Who are the Secret Millionaires?
It’s you! HyperJar’s research found that the average person will spend around £1.2 million in their lifetime. And we’re not talking about fast cars or luxury yachts. Every weekly food shop, day trip, electricity bill and rent or mortgage payment adds up. This million compares to just £70,000 found in the average retiree’s private pension pot - and average savings of £22,000.
Imagine getting that £1.2 million when you were 18, and being told it had to last…well, forever. (And, for these purposes, let’s imagine you are a sensible 18-year-old). You’d be pretty sure to treat this million carefully and spend wisely. Deciding how much to spend on housing, holidays, food, travel, kids, pets. When you’d need to spend it. Who with. How you’d squeeze it for every last drop of value. But when it’s just trickling through your fingers every day, it’s very hard to think like this. The jaw-dropping stats in the Secret Millionaires report should help us to reframe they way we think about our everyday money - and see it as a huge opportunity for a more secure financial future.
How to save £1 million
From the ages of 18 to 80, you could make more than £1 million simply by making a few habit flexes and watching what and where you spend. There’s no need to give anything up. You don’t need to stop spending or spend less on luxuries like eating out and takeaways. You can even enjoy avocado on toast for breakfast every day if that’s what you like - there’s no avo-shaming here.
The principle is called spendonomics - the science of smart spending as a way to save. With just a few smart spending hacks, the report shows how it’s pretty simple to save £2,646 a year on your everyday spending. For Gen Z, this could mean an extra £1 million in savings if they start aged 18 but it’s never too late: iIf you start when you’re 35, you still have time to save more than £420k and from 55, it could be £126k.
Savings power, 18-80
What is spendonomics?
How does a 60% return on your money sound? That’s the annual gain from bulk-buying 10 everyday items instead of getting them one at a time, and a great example of spendonomics. From haggling to using discounts and cashback, spendonomics is the science of saving thousands by smart spending. In fact, if smart spending was treated as a separate financial category, it would be one of the easiest and most effective ways to build a more secure future.
Financial services tend to be inherently conservative about new ways to save and make the most of your money. By focusing on limiting your options and locking away your cash, the industry limits savings and investments to those who are wealthier or older. But anyone can spend smarter.
Report headlines
The Secret Millionaire report brings together the latest ONS reports, government and industry research papers and specifically commissioned surveys, to work out where we’re spending and how we can achieve the same quality of living for less.
A few more of our top findings:
- To match £2,646 in savings returns you’d need to lock away £52,000 for a year - and still have to pay tax on the growth. Alternatively, you’d need a pay rise of £3,500 to match the returns from smart spending
- Today’s 18-year-olds who apply easy spendonomics principles will see a lifetime return of over £1 million (with 5% interest compounding) or £164,052 (0% interest)
- It’s never too late to start smart spending. 35-year-olds can save £423k and 55-year-olds can be £126k better off
- Dog lover? The cost of pets is high! Owning 2 pooches for a lifetime is going to cost you £128,000!
- Bums vs. bank accounts: the gains from switching to own-label toilet roll can be beat sticking £1000 in a 5% interest account for a month
How to start spending wisely
The Secret Millionaire report breaks down how and where we can make these significant savings, from haggling to bulk-buying, avoiding FX charges to meal planning, and from opting for own-label groceries to taking up the everyday discounts on offer via apps like HyperJar.
See the full report here
The Maleficent Taxes to avoid
The report highlights the hacks that can make you a million. But there are some deadly ‘tax’ traps to avoid if you’re really serious about watching what you spend. The great news? These seven taxes are 100% avoidable, and if you can dodge them all you’ll be saving a fortune.
Debt tax
For most of us, some unsecured debt is unavoidable. If we assume a quarter of this is for things we don’t really need, there’s a £330 yearly saving on interest payments to be made.
Brand tax
Some brands are so dear to us that they make our world a better place. But there are huge annual savings on offer if you’re not wedded to a label - around £500.
Introvert tax
From not being paid back by friends and family to being too-scared-to-haggle - shyness not only doesn’t pay, it costs introverts £100s a year.
Impulse tax
Call it regret spend or impulsiveness, emotional spending is real for many of us. Planning more and feeling in control of your money should help curb this kind of spending, saving around £250 a year.
Analogue tax
Around a third of people in the UK have low ‘digital engagement’. This might be a lifestyle choice, but know that it’s costing you: most discounts and deals are now online or mobile only. Even taking typical digital discounts available in everyday discretionary spending categories like takeaways, eating out and trips to the cinema, there’s an easy £200 annual saving to be made.
Ad hoc tax
Buying little and often from local convenience stores might cut down on food waste, but it can cost you an additional £648 a year vs. buying from a bigger supermarket. And there’s a whopping £1000 a year to be saved when you buy in bulk.
FX tax
Millions of people are paying additional fees when they spend abroad, just for using their standard bank card. It’s a 2-3% tax that’s easily dodged.
Manage your million with HyperJar
At HyperJar, we talk about Spend Life Well. We think that doing a few simple things well with your money can change your finances and your whole outlook. There are just three habits that will make for a happier relationship with your money that we outline in our Moneyfesto.
Give your pounds a purpose
When you plan your money with specific things in mind, two good things happen. One, you’ll be less likely to have trouble paying for things when you need to – always a win. And two, you’ll feel better. More in control, more positive and less stressed about money.
Plan for the pressure points
There are things that happen most years – either expected or unexpected – which are going to be expensive. That could be Christmas, a summer holiday, an insurance policy, or an emergency, like a broken freezer. But if you treat these pressure points as planned-for expenses, not nasty surprises, you’ll take a lot of stress out of the financial calendar.
People power
Humans are social animals – doing stuff with others is what makes us tick. And we’re generally a good influence on each other. If you have a financial goal which you share with other people, you’re more likely to achieve it. We feel more motivated and accountable.
See the full report here
How to spend better with HyperJar
Once you’ve made the decision that smart spending is for you, HyperJar helps make it easier to organise, control and share your money - and adds in integrated rewards with the country’s best known brands. We’re the only account to offer cashback vouchers - think gift cards for self-budgeting that give you instant money back - straight into a spending app. No waiting and no points. Plus, open our app and you can find exclusive offers and discounts with the places you shop everyday .
There are rewards and money back for the thousands we spend each year, without the need for a rash of different apps or digging around for random coupons in kitchen drawers.
Any UK resident over the age of 16 can open a HyperJar account without a credit check and once you have an account, everyone gets the same cashback rates and rewards.
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