I’ve been thinking a lot lately about where I want to be in 5 years time. In 5 years, I’ll be 30, so I need to set some goals now and make sure I hit them by the time I get there.
So one of the goals I’ve set for myself is to buy a house in London by the time I’m 30. Ambitious, right? Not with the right financial plan.
So in order to get together a £40,000 deposit in 5 years, I need to save an average of £666 per month. I’m in a very fortunate position right now where I have cheap rent, and I worked hard to get a job that pays me well. Both these factors mean that I can actually save money.
I recently saw a quote by Warren Buffet, and it really made me think about how I go about saving currently.
Because he’s right. I was kind of just praying that I would have money left over at the end of each month that I could then stick into savings. But of course, the reality is that I would just spend it all every month and then, at the end of the month, I’d just say to myself ‘This month will be different!’
It never was of course.
So now I’m being more aggressive with my saving. I’m terrible with money, and I’ve just got to deal with that. But that doesn’t mean I have to be bad with my finances. I’ve got a list of places that I want to stash money each month in order to earn good interest rates, and I deliberately picked places that are hard to retrieve the money from, in order to limit myself.
Saving £666 per month might seem like an astronomical amount of money, but I’ve reasoned with myself that this is on average. It’ll be difficult this year, but once I get another pay rise, and then one after that, it’ll become easier and easier.
But then on the other hand, maybe I’m just fooling myself. I guess we’ll see in 5 years time, huh?