How To Save Money: How I Saved My First £100,000 (2024)

How To Save Money: How I Saved My First £100K – Updated April 2023

What would it feel like to have £100,000 saved up?

For many, how to save money remains a challenge and £100k is seen as unimaginable, especially with savings rates only now rising after years of record lows.

I was pleased to learn recently that Jeni Crane (38) had hit this significant milestone.

She announced it on the Financial Independence London Facebook group and I invited her to share more.

You might recall Jeni had shared her story previously about how a health experiment led her to Financial Independence.

To me, she is a fantastic example of what one can achieve if they have a clearly defined goal and the right mindset.

The right mindset puts deferred gratification into action and activates the upside possibilities that come with choosing a simple life.

I hope you take away as much from this guest post as I have.

I’ll now hand over to Jeni as she shares her tips on how to save money to hit £100k savings.

HOW TO SAVE MONEY

When I first started on my journey to Financial Independence (FI), £100k seemed like a lofty milestone on the way to, a frankly unfathomable goal, of my ultimate FIRE number.

Recently I hit that milestone and WOW, the supportive response that I received from the FI community was overwhelming.

Whilst it has been a long journey, I hadn’t fully appreciated the multiple baby steps I had taken to get to this point and to really accelerate towards my goal.

Although I have been saving for my retirement since my first pension contribution at 23 years old, in truth my “journey to FI” only formally started 10 months ago.

Prior to that, I didn’t even know about the concept of FI!

I’ve taken some time to reflect on the steps which have helped me towards FI.

Although I have quite some way to go, hitting £100k in savings makes this more real than ever before!

BEST WAYS TO SAVE MONEY

Below are the exact tips and hacks that have got me to where I am today with £100k saved:

1. Decluttering

It’s not until you declutter that you really see JUST how much “stuff” you have accumulated!

My mission to streamline initially started as a way to simplify life.

i.e. not needing to tidy as much and in an attempt to reduce the need for extra storage space for “stuff”.

Decluttering prevents you from buying more things, which you already have.

Especially if you employ the Marie Kondo (Author of Lifechanging Magic of Tidying Up) method – putting all things from one category in one place and starting your sorting and decluttering from there.

Most of us have tendencies to “repeat buy” certain things, whether it is toiletries, certain clothing, cleaning products or food.

It is surprising just how many duplicates you can find when you put all things of one category in one place.

This helped me to use up each item before needing to buy more and therefore save money.

2. Minimalism

I watched The Minimalists Netflix film – they focus on living life with less.

This was both countercultural and inspirational.

In our society of consumerism, it was really exciting to see, though quite an extreme version, people selling everything.

Doing so released them from the trappings of consumer debt and enriched their lives through travel and experiences in the process.

Whilst I am not in any way about to sell all of my stuff and live out of a rucksack – it changed my perspective considerably.

I used to get swept up in the latest crazes for clothes, tech etc.

Now I am perfectly content with what I have and have no desire to surround myself with material things to make me feel happy.

3. Make Do and Mend

When what I have eventually breaks or wears out I love to find a way to get it fixed.

Not so long ago we had a society which was proud to “make do and mend” and even more importantly people had the skills to fix things.

These days fewer and fewer people can sew.

It’s here that I admit that I am one of them but I am fortunate enough to have a very crafty mum who does all of my repairs.

However, I am acutely aware of the fact that I NEED to learn!

Frustratingly with many items, such as tech, it is often more expensive to fix them than replace.

That said I have found a local guy to fix my Dyson vacuum – 12 years old already…

and my Kenwood food processor – well over 20 years old, as well as give me another year’s use on a pretty old mobile phone.

So, the help is out there if you can find it and it is well worth sourcing to not only save money but also the environment.

4. Buying Second Hand

If all else fails and something must be bought, second-hand is my preferred and usually my only method.

I’ve saved an absolute fortune on high-ticket items like a mobile phone, high-end sports leggings, trainers, headphones and dresses.

Simply by setting up a “watch list” on eBay and having a predetermined “top end” of my budget.

I always start looking long before I need an item so that I don’t fall prey to high prices due to urgency or demand.

I’ve bagged “as new” £120 trainers for £15, a dress worth £90 new for £20, and a £500 phone for £350.

Facebook Marketplace has proven to be absolutely invaluable both for super cheap purchases and during the decluttering phase.

5. Knowing Your Numbers

After I read the book Your Money or Your Life I understood the need to know my numbers.

To truly know how much, I was being paid per hour, net of all expenses, how much my expenses were costing me and how to manage them.

Working out how much money I have earnt in my whole working life was an eye-opener.

It helps to bring into focus the realisation that I could attract large amounts of money into my life.

Plus, It shone a light on the fact that I had earned a significant amount of money but didn’t have an awful lot to show for it.

I had to nail down regular expenses and maximise on savings available on these expenses.

Haggling with insurance and energy companies meant that I could ensure that I was getting the best deals available and not spending money unnecessarily.

6. Mortgage Overpayments

In truth, this was one of my first forays into expense management.

Wanting to be mortgage free as soon as possible was my driver from the moment I got the mortgage.

Having been consumer debt free for several years, this debt, though a legitimate non-consumer debt, felt uncomfortable all the same.

Since getting the mortgage I have paid the maximum overpayment amounts and have managed to reduce the term from 25 years to just 9 years.

The mortgage is our largest expense each month so once this is paid off, I can make larger investments into my Stocks and Shares ISA and SIPP.

Related content:

Watch this video on how to pay off mortgage early to see the impact of mortgage overpayments:

7. Maxing Out My Current Account

Read any FI books and they will tell you that you need to have an emergency fund.

Whilst I do agree that liquidity in the face of emergency is important, for me it was more about the mindset than having the physical funds available.

Having that money immediately available meant that I was not acting with a scarcity mindset.

I.e. I could make sensible decisions about where I wanted to invest the money, which was in addition to my fund.

I found that having this money sat in my current account was best for me with a 5% interest rate on credit balances.

It made sense to leave it there rather than tie it up somewhere and with that kind of return, I found that hard to beat placing anywhere else.

8. Travel Hacking

A recent development in my FI journey is hacking, specifically travel hacking.

I took out an American Express Gold Card and have been putting my usual daily expenses on there and clearing it every month in full.

AMEX provide generous British Airways Air Miles for every pound spent.

So I am looking forward to using these for our annual holiday and saving on the airfare.

Related post: How I Saved £6,698 on Cheap Business Class Flights With Companion Vouchers

9. Cutting Expenses and Budgeting

Once I knew my numbers it empowered me to look for ways to get more for my money.

I started to shop in a local “low waste” shop and they order my staple foods for me in bulk, lentils, beans, nuts, seeds, tinned food, oats and cleaning products.

We now get our fruit and veg delivered to our door weekly from a local organic farm.

Buying food in this way helps to reduce those impulse purchases at the supermarket.

It also saves on time (travel to and from the supermarket and time doing the shopping) as well as fuel.

Recommended tool: The Budget For Life

Check out this video on how to live well on £50/week food budget as a family of 4:

10. Side hustle

Although my business didn’t start out with the intention of being a side hustle, it developed through a passion for nutrition and helping people.

Inadvertently, it has been another key factor in my journey to reaching £100k.

I have been investing all income from the business into my savings for retirement and this has certainly proved to be a welcome boost.

11. Taking Back Control of My Pension and Savings

I used to think that you needed to have a Financial Advisor (FA) to have a personal pension.

Unfortunately, a few years ago I fell into the trap of letting a Financial Advisor open and run my pension pot.

Whilst I was still contributing to my company pension, I recognised that it was predominantly invested in UK Property.

So was both underperforming and not particularly diversified.

I asked the FA to set up the pension so I could make annual transfers from my company pension.

However, I wasn’t aware that this was costing me a lot in fees to the FA every year, taken directly from the sale of my investments.

Once I had mustered the knowledge to work out how much I was losing in fees each year, I had the confidence to open my own SIPP.

I have reaped the rewards as the fees now remain safely in my account and make a positive impact on the growth of my pot, rather than my FA’s!

A couple of other areas I decided to invest in were a Lifetime ISA and a Stocks and Shares ISA.

All 3 of these accounts were only opened at the tail end of 2018.

I have found it incredibly motivational to see the impact that the government’s 25% LISA bonus makes to the balance and so have been motivated to fill this allowance for the year.

Managing both my SIPP and ISA through Interactive Investor and Vanguard respectively has been beneficial to my increased contributions.

I am able to see the impact of the deposits pretty much instantly.

Recommended: The Complete Guide to UK Pensions

In conclusion,

The journey to £100k savings has been a mixture of a steep learning curve and a change of lifestyle.

Investing in my personal development and improving my mindset has played a huge role too.

One particularly important factor has been the focus on not just finding ways to save money but also increasing my income.

There is only so much one can save from the income they make.

To hit £100k+ faster, the focus has to be on making more money whilst living a simple life.

More than anything else, hitting this milestone has taught me that I really can achieve the goals that I put my mind to.

My financial independence has never felt so close and I’m excited about my next 100k milestone.

More on how to save money:

• 50+ Ways To Save Over £10,000 Every Year
• READER CASE STUDIES: 6-Figures and Struggling To Save Money
• Why Saving Money Should Be Prioritised Over Investing
• 10 Reasons Why People Spend More Than They Earn

What is your biggest struggle with how to save money? Which of these tips will you likely implement?

Do please share this post if you found it useful, and remember, in all things be thankful and Seek Joy.