Real-life money: I saved £6,000 in less then a year to launch my business

Mariam Bashorun wanted to leave her job to work on her business full-time, so she saved £6,000 in less than a year. She tells us how she did it.

Love Money
Last updated: 5 April 2018 - 11.23am

I gave myself one year to save enough to quit my job and commit to my business full-time. Fast forward eight months later, I had handed in my notice and had just over £6,000 in my account. 

In autumn 2015, I realised there was a gap in the market for brands looking to reach a black British audience. I set up a website and within a month I had my first client.

Things took off pretty quickly but I was still juggling a full-time job.

The business wasn’t earning enough to sustain my lifestyle but I was desperate to commit to it and explore its potential.

Moving back home

It’s no secret that rent prices in London are horrendous and once you factor in Council Tax and bills, that is a lot of money coming out of your account every month.

One of the quickest ways to cut costs was moving back home with my parents. Fortunately my parents live in London and were happy to have me home.

That being said, it was still a difficult decision to make. Social stigma aside, I was worried about how this would affect the dynamic I had with my parents and how comfortable I would be as an adult living at home.

There was a period of adjustment but it’s been worth it.

Not worrying about rent afforded me the privilege to focus on what I really wanted to do.

Cash boosts

As my monthly take home was just over £1,300 and I wanted to be out of my job in a year, I explored every option when it came to netting extra income and reducing monthly costs.

The first thing I did was switch my current account. I moved from HSBC to First Direct as they offered a £100 incentive if you stayed for 6 months.

I then got on the phone with my network provider and forfeited my mobile upgrade in exchange for a significantly reduced monthly bill.

My next step was eBay. I cleared out my wardrobe and sold anything that I hadn’t worn in the last year. I didn’t earn as much I had hoped but I was able to add another £100 to my savings.

Any purchases I made, I used cashback sites and voucher code websites. This has saved me so much money in the long run. It’s now a rare occurrence for me to pay full price for anything.

Creating a realistic budget

All my previous attempts at saving had been pretty disastrous and that’s because I approached it with unnecessary severity.

I would only allocate a small amount for essentials and put the rest in to my savings account. This meant I was constantly dipping and saved next to nothing.  

After analysing my budget, I found that my spending was erratic and I made a lot of impulse ‘feel good’ purchases. I was overspending on work lunches and snacks, spending on average £100 a month.

I was also caught off guard by how much I spent on beauty products. My skincare products (excluding makeup) cost £152 and were replaced about every three months. That’s just over £50 on my face every month.

In an average month, I spent £200 on transport, £130 on clothes, £160 on going out, £100 on work lunches and £50 on beauty products. I was barely putting anything in savings and often found myself in my overdraft.

 

Typical Monthly Spend

Transport (Tube + Uber)

£200

Clothes

£130

Going Out + Entertainment

£160

Work Lunches

£100

Beauty Products

£50

Phone Bill

£40

Rent and bills

£620

Total

£1,300

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This time I worked out a percentage system. I looked at my spending habits and worked out what I couldn’t do without and how much it would cost me. I allocated a certain percentage of my salary to every aspect of my life.

Just over a third (35%) of my earnings went to my business fund, 14% went towards emergencies and 10% towards holiday savings.

The rest went towards living costs which I also split into percentages. I would make deductions from each area as I went through the month. On the occasions that I didn’t use up my monthly allowance, I would put the leftovers straight into my savings account.

 

Typical Monthly Spend

Business Fund (37%)

£481

Transport (Tube + Uber ) (15%)

£195

Going Out + Entertainment (15%)

£195

Emergencies (14%)

£182

Holiday Savings (10%)

£130

Clothes + Beauty Products (6%)

£78

Phone Bill (3%)

£39

Total

£1,300

I was really determined, so giving up big nights out and avoiding the shops were surprisingly easy.

I pared down my skincare routine from 10 products to just four multi-purpose products. I rarely bought new clothes but any purchases I made were done during the sales or I went to sample sales.

There are regular sample sales in the Shoreditch area and over the Christmas period, I got most of my gifts from the Accessorize, FCUK and Darling sample sales.

I reduced my phone bill by half a couple of months into my new budget. I decided not to amend the budget but put the difference straight into my savings.

The luxury I missed most were my expensive work lunches. To avoid temptation, I spent more time putting together tasty packed lunches and avoided snacks altogether. This was great for my wallet and my waistline.

[Read more: Nine current account mistakes costing you money]

Feeling freedom

I had planned on saving for a year before I handed in my notice but the demands of my new business made me feel comfortable leaving when I did.

The money I saved gave me the confidence to quit my job knowing that I could survive for at least six months.

It’s been 10 months since I went full time with it and I have no regrets. The business is doing well and being smart about saving has now become a habit.

Mariam is the founder of Black British Bloggers, a network connecting and generating opportunities for Black British bloggers.

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