Reach your savings goal one day at a time.
Welcome to Day Two of the Micro Saving Challenge.
Would you like to reach your savings goal one day at a time? This challenge isn’t about making you rich overnight. It is meant to be a plan which uses small, baby steps to help you reach your saving goal one day at a time. I am going to focus on what can be done in just under three months. If I can do this for three months I know that I will find it motivating to move to a six-month goal and so on.
I am going to post a new entry each day talking about the challenges I have faced and the small changes I have made to get to my money-saving goal.
If you are just joining us and have missed the instructions from yesterday, you can access them here.
Before we get started on day two’s challenge, make sure you have banked your 11-week challenge money. To recap, if you pick challenge one you transfer 78p, challenge two £2.89, and challenge three is also £2.89. That is yesterday’s money.
Today the transfer amounts are: challenge one 77p, challenge two £2.88 and challenge three £2.90. As a reminder here is what you should be able to bank by December 31st by following this step alone: challenge one saves £30, challenge two saves £155, and challenge three saves £255. Pick a challenge which works for you and stick with it.
Remember to keep a track of what you have banked. The numbers today might seem small but I want you to remember this is a day by day challenge. It is not meant to change your bank balance over night however it is meant to show you that with a few small changes you can achieve big things.
Our challenge for today is less complicated but might take a bit of effort. I want you to go through your bank account and list out all of the regular amounts which go out via Direct Debit or Standing Order. This is all of those amounts which just disappear out of the door without you realising.
This step might take you a couple of hours to complete but I promise you it will be worth it in the end. Take the list of payments which go out on a regular payment and start to categorise them. What is essential? I would count payments like utility bills, telephone, credit cards, and insurance as essential. In the second category I would list my ‘nice to have’ items such as my contact lenses subscription and in the third will be the totally optional items like my monthly beauty box subscription. We will focus on amounts like the weekly shop on another day. The challenge for today is to focus on those standing payments (so stuff you don’t pay for on your card or bank transfer).
Here is a worksheet to help you out.
Use the weekend to take your time to work through your account. Categorise each standing payment and see what your standing payments are telling you. On Sunday we will have a recap and see how you have progressed. I am hopefully of some big savings in this step.
Now that you have analysed your payments it is time to make an action plan. Your can take this step as far as you like. Work through each payment and ask yourself these key questions:
- Is this an essential payment?
- If it is essential what steps can I take to reduce the amount?
- If it is not essential, is this payment holding me back from achieving my goals?
- If you answer yes to question three I would expect you know the action to take!
If you decide to reduce or cancel any of the payments you could opt to re-divert the payment to your savings pot you setup on day one of the plan. For example I am hoping to reduce my contact lens subscription by £10 per month. Once I have setup the new payment I will divert my savings amount straight into my separate challenge bank account.
Good luck with your homework for the weekend. I look forward to another day of money saving tips tomorrow.
If you missed the day one instructions they are here.