Why Saving £10,000 Changes EVERYTHING

Here's why saving £10,000 will change your life. It's not just a number its SO much more than that. In this podcast we unpack why that is.

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Chapters 
0:00 Introduction
1:35 The Psychology Behind Saving £10,000
4:07 What Happens When You Don't Have It
7:00 How To Actually Save £10,000
18:00 What Changes When You Hit £10K

✅ Why £10,000 is the #1 predictor of financial wellbeing (backed by a 12,000 person study)
✅ The real cost of NOT having savings
✅ The step-by-step system to save £10K (even if you've never saved before)
✅ Why 77% of people lose sleep over money and how to stop being one of them

DISCLAIMER:
This episode is meant for educational purposes and should not be considered financial advice or UK tax advice. When you invest your capital is at risk. Past performance is not a guarantee of future success. Always do your own research.

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Transcript

SPEAKER_00 0:00

This always blows my mind. Around half of the UK has less than £10,000 in savings. The median savings rate in this country is around about nine grand. So if you're thinking that I'm behind with my savings, then you're probably not. You're probably bang in the middle. And this is mental too. One in six adults, nearly nine million people have no savings at all, not a single pound to their name in a savings account. So £10,000 isn't just some number either. It's not some arbitrary savings goal that a few finance people pluck out of thin air or just because it's £10 and then that first round number here. When you hit $10,000 in savings, something completely shifts. Not just your bank balance. I'm talking about your head, your confidence in the way that you walk into work on a Monday morning. There is actual research to back this up, which I'm going to be getting into today. I'm going to be breaking down why £10,000 changes everything for you. How to actually even get there too, if you've never saved properly before, or if you struggle with savings too. And what to do once you've got it. Because once you get there, just sitting on that and, you know, saying that's completely it isn't the play either. So let's get started on the Money Gains podcast. And we're going to go into why specifically this £10,000 number. Right. So the median UK salary, excluding London, is around about £37,500. That's roughly £2,400 landing in your account each month after tax. I'm not accounting for student loans and other tax benefits here. So around about £2,400. Now, £10,000, if we were to take that number, is about four months of living expenses at that level. That's more than enough time to completely reset your life if you needed to. And if you just did cut back, so I'm talking about if you just paid your essentials, your rent, bills, basic food here, you could definitely stretch that to six months, maybe even seven months, right? So even if you're earning 50 grand, roughly 3,200 pounds in take home here, 10,000 pounds is still giving you three to four months of runway. And if you cut back, maybe even four, five, or six, right? So there is actual psychology around this. And this is what's so important. And this is the bit that convinced me it's not just about money. Vanguard, one of the biggest investment firms on the planet, they surveyed 12,000 investors in 2024. And they found emergency savings are the single strongest predictor of financial well-being here. Not income, not investments, not your salary, your emergency fund, your security net, your safety net. People who had three to six months of expenses set aside, reported a roughly a 34% increase in overall financial well-being. And you might not think that that's a lot, right? But let's say you were sitting here today and I increased your financial well-being thoughts and got rid of that stress of money, and I got that up by 34%, you're gonna feel better, right? Now, another one, which this blows my mind too, I love this one. The Sleep Foundation found that 77% of people lose sleep over money worries. And over 40% said it happens all the time or nearly all of the time. And the University of Bristol's Personal Finance Research Centre found that regular savers sleep better, have higher mental well-being scores, are satisfied overall more in life, and are way more optimistic about the future. And that Vanguard study found that workers without emergency savings are four times more likely to be distracted at work because of financial stress. So not having savings isn't just hurting your bank balance here, although that is a big factor. It's hurting your performance at work, your sleep, your mental health, your relationships. It bleeds into absolutely everything. And this is the bit that most people miss out that £10,000 is not about being rich. You're not rich with $10,000. Let's be honest, guys, right? We know that, right? But what you do have, which I think just gets overlooked so much in life, is choice. And choice is worth more than most people realise. A UGov poll found that 17% of British workers actually love their job. Gallup put up a UK employee engagement at just 10%. That's 33rd out of 38 European countries. So the vast majority of people listening to this are going to a job that they don't like at best, right? So imagine you've got 10 grand in the account and your boss walks in and has a go at you, calls you an idiot in front of everyone, right? You can just say, nah, mate, I'm done, right? I'm out. I don't need this anymore. Why? Because you have a safety net in place. You've got that four or five months to find something better. Not just any job either that you have to jump into because, you know, you need to get something in the next 30 days and start bringing money at that point. This could be something that you actually want to do. So you're not just scrambling at this point, you're not panicking, you are being strategic. And it's not just a career choice that you're having to make, it's one that you actually want to go for. And the biggest one for me with this is this money could mean leaving a toxic relationship. That's the massive factor here. If you don't have that money set aside for yourself, you could be stuck with someone that you really don't want to be, and you're staying because of money. Another one for me is investing into yourself. That could be taking a course, developing a new skill. We've seen AI popping up everywhere. Could be learning about AI, so perhaps you're more productive in your job. Starting a passion project, too, that you've been putting off. Everyone I've worked with who hits this number tells me the same thing. They feel completely liberated. They walk differently. There's a bit of swagger knowing they've got that safety net behind them. So let's flip this and talk about what happens when you don't have it. Because this is the bit that nobody talks about, right? Your boiler breaks down. Two grand or four grand, depending on what he's doing. You can't need a major repair. You can't pay for it from the insurance, you know, it's a broken engine or something like that. Easily a grand, maybe two grand, right? You get made redundant from work. And that happens to around about 300,000 people every single year in the UK. And without savings, every single one of those situations could push you into credit card debt. And not cheap debt either. The average credit card interest rate in the UK right now is over 25%. An unauthorized overdraft is roughly 30 to 40% APR at most banks. And don't even get me started on payday loans either. Right? I've been there, I know this. I was 24 grand in debt, I've taken those payday loans out, and I know how much you pay back. So what starts as a two grand boiler repair quickly becomes two to three grand with interest, maybe even four grand if it ends up piling up and you don't pay it back. You're now paying for the emergency and paying the interest on top of the emergency too. And it's a real trap once you're in it. I know this again because I have been there, guys. I know what this feels like. So getting out of this is so important. And that emergency fund you just need to get in place. With that 10 grand in the bank, that boiler repair is annoying. Yeah? Let's not let's not be around the bush. The boiler blows up and you've got to pay for it. It's annoying. But it's not a crisis, it's an inconvenience at that point. You pay it, you move on, you top the balance back up, and that is a completely different life to having to take out a credit card or borrow money from someone that you really don't want to borrow it from. So how the hell do you actually even get there, right? Because £10,000, it feels like a really big number, especially if you're starting from zero or even if you've got a couple of grand in that account. Now, the mistake most people do is they look up at their 10 grand and they get overwhelmed at that point. And I get it. Because it's like telling someone to run a marathon when you've only jogged around the block before. So what I like to do is I like to break it down. And there's a couple of ways you could do this. You could break it down by numbers. So you could say £1,000, £2,500, £5,000, £7.5,000, 10 grand. You could do it like that. But you could also break it down to what you could actually afford that year and focus on it by year. So if that's only £50 a month, for example, well, you're going to be saving roughly around about £600 a year. It's going to take you longer, but you can achieve that this year. So instead of looking up at that number, you'd start at the £600 mark. I'm just going to focus on that this year. And then we're going to be able to talk about ways to increase that too. There are some fantastic ways by one, changing nothing, and two, bringing in a bit more income too, that we're going to discuss later on on this podcast. Now, if I said, I challenge you to save yourself a grand this year, well, you probably think, yeah, I could probably do that, right? That feels doable at that point. And that's the point I'm trying to make here. Once you've got that first thousand pounds, you're only then saving another 1,500 to hit that two and a half grand if we were breaking it down by numbers. Then another two and a half grand to hit five grand. Or if you're doing it by year, you're breaking it down by year and you're just hitting those steps. And each step feels achievable because you've already proven the first one. You can do that first one, and then it's about kicking on. You're creating positive loops around saving money. You're turning savings into a bit of a game with yourself. And one you can actually win. Each milestone gives you a very quick win. It fuels your motivation, it gives you the drive to kick on. And I do this with everything, not just money. I've got a one-year goal, a five-year goal, and an ultimate goal, all broken right down into smaller chunks, which I can do either this week, this month, in three months, or whatever that might well be. I need those wins along the way. They fuel me. I need that pat on the back. Well done, Sammy. I said this on a podcast the other day. I used to go to the gym and I genuinely thought I would prefer someone shouting at me, but I didn't respond to the shouting. And guess what I responded to? Oh, well done, Sammy. Yeah, keep going, mate. Funny that. We all like a pat on the back. Now, next up I want to discuss a spending plan. I want to make it easy for you too. A large part of saving comes down to your spending. Let's just be honest. And a large part of saving more comes down to overspending in areas that don't provide you value that you need to strip out. And I know what you're thinking here, he's gonna say the word budgeting. Boring! I know, I agree with you guys, all right? The reason most people hate budgeting is because they're staring at spreadsheets and calculators, managing categories and everything, and making mistakes over there, and having to go back and ripping it all up and your spreadsheet crashing, and there's nothing helping you understand what's going on with your money. No insights, no broken down by category to help you actually manage the smaller parts of your spending. And it feels like homework. And it actually feels very difficult to look at what you've done in those cases because you're having to go line by line, bank statement by bank statement, and the average person has 3.2 current accounts that they spend money through. And that could be joint accounts, personal current account, a spending account over there. And it feels like homework, right? That's one of the big reasons why I built Gains app. And yes, I'm just gonna do a little promo here. Basically, what you can do, you can connect all your banks in one place and it breaks it down, your spending, by category automatically for you. And you can actually talk to your money too. So you can walk along the street and go, How much have I spent on takeaways? Or ask it questions and get insights into where your money is really going without spending hours in a spreadsheet. On average, we're doing a budget between five and ten minutes. You've all got five and ten minutes. You all sit on the throne in the morning, right? It's budgeting, but without the boring bit. And it's giving you insights into your money that you can actually use. And there's something else that people don't think about, and that's cashback. And that's what I've built into gains. And this is where I really want you to stick with me, because this is where your savings, you can get to your savings goals a lot faster. Remember, I said that 600 pounds earlier in the video. If you're on 30 grand and you're spending that a year, which most people are, when you add it all up, that's roughly around about 700 to 1,000 pounds a year in cashback that you could be earning through an app like Gains. That's money going straight back into your savings. For your spending, that's that 600 pounds that you thought you were doing, and now you're doubling it, and now you're moving to your goals a lot faster. Over two, three years, it could be a couple of grand going towards that 10,000 pounds, coming from cashback alone. Now, how this works on gains is you simply log in. We have over 180 of the biggest retailers, everyone from Tesco to Amazon to hotels.com to Gymshark, JD, ASOS, they're all on there. And then what you do is you buy a gift card for that retailer and instantly you're credited cash back. So for example, if you're buying a £100 gift card for your Tesco shop and we give you 5% back as an example, you get five pound credit ticket into your Gains app account right away. And you can withdraw that money and pop it into your savings account. It is that simple. And when you go to the retailer, either online or in store, you simply scan the gift card or pop the code in and you can use that, just like you would when you're paying as normal. So whether you end up using Gains app or whatever you end up doing, please use cashback because it's literally on money that you're already spending. The way I liken this is let's say I've got one thing that's £100, and I've got the exact same thing over here for £95, the exact same thing, which one are you choosing? For 30 seconds of work, that's the difference, right? So the point is do a spending plan at least once. Know exactly where your money is going and be very honest with yourself. Move money away from things that don't provide you value and into things that do, including your savings. Once you've done that, you're gonna know exactly how much you can realistically set aside each month. So these numbers. So let's say you want to hit 10,000 pounds in three years. Right now you've got cash ISIS is paying roughly around four to five percent. Let's say 4.5% for this. At £260 a month, and that sounds like a lot, I know. Don't panic at this point. That's just the number if you want to do it in three years. You could stretch that to four years and it drops, and five years even less. That's the number you're gonna need to save if you're getting 4.5% on your actual money back from the bank or whoever you have, let's say your cash is or something like that, right? But this is where it gets really important. You know that money I said that you might be able to save. So let's say you've identified I could save £250 a month. Well, the most important thing is, especially if you struggled with savings before, habits take 90 days, roughly 90 days to form. Sometimes it's 120 days. So that's three or four pay cycles for most people. Now, if you can save that 250 pounds, please don't start there if you've struggled with this and you've dipped into savings, say, in your third week of the month, right? Start with 50 pounds. Seriously, and just do that for three months. Let that habit bed in, then increase it over time. This is the single biggest savings hack that you could possibly do, and that is automate it. Please automate it. Set up a direct debit or a standing order and get that money, leaving your account automatically the day on or after payday, so you're not relying on willpower or manually transferring that money out each month. I can tell you now exactly what happens when you do that. You convince yourself the little man in your brain or lady in your brain tells you that it's a bad idea and you should buy the new boots because you deserve it, right? When actually, when you did this and you identified your savings goal and getting that security net, that's what's most important to you right now. Imagine the feeling the new boots or the boiler breaks and you don't have the money because you kept buying the new boots, right? That's the difference. You find a way to spend it. So make it automatic, make it invisible, make it into a savings habit so it happens whether you think about it or not. Now, where do you put this money? Well, you've got two main options in your arsenal here, right? You have a high interest savings account or a cash ICER. Now, I prefer cash ICERs simply because everything you earn inside of a cash ISA is yours, right? 100% tax-free. With a high interest savings account, if you go over something called your personal savings allowance, which you will if you start building up a bigger balance in the future, you'll owe tax on the interest. With an ISA, that's just never a problem. So I'd just like to start there, keep it in one place. But if you're going to get an incredible interest rate, especially earlier on, you can always move that money around later on as long as you're keeping in with your allowances. Right now you're looking at around about four to five percent. If you're lucky, you could get above that on most cash ICEs or savings accounts out there. A little bit of digging, a look on Martin Lewis's money saving expert. He always has the best rates and always keeps them up to date. Much bigger team than me. Uh so yeah, definitely just look there. Okay. So this is where we can start to accelerate things. Now, I mentioned before I was £24,000 in debt. And if three years to get to your £10,000 savings goal, or even four or five years, depending on how much you can save, feels too long, this is what I did. Now, that £24,000 of debt, I cleared that in 18 months. I was never going to just do that for my income. It was literally going to take me about seven or eight years just to do it for my income, living like a complete pauper and just not enjoying life very much. And I was not okay with that. So I did something. I combined side hustles with my debt repayments. I did everything from freelancing in the evenings, utilizing the skills that I had for my work. I resold trainers. I bought stuff at car boot sales and sold it. I cleared out my garages, I cleared out my friends' garages for them and sold it. I did anything I could to raise some extra cash. And it just means putting a bit of your time into something. And you can bring in some money. Everybody knows they can, they just don't want to because it's requires a bit of effort, right? We're a lazy bunch, let's face it, we'd rather watch Netflix. But you can put your time to work. There's online surveys, there's website testing, there's focus groups, there's online focus groups. There's so many ways to bring in some extra cash. So if you want to get there faster, you can do that. And if you can earn an extra 200 pounds a month from your side hustles on top of your normal savings, well, you're going to get there significantly faster. It's the single biggest accelerator that you have in your power that most people ignore, guys. And that is the facts, right? You can either do it for your income and it's going to take you longer, or you can side hustle your way there, get there a lot faster. And it's then giving you a bit of growth mindset, right? It's giving you a little bit of get up and go. It's, you know, I'm looking for opportunities here. And later on, you could then potentially even funnel that money that you're making from your side hustles into your investment account and grow it even more. And that's what I do now. I still do a little few side hustles here and there. This business started as a side hustle, up the gains. It started, you know, I wanted to talk about money and I wanted to tell people about my experience. And it's turned into a business that I now run full-time, but I still do a little bit of side hustling here and there. I helped someone out the other day and earned 50 quid from it. It was the best bit of money that I'd earn. It was literally digging out some of their garden. I loved it. But I still do that now. And that 50 quid, I put it towards something. It's a massive factor in your play. So put some of your time to work, and I totally respect that. It's so much harder for people with parents, you know, little young kids and their parents, for example. I get it. You're going to be very time poor. So utilize some things which, you know, perhaps you can side hustle on your commute, or when you're taking a Sunday afternoon bath and you just need to decompress. I get that. Maybe you want to put that into play. Now, I totally respect you would still need time to rest and you want all those things in place. I get that. But you see what I mean, right? You have time if you want to make it. So I want to talk about the thing that derails most people along the way here, and that's shiny objects. You start saving and you're making some progress, right? Momentum's building. Then one day at work, someone books a holiday to barley, or your mate gets a brand new car, or there's a sale on and you convince yourself, I deserve a treat. And suddenly that £260 a month that's going into your account becomes £160 a month or £60 a month. Or you got four grand in there and you just wax it all on barley. It's supposed to be your security savings now. This is the keeping up trap, guys. Social media makes this 10 times worse because everybody's showing off their highlight reel. Nobody posts about their savings account. Nobody flexes their emergency fund. It's supposed to be for you, your security. If you want to try and save alongside that, what I would do is lower down the amount that I'm saving towards my emergency fund and use something called sinking funds. So I'm funneling some money off into a holiday pot or a new boots pot or whatever that might well be that you really want. So you're hitting both your shorter-term savings goals and your emergency fund at the same time. You can do this simultaneously. You just have to think about the length of time that that's going to have an impact on. Or perhaps you side hustle to be able to afford the flights to buy barley and you put your income towards your emergency fund. There are a multitude of different ways you can do this. You just have to accept this. But try not to get wrapped up in the fact that you need the new thing. I get it, life's from for living, right? We need memories, we need to make sure that we live. And who wants to die with a million-pound investment portfolio? I understand that. But taking care of yourself now and future you is important because remember, if that boiler breaks, you get made redundant, those are the things that are going to really have a massive effect on you. Trust me, the stress, look at this, tough paper around, right? Look at this phase. It really will make a big difference to your life. Okay. So you feel what like you want to be the sensible one while everybody's giving up and living it up. And I understand the trouble that comes with that, right? It's a battle that we fight most. People are broke that are doing this, right? They're financing the car, they're putting the holiday on a credit card, and they look rich. They are not rich. You are building something real. That's why you're still here, that's why you're still listening to this. They're building an illusion, they're building a highlight real. And if savings is your most important goal, you have to make it your most important goal, guys. Because once you've got that 10k there, then you have options that they don't. You know the numbers now. Now, the key point is when those emergencies happen, you are gonna need to move things around. So if you're investing money or you're putting money into your sinking funds and your emergency fund takes a hit, the key point is to get it back up. And that might mean that you still do the other things, still invest, still grow your sinking funds, and your emergency funds then need topping up back over time. So you're gonna move your percentages around to make sure that's happening. And if you want that security, because you're gonna feel it when you do get there, it's gonna make a massive difference, right? So you've moved out of the securing myself phase at this point, and you're into the wealth building phase, but that is fine. If it gets a hit, you wanna be building that back up, okay? So I want to talk about what actually happens in your head when you do reach this number, because it's not just about the money, it's what you actually get when you come to do this. You've proved that you can delay gratification, you've proved that you can stick to a plan, you've developed discipline that most people never ever build. And that discipline carries over into so many different areas of your life. It will be your health, your career, your relationships, because saving money is really about one thing, and that's making decisions today that benefit future you. And once you start doing that with money, you start doing it with absolutely everything. When you've got savings, you're in a position of strength and not desperation. You don't take the first job offer because you need the money. You negotiate better because you can afford to walk away from that job interview if you don't get the offer that you want. You don't stay in situations that aren't serving you. You take calculated risks because you've got a safety net, and maybe you start even thinking about starting your own business one day. Or maybe you go part-time to study something new because you can, because you can breathe easier knowing that whatever happens, you are good for a few months. And that's what 10 grand really does buy you. Not stuff, not status, peace. Peace of mind. So 10,000 pounds really just isn't a number that I've just plucked out of thin air. It's the freedom from anxiety of one bad month wiping you out. It's the ability to leave that job or situation, it's better sleep. And as we know, the research really does back this up. So the path to get there is breaking it down into smaller chunks, get visibility on your spending. Gains app will help you with that. If you want to, check it out. It's in the description below. You want to automate this, start small and build that good habit. Throw side hustles at it if you want to get there faster. Then once you've got it, lock it away. That's your foundation. You'll sleep easy at night money. And then once you do that, you might want to start thinking about investing and layering that on top. Now, I hope you've enjoyed this. The hardest part is getting started and getting that first pound going. The best podcast, the follow on from this, is coming up on your screen now. And I will catch you guys next week on the next one. It's been a pleasure on the Money Gains podcast. Take care.