Mortgage and me: Saver, 22, shares her money tips after saving £14,000 in 18 months | Personal Finance | Finance
From stashing away a lump sum to siphoning off a portion of income each month, saving habits vary. Personal preferences and current circumstances as well as savings goals can all play a part in a savings journey, and during an exclusive interview, Anna Wawrzynczak, 22, has shared her story.
Anna, who lives in South East London, has always considered herself a responsible saver.
By the age of 21, she had managed to accrue £6,000 in savings – although she wasn’t necessarily sure what she would spend it on.
“I went on a long trip in 2018 and ever since then I’ve just been building money up but I had no real purpose for it,” she tells Express.co.uk. “It was kind of just there, just in case.”
She was putting whatever she had left over from work aside, and Anna realises now she was subconsciously saving up an emergency fund.
In the past, she had let the savings sit in her current account and then a savings account, but it offered “crazy low interest rates”.
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Later, she put some of the sum into a fixed term savings account, and has also opened up a Lifetime ISA.
It was in June 2019 when Anna came across the savings personal finance life-planning tool Lifetise, when co-founder Caroline Hughs – who set up the company with fellow co-founder Nick Wasmuth – appeared on the Adulting podcast with Oenone Forbat to discuss saving and investing.
“I’ve always kind of had this idea of I want to have my own place one day, but it was just such a far out idea,” Anna reflects.
“I didn’t think it was the realistic option for someone like me.”
Living in London, Anna’s situation meant she thought purchasing a property of her own “was absolutely never going to happen” – but there was still the possibility.
“Naturally intrigued” by the sound of Lifetise, she visited the website and went through a financial assessment.
She played around with the numbers, to give herself a number of different savings plans, all of which were emailed to her.
“At that point, I had £6,000 in my savings; it was just sitting around,” she says.
Looking at the plans, Anna recalls: “I was like, ‘Okay hold on, this is actually possible.’
“It kind of runs you through, like ‘this is how much you’d have to save each month if you wanted to afford a property by X date’. And ‘this is how much you’d have to save each month if you wanted to own a property earlier or later’ and it was just this nice visual of actually this is possible – it’s not just this unattainable goal that I’m thinking about.”
Anna signed up to the monthly savings reminders, and from then on, she stopped waiting until the end of the month to put leftover money into her savings.
Instead, she made the decision to pay herself first – she put money into her savings on pay day.
She also recalls reading up on the additional costs she may face when buying as well as the difference between a Lifetime ISA and a Help to Buy ISA via articles from Lifetise.
Since then, she has managed to save £14,000 in just 18 months.
Despite being just 22 years old, Anna hopes she will be able to buy her first home within the next couple of years.
“I think it’s a quick goal compared to you know, some people save for 10/20 years, but I’ve made quite a point of living that home with my family and so that I pay minimum rent…” she said. “I don’t have those extra outgoings because of that and so that means I can save in much quicker ways than a lot of people can.”
Anna notes that the goal will depend on her financial situation at the time.
“As I mentioned, I looked at all different plans depending on how much I earn,” she says, and adds: “I know what I’d want to earn before potentially getting a mortgage and making an application but it’s tough to know exactly when that will happen.
“At the moment I’ve got £22,000 saved up. So, I’m seeing where that grows from here.”
Anna explains she has saved her total through regular savings, but there have been times when she’s opted to put the money to a shorter-term savings goal instead such as a holiday or on Christmas gifts for loved ones.
She also limits her everyday spending by having two different current accounts, and moving money from one account into the other on a weekly basis.
“So that I’ve kind of got it separately,” she says. “I know I’ve got access to both cards if anything [happens] but this is my budget for the week and this is where I’m at.
“It also meant that I kept going back each week and saying like, ‘Okay, this is where I’m spending a lot of money, was that a necessary purchase or was I just be a bit extra with that?'”
Separating her weekly budget from the rest of her funds has helped her reflect on her spending.
Anna continues: “It got me into a nice habit of looking my statements in the face.
“I think a lot of us just ignore what happens in our bank and it’s so easy and nice to do that, but when you do look at it on a monthly basis, you don’t want to look at it and go, ‘Oh no not me again. I can’t believe I spent this much on food.'”