Let’s just say this straight up: Rachael Zoey, 25, has saved £14,000 in a year while on a £20,000.

A major factor in that savings success is that she hasn’t had to pay rent or bills, as she’s a live-in nanny. That’s a massive expense that she just doesn’t have to consider.

That being said, she has also picked up some budgeting tricks along the way to boost her finances to the max – which is why she’s started a YouTube channel to share her experience and help other people reach financial security.

Advertisement

Advertisement

Rachael plans to continue her saving and put aside enough money to retire in ten years time.

Rachael – who currently works as a live-in nanny but is studying to be a nutritionist – believes no-one is ever too old to start saving and says putting aside £100 per week could be the difference between retiring with £1 million in 35 years’ time or nothing at all.

She claims that giving up little luxuries made a big difference to her savings.

She explains: ‘I started saving in November 2018 and within a year, I had saved £14,000 on a £20,000 salary.

‘To do this, I adopted a minimalist mindset and completely changed my spending. I stopped everything from Ubers, facials, dying my hair, unnecessary expensive food, buying alcohol to getting coffee out every day.

‘Some of these were hard to give up at first. But having the security and freedom of knowing I have money saved and invested massively outweighs the downsides of not buying £200 headphones, more clothes or having to make my coffee at home. These things all offer fleeting highs, but financial security, at least for me, gives me long term satisfaction and fulfilment.

‘I really want to help others to achieve financial freedom and show people my age, younger or older that they have more power or say over the future than they think they do.

‘The earlier you start saving and investing the better off you can be! But certainly if you’re under 50 years old, it’s never too late to get financial security.

Advertisement

Advertisement

‘The goal doesn’t have to be as extreme as retiring in ten years, it’s just about putting a little aside every month. Saving just £100 a week and investing it is the difference between retiring with £1,000,000 in 35 years or retiring with nothing.’

Rachael wasn’t always so frugal. Working as a live-in nanny, Rachael fell into the trap of spending all her £20,000 salary and not putting anything aside.

‘I was spending all of my money, all of it,’ she says. ‘I had about £1,500 coming in every month as disposable income.

‘Working as a live-in nanny, I had no rent and no bills, apart from my phone.

‘But all my monthly income got spent – much like I think a lot of people my age at the time do. You start earning money and you can buy all the things you want to and I did just that.

‘It was all spent on going out drinking, going out to eat, buying expensive food, getting facials, having my hair done, and lots of coffee every day!’

In November 2018, Rachael realised she needed to make a change, having been on the same £20,000 salary for the last two years with little to show for it.

She saw a YouTube video about the three-week ‘no buy challenge’ and decided to give it a go, refusing to spend money on anything other than the absolute essentials of utility bills, rent, food and travel.

Advertisement

By the end of that challenge Rachael had saved £1,000. That gave her the motivation to keep going.

Rachael went through her bank statements to see exactly where her money was going, and realised her major expenditures were coffee, Uber journeys, clothes, and beauty treatments.

She immediately cancelled all her monthly direct debits, such as yoga memberships and Netflix subscriptions, then committed to cutting back on all the little luxuries, finding ways to do things she enjoys on the cheap.

She also gave up alcohol.

‘I would do my own at-home facials, make my own coffee, cook at home and invite friends for dinner, opt for free taster classes instead of paid ones,’ says Rachael. ‘Everything I could do myself or spend some time finding a free version of, I would!

‘Another thing that really helped me was the decision to give up alcohol. I think alcohol was driving a lot of my spending and poor decisions.”

‘I understand how hard that decision can be for most people. But I think everyone can agree if you’re going out spending money on drinking then you’re going to be spending money on food afterwards or Ubers back home. It can be tough but it really helped.’

As we mentioned, Rachael’s job as a live-in nanny meant she didn’t have to pay rent or utilities, which helped her quite a bit.

Advertisement

But she still had to make adjustments to slash her spending, starting with a weekly budget.

The trainee nutritionist says: ‘I set myself a budget for necessities such as food, bills and travel. I brought my phone and tablet bills as well as my gym membership down to a total of £95 per month.

‘I cut back on fancy groceries but allowed myself a budget of £30 per week to spend on healthy food because nutrition is important to me. I also gave myself a maximum monthly spend of £100 on public transport and looked for ways to get cheaper train tickets.

‘And I allotted myself £200 per month as my disposable income to spend on anything I liked whether that was shopping for makeup and clothes or activities like going out with my friends.

‘I adopted a more minimalist approach to my life and got in tune with what I truly valued and prioritised my spending. I could still do things, I just couldn’t do all of them.

‘Now before I spend money, I think to myself will I be happy in a year if I spend this money?

‘Sometimes of course I do treat myself. Recently I paid £30 for a discounted yoga membership and I’m also planning a trip to Bali sometime soon because I love travelling and those life experiences are important to me.

‘There’s also a difference between being frugal and cheap. For example, my mum visited me a few weeks ago so I used my weekly budget to take her out to dinner. Eating out isn’t usually something I spend my money on but I loved doing it for her. I spend on my friends’ birthdays too.’

As well as completely overhauling her finances, Rachael set herself the goal of saving £1,200 per month, which she would invest into index funds – using an online brokerage account she has with Nutmeg. By November 2019, Rachael had saved £14,000.

Along with learning about investing, she reccommends using Monzo or similar apps to easily track your spending

Soon she’ll qualify as a nutritionist and will no longer work as a live-in nanny – meaning she’ll need to start paying rent and bills.

Despite this, she’s determined to keep up her saving habits, hoping that she’ll save even more each year as her salary increases.

Rachael is sharing her journey on YouTube to help other people get more comfortable with their finances.

‘I think a lot of people in their late teens and early twenties assume they’ll be successful in the future and spend loads now,’ she says.

‘One day, I suddenly realised I’m not super young anymore and I had been on the same £20k salary for the last two years. I was an adult now and not everything was going to fall into my lap like I thought. The harsh reality hit me and I decided that something had to change.

‘It was quite an extremist decision to save £14,000 in a year but I wanted to push myself. And honestly, life is so much better and rewarding now.

‘There is no comparison between the fleeting high you get when you buy something to the long-term fulfilment and happiness I feel now knowing I have made so much progress in my life and future.

‘Not having to pay for my housing or utility bills is a big factor in how I can save so much. I haven’t fully decided what I’m going to do when my live-in nanny position comes to an end. But my advice to others who currently do have to pay for these things and see it as a barrier to saving, if you currently rent is move in with parents or family, get a roommate, move into a house share, move to a cheaper area, downsize.

‘If you currently own your home: rent out spare rooms either contractually or on Airbnb, downsize, move to a cheaper area, buy a bigger house to rent out the extra rooms to cover the mortgage.

‘Is any of this ideal? No, these are all sacrifices. But almost everyone is capable of saving money in one of these ways. And these sacrifices are all temporary and lead to more options, opportunities and freedom in the future. saving comes down to delaying gratification.

‘£1,000 today invested in an index fund is £2,300 in 10 years (adjusted for inflation) and £10,000 in 30 years! A lot of people out there aren’t aware of this.

‘There’s nearly always a way to save money on everything someone spends money on. It takes time to look up how to and it takes sacrifice.

‘But it’s always possible and there’s always a way. And even if saving is absolutely impossible, everything is cut back to the bone already, I do believe it’s always possible to earn more. It might not be easy, but it’s always possible.

‘I believe it comes down to three things: believing in yourself, putting in the hours and not giving up when it gets hard.’

If you want more tips and tricks on saving money, as well as chat about cash and alerts on deals and discounts, join Money Pot, our new Facebook group.

MORE: Try our 2020 fiver saving challenge to put away £6,890 by the end of the year

MORE: How I Save: The marketing exec in Edinburgh paying off £350 of debt a month

MORE: How I Save: The 26-year-old freelance production coordinator earning £21,000 a year with £12,500 saved