since graduation with nothing to show for it. My boyfriend is frustrated with my lack of money management and I’m painfully aware that I am stopping us from taking those next steps because of my financial faux pas.
I feel so left behind and like I’m not really ‘adulting’ very well. I also plan to go back to studying in September 2021; commuting from home to save money. I’m concerned that I may have to reduce my work hours or go part-time and therefore won’t have as much income coming in, so I need to save as much as I can these next few months to support myself and invest in my future.
Current account: £225.57
Savings account: £0.00
Annual salary: £24,907 pre-tax
Monthly wage: £2,075.59 pre-tax; £1,638.98 post-tax (I was emergency taxed this month because I hadn’t received my P45 in time).
Monthly wage post-lockdown: Same
Any other incoming payments: N/A
Bills: £350 (car, car insurance, phone and app subscriptions).
Other: £100 (monthly petrol).
Splurges: £760 (Christmas presents and a ‘shacket’ for me).
Weekly budget: I have none, probably why I am wasting so much money.
What I spent this month: £1,623.45
Student debt: I don’t know the exact amount, but I estimate it’s roughly £41,000. I think I will start paying this back now as I’m earning more, but I’m not sure what the amount will be. Earlier in the year I was using pay-later services a little too often, I’ve stopped this now as it only encouraged me to spend more.
MY MONEY THOUGHTS
What I want to save for: So much! I would like to save a deposit for a mortgage. I want to move out end 2021 or 2022; my partner has saved his contribution, but as it stands, I have nothing to put towards a house. 2020 has been a crazy and difficult year for everyone, I want to save money so when the time comes, I can spend time with loved ones (unrestricted) and be able to do things I enjoy, like holidays.
My best friends of over 10 years have been wanting to do a girls holiday since I can remember and it’s always me who doesn’t have money for it. I’d really like to be in a position, that if I want to book something to do with my besties, I’m not holding us back and we can just do it. I also want to have something put aside for ‘rainy days’.
How I want to plan my money for the future: I have opted into the NHS pension scheme at work.
My worst money habit: Impulse-buying, hands down. I buy stuff on whims too often and don’t take time to think about purchases and weigh up if I really need things.
My biggest money worry: My biggest worry is that I’m holding myself and loved ones back with my lack of money management skills and getting left behind in the process.
Current money mood: 😔 🤦♀️ 😞
WHAT OUR EXPERT SAYS…
1. Don’t be embarrassed
I know you feel ashamed but really, you have nothing to be embarrassed about. You’ve worked your arse off through this pandemic and it’s time you gave yourself some credit. Anyone who has managed to save a house deposit by the age of 24 has almost certainly had some serious help or is on a decent salary. Of course, there’s always room for improvement and there are things you can do to start building that financial future, but first, please cut yourself some slack.
2. Yes, you need a budget
If a budget sounds boring, let’s reframe it; you need to give your money a purpose. Every pound that drops into your bank account, needs to be accounted for and given a task. The best way to do this (if like me, Excel gives you the creeps) is the adapted 50:30:20 method. I talk more about it in my 50:30:20 budget guide but in short, you need to break your spending down into three categories: needs, wants and goals. The ‘goals’ category is what you save each month and that amount needs to be automatically transferred into your savings shortly after you get paid.
3. Dig deeper
A budget is a start, but let’s also look at the challenge of how to resist the temptation to spend what you’ve saved. Taking a look at your banking app and scrolling back through the last three months, identify the three purchases you regret the most. Look out for any patterns and spot your triggers. Spending on a Sunday evening? Blowing it on payday? Which brands are your biggest weakness? Do Instagram ads hook you in? Whatever it is, take note and think about how you can better protect yourself. I’m talking website blockers, unsubscribing from marketing emails, unfollowing brands on Instagram and deleting shopping apps.
4. The Wish List
Now, I know this all sounds very extreme, but what this doesn’t mean is no fun and no treats. Remember what I was saying about giving your money purpose? Just as you’re intentionally setting aside money for your financial future, you can also do the same for clothes, makeup, and girly holidays. That’s where the ‘wants’ part of your budget comes in and having a wish list to keep note of all the things you dream of buying. This is a brilliant way to combat impulse buying – if it’s not on the list, add it, and then see if you still want it in 72 hours.
5. You don’t need to do this alone
Your boyfriend is obviously wanting to build a future with you and part of that will mean dealing with the very tricky topic of money. Once you’ve thought about the above and set yourself up with a budget, take some time to talk to him about why you’ve struggled to save, and ask for his support. While he might be frustrated, it’s important that he understands that this is something you want to address. You might consider asking him to help you hold yourself accountable to your plan of action or creating a joint saving plan that you can both get on board with.
Alice Tapper is the author and founder of Go Fund Yourself.
This column offers guidance, not financial advice. For personal investment advice, it’s always best to speak with a financial adviser. *Name has been changed.
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