What would you say to your twenty-three-year-old self?

Drink less?  Love more?  How about, thank you and well done?  When I look back at myself ten years ago, one of the things that I want to say to that young woman is “Thank you.  You don’t know it now but you are going to pat yourself on the back in a few years’ time.”

The last couple of years have been a rollercoaster of adventure.  I left my successful military career of ten years without really knowing what I was going to do next.  I volunteered in Bangladesh.  I’ve bought a flat – in London!  I’m about to leave my job, again, to embark on a portfolio career.  I have been able to do all those things because, among other things, I saved hard during my twenties, which has given me options in my thirties.  Time is literally money; I could take a few months out coming back from Bangladesh to work out what I wanted to do next because I could draw on some of those savings – no point it all sitting in the bank as a deposit for a house if I didn’t have a job to get a mortgage!

I get it, saving in your twenties – hell, saving at any time – can be really tough.  Rent is expensive, you want to enjoy yourself, and saving small amounts can seem meaningless.  But please trust me, you will thank yourself for it down the line when you decide you want to go travelling for a few months or launch a new business or whatever it is your heart is telling you to do.  Here’s how I did it…

  1. I saved my pay rises.  The best financial advice my dad ever gave me was to save at least half of every pay rise I ever got.  At least half.  It’s so much easier to save money you haven’t got used to spending yet.  Set up an ISA and a standing order and it will look after itself. 

  2. I remembered that every little really does count.  It’s easy to think that the amount you are saving is meaningless but it really does add up over time.  Even £50 a month becomes £600 a year becomes £6000 over ten years (and that’s without thinking about the compound interest) – that could be 6 months when you don’t need to earn a living. 

  3. I got into good habits early.  Just as those few pounds a month add up, so do good habits.  If you are used to saving even a little when your income is low, it’s so much easier to save more as your income rises.  That said, it’s never too late to start; I left university with a load of credit card debt and student loans that I had to pay off first so don’t avoid saving just because you haven’t practised these habits before.

  4. I got a budget.  There are lots of free budget planners out there (please contact me if you would like a copy of mine).  Find one that works for you and use it!  Seeing where your money goes each month is incredibly empowering – if you know what your spending habits are, you can make choices about how you spend money in the future.  By the way, there is no point in having a budget that is unrealistic or you don’t stick to.  Experiment and find out what works for you then keep doing it.

  5. I have different spending buckets.  I have up to five different savings accounts at times.  That might sound like a lot but I find it really helpful to see what I have saved in different areas of my life.  I have an account for annual payments (things like my season ticket) which can be difficult to afford in one go – I add everything up, divide by twelve and put that amount aside each month so I have the funds available when the bill comes in and I save money by not paying in instalments (usually more expensive).  I have a ‘save to spend’ account for clothes, haircuts and so on, things that I don’t buy monthly.  I have an ISA for long-term savings that I don’t want to touch, a holiday fund and, until recently, the house-deposit fund.  If you’re disciplined, you could have just one account that you mentally divide up but I find it helpful to see it all clearly, especially when I’m working out if I can afford that expensive new coat I’ve been eyeing up!

  6. I spent as well as saved.  As you can hopefully see, saving doesn’t have to just be about putting aside money for a distant future.  I truly believe that you need to enjoy yourself along the way, whilst making some sensible provisions for the future you; there’s no point scrimping and saving so you rock up in your thirties with a lot of money in the bank and completely miserable.  So buy the coat, book the holiday, blow your budget on an expensive meal with friends.  Just do it mindfully – set yourself a goal and work towards it or understand that you are making cutbacks elsewhere this month to afford it.  Travel has always important to me so I’ve had a travel budget alongside other savings so I can make sure I keep doing the things that make me happy, while still being ‘sensible’. 

  7. Most importantly, don’t beat yourself if you don’t manage it every month.  It’s all learning – try to identify what stopped you meeting your spending and savings goals that month and how you can avoid that pitfall next month. It’s a cliché but Albert Einstein reportedly said that insanity is doing the same thing over and over again and expecting different results.

Vix is a jack-of-all trades.  A leader, a changemaker, a gender and security expert, she had a ten-year career as a Royal Air Force intelligence officer.  She is now building a new portfolio career helping individuals and organisations achieve meaningful and sustainable change.  She is launching a coaching practice, training to be a yoga teacher and blogs over at www.another30something.com.