Not sure where I read it or who said it, but I currently follow the saving strategy of:
“Spend what you don’t save, rather than save what you don’t spend“.
So every month, as soon as I get paid, money is automatically taken out of my bank account for my savings and investments and I then live on the rest. This seems to have been working quite well for me.
However, the plan backfired on me this month…
Aware that I was going to be spending a lot on presents for family and friends this month, my intention was to reduce the automatic amount taken out for savings/investments.
However, I forgot to make the adjustment, so the full whack went out of my account and I’ve ended up nearly £400 overdrawn! Fortunately, I spotted it in time before the balance went over my overdraft limit, which would have resulted in horrible bank charges.
I have used some emergency funds to plug this gap but will need to make sure I top the funds back up (for real emergencies…).
I appear to have spent a lot on presents, more so than last year, probably because I will actually be seeing my family this Christmas. I seem to have also spent more per friend and I’m not sure how that’s happened – poor planning I guess.
So do I need to change my saving strategy?
This is the first time this has happened, so I’m likely to stick with it for now – what I should have done was amend the automatic amount as soon as I realised what was going to happen, instead of procrastinating and then forgetting about it!
That’ll teach me…