Personal Finance Journey – How I Saved £34k in 3 Years

Whilst I have always been a natural saver, I didn’t really get into personal finance until I started university three years ago. I was supposed to study abroad for my second year and found out I needed to prove I had access to £18k to get a visa. At this point I had zero pounds left in my savings, a part-time job and just eight short months to sort it out. 

Enter the personal finance community! I became frugal, got intentional about my spending and began side hustling. 6 months later I had over £8k in the bank and that combined with my upcoming maintenance loan, I had enough to prove the £18k. Unfortunately, that was April 2020, and unless you have been living under a rock, I bet you can infer what happened next. 

Yep, thanks to a little thing called covid, I never needed to prove my financials. But I did still have the £8k in the bank. 

So instead of wasting that hard hustled money, I re-evaluated my priorities and set new goals. I got more into the FIRE movement and made a long-term plan to reach financial independence. Fast forward two and a half years and I have just graduated with a 2.1 Honours degree in History, my net worth is over £34k and I am just about to leave on a yearlong round the world trip!!

Okay that’s enough of my life story, let me tell you about the five things that made this all possible! 

Kept track of everything

I track every single penny in and out of all my accounts on a ridiculously big spreadsheet! This habit started when I got to uni (2019) but I took it one step further and back tracked it until 2015 using digital bank statements. So, I currently have 7 years’ worth of data on this one spreadsheet. 

This thing now has 11 tabs tracking everything from my goals, current balances, net worth, retirement projections – you name it it’s on there. This thing is 3 years in the making and it’s epic. It’s my precious! (bet you read that in Gollum’s voice 😉)

Made the most of free money

I made sure to claim every penny of free money I could get – including a bursary offered by my university and the LISA government bonus. Claiming both of these has amounted to £4k in extra money, all of which went directly into savings. 

Whilst technically not “free” money, I must take a moment to acknowledge the maintenance loan I took out each year of my degree. This accounted to £27k over three years and was what I used to live on. Without this my net worth would definitely not be what it is today. It may sound backwards to take out a loan to save more money, but the UK student loan repayment system ensures this was actually a smart financial decision. My money is better off invested and working for me than it would’ve been if I had spent it all.

Invested my savings

My investment journey began about 9 months after I turned 18 and I started with £10. I was a little risk adverse when I began so I set the account up to take £2 per week, just so I was consistently adding to the pot. This amount increased over time to the point where I fully maxed out my ISA’s (£20k) last tax year.  

At one-point last year I was nearly £2k up on my investments – unfortunately due to the volatility of the market recently this has reduced to just a little over £0 gained. So, whilst investment gains only contribute a tiny percentage to the £34k saved, this will enviably increase over time as compound interest works its magic.

Lived frugally

This is probably the most crucial factor of them all. My entire mindset around income and spending has dramatically changed since I started university. I used to be very materialistic and would only look at short term savings goals – these combined meant I lived paycheck-to-paycheck even though I didn’t have any outgoings.  

Over the past three years I have been paid just under £64,000, meaning my basic savings rate is around 50%. This is down to living frugally and increasing my income through side hustles. 

Multiple streams of income

When I was starting out on my finance journey, I read a personal finance article about how the average millionaire has at least 7 streams of income. The reasons behind this just make so much sense so from that point on I made it a goal of mine to always have more than one stream. Before graduation I had 6 consistent streams of income and 1 additional inconsistent one. 

As Tesco has always said, every penny counts, and this is my mindset when it comes to side hustles! Because eventually those pennies will make pounds and then you’ll start to see a difference. This is one of the main reasons I kept doing surveys, even when it seemed like a waste of time, because making a couple of pounds a day (I didn’t have a job at the time) was better than nothing.

So, there you have it, a breakdown of my personal finance journey. Exactly how I managed to save £34k in three years!