#AD / Fidelity – Invest for the Moments That Matter
Important Information: This article was sponsored by Fidelity, but all opinions are my own. The information in this article is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser. Please also be aware that the value of investments can go down as well as up, and so you may get back less than you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future.
My main philosophy is to spend your money on the things that make you happy.
As a money blogger, a lot of people assume that I should be saying to never spend any money ever, or that I shouldn’t be spending any money myself.
The thing is though, that although I love budgeting my money and being sensible with it, that doesn’t mean that I don’t want to spend any money ever.
I still love shiny new things! I love exotic holidays, I love clothes, I like to look nice, I like to have a well decorated house.
These are the things that I personally like, and that isn’t going to be the same for everyone. Generally speaking though, a lot of people like these things. And that’s ok!
I want you to know that what you want to spend your money on is up to you. It’s not up to me to tell you what I think you should or shouldn’t spend money on, because you’re in charge.
What I do always come back to though – is spending your money on things that make you happy.
I don’t want you spending your money on junk or pointless things. This is easy to do when you don’t have a budget in place because there’s no tracking or analysis going on.
What Are You Saving For?
I’m a big fan of saving goals. When I became a single mum I was determined to save up for a holiday with my daughter, and did it in a few weeks.
After that I was determined to save for a couple of things I’d wanted for a long time – one being laser eye surgery. And I did it!
I believe that having a goal of something to save up for is so important. It gives you something to look forward to.
At the moment I have a few savings goals going on – both big and small.
These are my small goals:
- Mole removal (I have a mole on my back where my bra is and it bugs me!)
- Home decoration (mainly my office and my daughter’s playroom)
These are my big goals:
- Mortgage overpayment
- Early retirement
As you can see, those all require money! This means that I will need to make sure I plan as much as possible and make sure my money is going to the right place.
Fidelity has a great message that you don’t need a ton of spare money in order to reach your goals, and I agree.
A lot of people wait out for a big pay out – the lottery, inheritance or just waiting for a big sum of money to come from somewhere. I’m not one of those people.
When I started out on my financial journey I had no money at all. So any spare money was hugely important to be – even if it was £1. That was an extra meal!
Any big sum of money is made up of smaller amounts of money. Instead of waiting for that big pay day, I set out trying to make as much money as I could, even if that meant small amounts. And it all added up!
What Would You Cut Out For Your Goals?
It’s really important to talk about the sacrifices you are willing to make in order to reach your goal.
This is an area that a lot of people struggle with as they don’t want to change anything in their life. I don’t think that making changes needs to be a negative, especially if it’s going to get you to your goal.
I sacrificed a lot of things to reach my goals and that’s because I knew that it was only temporary.
There are some things that you can cut out that you wouldn’t miss. I’m not a fan of making yourself miserable to reach a money goal, so I wouldn’t say cut everything out.
Some examples of little luxuries that you could cut out include things like:
- Daily coffee or tea
- Going out for lunch at work
- Getting your nails done each week
- Nights out with the girls
Remember – it’s only temporary. You can add all of these things back in if you want to once you’re where you want to be.
According to a study by Fidelity, simply ditching your daily shop-bought coffee (at £2.50, five days a week) could save you £50 a month to invest straight into a Stocks and Shares ISA. While this may not seem like much at first, over time this could turn into more than £7,000 after 10 years!*
It’s important to be aware of what tempts you as well. For me, it’s sushi and croissants. Not together!
I love them both as snacks, and I’m happy to include croissants in my food shop, but I don’t include sushi because it’s so expensive (the specific kit that I like anyway!).
When I get tempted to buy some sushi, I remember my goals. I keep them in mind, and weigh up whether I’d rather have the sushi, or the money towards my goals. My goals usually win!
Where To Save Your Money
When you are saving money, you need to make sure that you are earning interest on that money. The reason? Inflation.
If you leave your money in an account that doesn’t generate any interest then you will lose out due to inflation.
A great place to save your money is in a Stocks and Shares ISA. If you are interested in taking advantage of your allowance for 2019 – 2020 you need to be quick. There is a cut-off date for taking advantage of the yearly ISA allowance – and that date is rapidly approaching.
The deadline is 5th April 2020 so make sure you top it up before then!
Money Saving Tips
I have a ton of tips that I hope will help you save some money towards your goals! Make sure that you are gentle on yourself, but also try and push yourself as much as you can. You CAN save money and you will achieve your goals.
When we are embarking on a new journey, it’s tempting to throw everything that we have at it.
While I admire this determination, it needs to be realistic. If you suddenly decide that you are going to start saving 50% of your income when you’ve never saved anything before, this is a bit unlikely.
Put together a budget using realistic numbers (go back through your spending to see the real amounts) and see how much money you have left over to save.
Reduce Your Expenses
As discussed, if you cut back on some of your expenses then you will have more to put towards your goals.
When you have created your budget, take a look at all of your expenses and see which ones you can reduce.
If you manage to knock some money off your big expenses then that will be the most beneficial, but it can help to look at your variable expenses.
Variable expenses are the ones which tend to vary from month to month. It’s your expenses which are outside of your usual bills. So things like food shopping, meals out, nights out, clothes etc.
This is where you can save money – by not spending on things out of convenience or just things that you can cut back on for now to help you reach your goal.
Earn Extra Money
My unique budgeting method – The Extra Income Budget – was created with the idea of achieving goals in mind.
When I had no money, I didn’t want to cut into my budget to pay for the things that I wanted. So I set about earning extra money and using the money that I got from that for the things that I wanted.
There are a bunch of things that you can do to earn extra money, and I put together all of my best tips in my free money making email course.
What are your goals that you’d like to save money for? What are you willing to cut out to achieve them?
Please remember that stocks and shares are not a 100% risk free way to save. This post was sponsored by Fidelity but all opinions are my own.
*Source: Fidelity International, February 2019 – based on a hypothetical illustration assuming a rate of growth of 5% a year, no initial charge, a platform service fee of 0.35% and an annual management charge at 0.75%.