2020 Money Review: How I Saved 54% Of My Income

2020 was the first year that I tracked all of my spending – and I mean ALL of it to the penny! In this money review, I will be sharing all the figures and how I managed to save the majority of my income.

At the end of 2019, I was fed up of not knowing where my money was going. I hated the feeling of having no money left at the end of the month. So, I made the pledge that in 2020 I would track everything I spend to see what I’m actually spending my money on and how I can save more.

I’ve decided to share all the figures on the internet (weird I know) because I wanted to give an honest account of how much I spend as your average university student.

{Disclaimer – I am not sharing these numbers to brag or show off! I am sharing to help break the taboo of not speaking about money! Please also keep in mind that my spending was lower than normal most months because of being at home the majority of the year.}

First of all lets talk about budgeting!

Budgeting shouldn’t be this boring thing that is avoided at all costs. Rather it should be seen as giving your money purpose. There are loads of ways to budget but my favourite is a zero-based budget.

A zero-based budget is where you allocate a job to every penny that you earn. This job could be anything – such as rent, bills, groceries and savings.

Start by writing down your income then take away all of your fixed expenses (e.g. rent, bills, savings etc.). Set budgets for all your variable expenses (e.g. food, entertainment etc.), take these away as well. Anything left over, add to your savings. Once all of these have been taken away your total should be zero, hence zero-based budgeting.

From this list you will be able see where your money is going and how much you are able to save. This is also a great way to see if you’re wasting money on anything unnecessary, such as random subscriptions you’d forgotten about. This is money that could go towards your savings goals.

Want to start budgeting but don’t know where to start? Have a read of these three simp le budgets to try!

Right let’s dig in the numbers!

As you can see from the pie chart, in 2020 I spent 46% of my income and saved the remaining 54%. This is way better than I expected! The pandemic definitely contributed to this as I got a rent rebate and most days I didn’t leave the house.

Out of this 54% of money saved, 50% is split between a high yield savings account and premium bonds. I invested the remaining 4% into a Stocks and Shares ISA.

In 2020, I had 5 different streams of income, ranging from my student loan to the new side hustle I picked up in May – taking online surveys and completing online tasks.

I also made money last year from a part time job, but I was let go in June due to the pandemic. Therefore, my income was less than I was expecting.

The extra category includes any random income – such as interest, birthday/Christmas money or refunds.

My biggest expense was unsurprisingly rent. However, this is less than I had planned to spend because I didn’t end up paying rent for half the year because of the pandemic. For context I live in shared student accommodation with all bills included.

Technology was my second biggest expense and completely unheard of for me. 2020 just happened to be the year that all my tech died and needed replacing! My phone of 5 years bit the bullet so I replaced it with a refurbished upgrade. Buying refurbished will save you hundreds whilst getting the same quality! I also replaced my laptop to be able to keep up with online teaching – my old one was laggy and kept crashing whenever I attended an online seminar.

I spent more than I expected on food and drink but this includes everything – groceries, take aways, eating out and nights out.

Travel isn’t a category but this is to be expected because of the pandemic. In a normal year this would’ve been a big category.

How did I save so much?

This year I have tried to be intentional with my spending – only buying things that bring me joy. To help with this I implemented the 30 day rule. The 30 day rule is where when you want to buy something unnecessary (such as excess clothes) you write it down (I used the notes app on my phone) then wait 30 days before you’re allowed to buy it. 9 times out of 10 you will have completely forgotten about wanting it within the 30 days.

Another big thing I did was only living off of one income stream. As you saw earlier, last year I had 5 different income streams but 4 of them went straight into savings. I’m only allow myself to spend my student loan – as its intended for living costs :).

Tips for Saving More

#1 Pay yourself first! This means transferring money to your savings as soon as you get paid rather than transferring what’s left after spending.

#2 Set specific goals! Work out how much do you want to save and when do you need the money by. This will tell you how much you need to save each month. Also think about whether this is a short term goal (e.g. a holiday) or a long term goal (e.g. a house deposit).

Example:

Short-term goal = Rome trip

Planning to go in October 2021 and it’ll cost £250 total. So need to add £25 each month into my Rome pot for the next 10 months starting in January.

Making your goals as specific as possible will keep you accountable and make large goals look less intense. Add this amount as a category in your zero-based budget! Thinking of it as an expense will mean you’ll be saving without even thinking about it.

#3 Separate your money by goal! Either join a bank that lets you separate your money into pots (e.g. Monzo, Starling or Revolut) or open up separate savings accounts for each goal. By keeping them separate you won’t accidentally spend it and you can see exactly how much progress you have made.

My 2021 Goals

Invest more – I’ve learnt from this money review that I keep too much money in cash. I need to look into investing some of it.
Monetise this blog – a major goal of mine is to make money from this blog. Hopefully I can achieve this in 2021.
Save 60% of my 2021 income – this will definitely be a challenge!

So there we have it my complete 2020 money review. I wanted to share this to show that talking about money shouldn’t be this big taboo topic. Plus, as a student you don’t have to fit into the broke stereotype.