Sally saves for her first home with Kaldi
Meet Sally. Sally is 23 and works in accounting. She has a pre-tax annual income of £30,000.
She moved to the London after university and has been renting in with friends in properties all over the capital. She has noticed how the price of renting has gone up over the years and its now costing over 40% of her monthly salary alone.
She’s wanted to buy her own home but hasn’t really got into the habit of saving regularly and only been putting into a savings account. Sally decides to save smarter and works out that she can conservatively put away £200 per month.
She could put it into her savings account where it earns 5% annually, and after 10 years will have saved £30,5131. But what if she used Kaldi to save for her deposit?
Last month, Sally made the following purchases at Kaldi merchants, and paid using Kaldi Scan & Save to get the best cashback rate available on the app.
- Groceries from Asda: £165
- Personal Care products from Boots: £40
- A couple takeaways from Deliveroo: £40
- Earphones from Curry’s: £35
- New bedsheets from Primark: £45
- Books from Waterstones: £30
- Dining out at Miller & Cater Steakhouse: £65
- Coffees from Costa: £20
- A chair from Wayfair: £150
- Food from M&S: £60
- Clothes from Boohoo: £35
- Trainers from JD Sports: £60
Shopping with Kaldi, Sally saved £27! At this rate she will have saved £324 in a year!
But here’s the kicker. Those savings were auto-invested into a global index fund she selected, earning a rate of 9%2 a year. Seeing how much better the returns are than her savings account, Sally decides to invest her £200 savings every month into the same index fund. What’s better is she’s got her mum and Granny onto Kaldi as well who having linked their cashback to her account to give an extra boost!
At this rate Sally will have the money for her house deposit by the time she’s 303, a whole 3 years quicker than if she’d used a traditional savings account.
3 years is a serious difference when it comes to the money saved by getting onto the property ladder. But what if Sally had kept on using Kaldi for the full 10 years it would have taken to save for the deposit with a traditional savings account? Thanks to the power of compounding, her Kaldi investment pot would be worth £49,3102. That’s nearly £20K difference!
1 Source: According to The Money Savings Expert savings calculator £200/month saved at 5% for 10 years will generate £31,334.
2 Based on the annualised average return of Global index funds.
3 Source: Based on Sally’s mother and granny both contributing £20/month to her Kaldi investments through cashback giving Sally a savings total of £267/month. According to The Motley Fool investment calculator £267/month invested at 9% for 10 years will generate £49,310, and for 7 years will generate £29,966.
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