[Closed] How do you manage your money??

Work out all bills for month, pop it into an account just for bills, rest in another account to do as i please, food, biking stuff etc, seems to work for me. Always put an extra £50 in the bills account for any surprises, or bike bits, or just to save,

Write down everything you spend money on for a month - no matter how small the amount. Then see where you're spending the cash and you might be surprised by how much more you spend on some things that you originally thought. You can then decide if you want to cut back on some things.

Take your entire monthly wage and pay it direct to Tesco(other supermarkets are available)!
That's what we do 3 sprogs here.

spend it all quick!

"pretty poor at managing our cash over the years"

huggis is your name Gordon Brown by any chance?

Not sure about money management, but I think of everything I buy in the amount of hours/weeks work that its going to take to cover it.

Agree with writing it all down, ideally in a spreadsheet. Wife and I are paid into a joint account, out of which comes a monthly allowance each, which we use to spend on our own things, like bikes. Joint pays for all the boring stuff: food, cars, utility bills etc.
The size of the allowance depends on current salary and under constant review (by me at least). Seems to work as we paid off the house about 10 years early (hence allowance went up!).

I'm currently a student, so my finances are out of the window.

As a rule, when I'm working, I don't buy stuff I can't afford, and I pay off my credit card every month. As I'm a student, it's become more along the lines of only buying things I absolutely need, and trying not to accumulate debt.

My bike is much the same as when I bought it 5 years ago, and by far the best thing I've ever done for my bike spending is to stop reading bike magazines. They are there to sell you things, pure and simple. In reality a new this or that isn't going to make you a better rider.

A lot of people seem to go shopping pretty regularly and cycle through clothes etc. quickly. I'm of the opposite school of thought - I'll only go to the shops if I absolutely have to, because I've worn stuff out.

Very boring but just check your last few bank statements but make sure you can account for cash withdrawals.

I earned a decent wad soon after uni and only managed to save a tiny bit. Soon after travelling (left the well paid job) I was earning far less but managing to save more. No real skinflinting - just more careful.

Oh and pay off any loans as a top priority - interest payments are literally money in the bin. They may seem "manageable" but they add up to a terrible amount. Lesson learned when I bought a new car (while in that job) and paid silly interest on it...

Now just spend less than we earn and save what we can - simple. I think.

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http://www.thesite.org/homelawandmoney/money/cashflow/topmoneysites

For us this works...
All our money goes into our joint account (salaries, working tax credits, child benefit etc) so we generally have more going into the account than we spend (just). All our monthly spending (supermarket shops etc) is paid for on our cash-back credit card then paid off IN FULL every month. With it being cash-back we can expect to get around £100 in January which is an added bonus.

We also overpay into our (flexible, no penalties) mortgage account every month so if our credit card bill is particularly high we can just take some of the overpayment back. Given current interest rates it is financially better for us to overpay the mortgage than put it into a savings account as we can take it back whenever we wish anyway and the hope is we can trim a few years off the expected repayment date.

First of all i'd spend a month or 2 recording every penny you spend. Yes it is nerdish, and a pain but they you'll be able to see what you're spending your cash on.

You'll be able to see what is necessary spending - basic food, bills, etc

Or money that just gets wasted - spending £5 a day everyday on lunch at work.

After that draw yourself up a bit of a budget, and try and stick to it.

First thing to do if you are in trouble is to cut up all of your credit cards, and just live on cash, as its easier to see what you're actually spending rather than just using plastic money.

I've always made the decision to only buy stuff I can actually afford, I don't eat out regularly, I don't go on expensive holidays, I don't buy new stuff constantly and I don't go on the 'bay in the evenings.
I find that helps somewhat.

Ohh and if you have an iPhone there are a few free apps around to help you manage your money. I recently put all our income/outgoings into one and I can now see exactly what we have as spare money each month.

holding on to you money is as easy as losing weight it's all about balancing the equations caloriesin<caloriesspent same as moneyin>moneyspent pity so many people seem to have trouble with both.

Pay mortgage and bills by DD preferably from a seperate bills account then setup a standing order for the day after payday to move more than enough money to cover it all into your bills account. Decide now how much spending/food money you can manage on and remove whats left of your wage 2 days after payday from your current account into your savings. Forget the PIN numbers for bills and savings account so you cant tap into them on a night out/impulse purchase.
Oh and cut up your credit cards.

Self employed wife not working and two kids.
As cashflow is sporadic I don't ever pay by direct debit i.e if I get paid late or not at all for months I wont get charged.
No credit cards at all, I just use my debit card.
No HP or loans for anything, if you can't afford it don't buy it.
Total monthly outgoing including mortgage, council tax and all utilities £400 exact

I got married, now have no money to look after. Simple and effective.

Ohh and if you have an iPhone there are a few free apps around to help you manage your money.

Does one of them tell you to sell the thing and buy a cheap phone on PAYG? 😉

Making all the bills go out on the same day (preferably about a day after being paid) by direct debit has helped a fair bit. Plus my wifes wages go into a seperate account which is used purely for holiday and car costs, that seems to work quite well too.

I still don't understand where the money goes though. We have no credit to speak of, we don't smoke or eat out, our holidays are generally fairly cheap affairs and we shop at ASDA. Bizarre.

I do have a sneaky suspicion that we regularly subsidise my wife's more poorer family members but I have no proof of this.

As everybody else says work out what comes in and what goes out.

Total income - (monthly outgoings - desired savings) = Disposable

huggis, I can really reccomend getting a First Direct joint bank account. (seems very easy to manage to me)

Pay both your salaries into a joint account and have all the bills come out of this, then set up three more accounts. His / Hers and Savings.

From the joint make a standing order into saving.
From the joint make a standing order into his (your monthly money)
From the joint make a standing order into her (her money)

Don't touch the savings or the joint account 😯

Does one of them tell you to sell the thing and buy a cheap phone on PAYG?

🙂

Total monthly outgoing including mortgage, council tax and all utilities £400 exact

I wish mine was that low....... mine is four times that but includes £350 per month childcare 🙁

I do a spreadsheet everymonth, updated weekly for spends, has a budget on it.. and a target for savings... its always the exceptional/unexpected items that break the budget though.

I do DDI's from a seperate account on a set day each month. My money pays all the bills, food and day to days like petrol, clothes, etc. The good lady does holidays and treats.

I have a DDI set up to a savings account thingy and any large commissions go to reducing the mortgage. Best advice I can give is spend less than you earn and don't get credit - Never credit it always ends in tears and costs a fortune.

400 a month oldgit?? My council tax, electricty and gas bill are around that, I live in the wrong place I'm sure of it!!

I wish mine was that low....... mine is four times that but includes £350 per month childcar

Total monthly outgoing including mortgage, council tax and all utilities £400 exact

Your mortgage must be small!

Your mortgage must be small!

Yeah, but his c0ck is huge - look you can see him waving it around.

😉

130 council tax, 94 gas & water, 29 phone & broadband, 21 water. And forgot the 57 for various insurances.
Have been paying four times the going rate on my mortgage, but just decided to pay the 126 it should be for a bit whilst work is quiet and my missus gets better and re trains. If she starts earning again were going to go a litlle bit mad.

Total monthly outgoing including mortgage, council tax and all utilities £400 exact

Wow, I can't imagine how many shiny bike bits I would have to buy if my outgoings were in that area!
Still, at least I don't live in london or they would probably be twice as much as they are.

Anyway, to answer the original question, I add up my required spending, subtract that from my earnings and spend/save the difference as I see fit. Not sure why you'd do it differently unless you have significant money for investments (which I don't).

mastiles_fanylion - cheers some good advice there. Not sure how to do a health check of my tax situation to see what help is available. Good spy on the iPhone apps – been looking for an excuse to justify getting one ……… oops! 😉

mastiles I've mentioned on here before about not having any desire to own possessions other than those I need. Wasn't always like that, I went from three cars to two then just the one and I haven't died and it's funny how people assume your well off if you have more because I'm certainly better off with less.

Oh and cut up your credit cards.

This is definitely the best advice I ever had! If do, you have to spend what you earn and no more - no HP, no credit. I ran up a credit card bill a few years ago when my wife went back to college and money was a bit tight - probably about 2 months net pay, but still a lot when you work out how long it would take to repay it.

For us, I put 1500 a month straight into the house account that covers the mortgage and all food and bills. If I can I also put some in savings early in the month and then the rest (which after petrol isn't a lot!) is mine. It doesn't leave me much for shiny bits but if I really want something I save up for a couple of months, or sell something on ebay.

I have a credit card with a low limit for things like flights or small internet shopping, for the protection more than anything else.

It works a treat.

There are some great discussion boards at www.fool.co.uk on this stuff - dealing with debt being the most popular

Some of my work colleagues moan constantly about not having any money - although they always seem to be able to afford 2 fortnight long holidays on the other side of the world every year, eat out 3 or 4 times a week, extend their houses and redecorate all the time and also buy flash cars.
...and then have a go at me because I've bought a new frame or bit for my bike, or maybe gone for a meal at, say a Michelin 2* restaurant (which I might do once or twice a year).
I think maybe my expectations are somewhat different to theirs.

oldgit - agreed. It's not the size of salary that matters, it's what you do with it.

I know people on £100k+ a year who have naff all savings. I know teachers who own their house and seem to live the life of Riley simply because they've been sensible.

I noticed this weekend how many people are desperate to let everyone know how "well off" they are - hot weather yet they still wear jeans and blazers (WTF is this trend about BTW?!!), over-loud voices in pubs shouting about "yachts" and "incomes" and the like and many other examples.

How about ditching the status cr4p and living your own life I say!

Not sure how to do a health check of my tax situation to see what help is available.

mastiles I've mentioned on here before about not having any desire to own possessions other than those I need.

I just switch balances between credit cards and play the lottery every time there's at least a double roll-over, I figure I'll win before I go bankrupt. The lottery win is also my pension plan and endowment shortfall fund so I'll get everything sorted in one hit.

First step: Be born into a frugal family

Second Step: When you [u]start work[/u] set up regular standing orders to savings account(s), don't spend it all and don't live for pay-day like a lot of people (even with good pay) do. Don't be too flash (it's an arms race)

Third Step: Marry a woman who isn't into 'hobby shopping' and is careful with her cash.

I've no idea how you actually get out of debt once it has happened though..... It would presumably involve massive cuts in expenditure as well as re-paying the loan

You're doing a very wise thing Huggis. My wife and I ignored these matters for a long time and it came back to bite us. I still don't know where all our money goes and I've given up asking.

I noticed this weekend how many people are desperate to let everyone know how "well off" they are

Indeed, being someone who [b]knows[/b] how great they are without needing status symbols also helps 😉

Like many others on this thread we have a bills account which I transfer a set amount each month to cover our bills plus a bit of "emergency" funds. Her account is used for her spending as well as the household shopping. We have a couple of savings accounts (one for a lump that we don't spend from at all and one that acts as savings / slush fund for occasional extravagences) and make sure we put at least something into the savings account each month. My account (what's left) is used for mortgage, community tax, fuel and general treats / shopping / eating out / take away's / adventure races / bike events. There's not usually much left at the end of the month. Fortunate that Mrs BC has gone along with the generally more frugal lifestyle and doesn't find the need to own 73 pairs of shoes, or 36 handbags etc. Sometimes wonder how it is that people seem to have lots of new shiny things regularly as well as "expensive" holidays etc. I guess some are just a lot better off then we are but some are living well beyond their means and it will come back to bite them at some point in the future. I personally can't face having that sort of situation so we actively plan to avoid it.

Another thing to do is go through all your expenses and ask whether you need them or could you cancel them (even temporarily)? Also review how much you are paying and se if you can move and save (for things like electricity etc). Do you have a Sky subscription? Could you cancel/change the plan?

We did just that and saved something like £100 a month I reckon. Things we changed:
Sky subscription (got rid of movies and sport)
Changed our gas/electricy suppliers
Changed broadband/phone provider
Reduced our LoveFilm subscription level
Changed our house insurance (this had a HUGE impact - we almost halved our premium)

I am also about to put a hold on pension payments and overpay more into the mortgage account as well because, after nearly 20 years of paying into it, I am seeing no real gains but can see huge benefits in paying off the mortgage early (then I can consider other ways of planning for retirement).

Geronimo first step, third step +1.

Strangely when I had a bigger business and was on a cracking salary I was also at more risk of loosing everything.
So I went back to simpler business and easier life.

Your point about image and status symbols amuses me, a few years back Barclays commercial offered me a loan for a car, I remember thinking I could buy the Audi RS4 for that and everyone would think I'm doing well, but in reality it would never 'actually' be mine, it would be losing money and I'd be paying it back for a fair while so I'd actually be worse off.
As my old mum says the only thing that maters is your health.

One Rule:

In

Vs

Out

Simples...

I must admit though only recently have I wound everything in, and it's just so nice to sleep at night knowing whatever happens workwise interest rates etc nothing will be a problem.

I started with a version of this: https://www.pearbudget.com/spreadsheet

Tweaked it slightly to be more applicable to me (less flexible than the original, but based around what I know I spend each month).

*Everything* goes in the S/S (and has done for the last 3 years). Get receipts for every transaction (especially withdrawing cash) and every couple of days empty out the wallet and update the S/S. Really easy to track exactly where your money's going and where you can afford to cut down on stuff.

Has helped me a lot - I had around ~5k of credit card debt a couple of years ago, now I've got savings set up and a sensible monthly budget. Plus an emergency holiday/forks fund 🙂

wow thanks for all the good advice and wisdom!

Samb - I started with a version of this: https://www.pearbudget.com/spreadsheet <

Also interested to hear opinnions on whether it is worth paying for advice i.e. going to an IFA?

Also interested to hear opinnions on whether it is worth paying for advice i.e. going to an IFA?

unless you get a personal recommendation, I would stay clear. And definitely don't use the advice from your bank! Its probably not their thing anyway.

A practical tip I had which was really useful was to write down everything I spent, no matter how small, for a week. Much like writing a diet sheet, its amazing where all the money really goes and it certainly focused my mind. I used that as a base to calculate how much I needed to get out in cash each week to cover petrol, sandwiches, coffee, nights out, etc.

Using these two things I cut out the silly excesses and after a few weeks of literally not having any money left for the last 2 days, it made me so much more careful.

As has been said, a high salary certainly doesn't mean that people are in less debt, and those that are, find it much harder proportionately to cut back on 'what they deserve because they work so hard'!

some great advice there, esp from MF. I would simply add (and I know I sound like a miserable old b'stard for saying it but) that half the trouble is alot of people simply cannot understand that if you ain't got the money you can't have it. New clothes, gadgets, better car, white goods, furniture, DIY etc are rarely urgent and it won't hurt to defer for a few months or even years.
Buying an iphone whilst still carrying any credit card debt is just plain bonkers and totally wrong priorities, pay off some off your mortgae, say 20%, before spending more on doing it up or replacing the kitchen or bathroom. Obviously valid exceptions to each of my examples will exist but the gist of my argument is right. My bro in law and sister have just retired at 50 with a pretty decent pension saved up (self funded not employer paid) despite never earned that much and inheriting zilch. How? They lived like students most of the time (no kids admittedly), great holidays, nice but modest house, no car, no crap, no waste. All the under 35s at work are up to their eyes in debt but think nothing of having a gym memberships (run round the park!!), 2 foreign holidays a year, enough clothes to start a shop, a new car every few years and so on. Don't spend what you ain't got. And always pay off debt before anything else.

There are variants of it mentioned here, but the simplest and most effective method I've found is to "pay yourself first". That means set up a standing order every month just after pay day to siphon off money that dissapears into the spent ether. Some economists recommend 10-20% of every bit you earn, to ensure you will retire early and with a full coffer (compound interest is most effective the earlier you start, so tweak based on that). The key is that under no circumstances is this money to be touched, regardless of how much of an emergency of the day you have -- there will always be things that at the time seem urgent, but you cannot break this one rule. Periodically when the money has built into a reasonable pool, invest it in some vehicle. Keep it diversified, and there are reams of advise on strategies for that like no more than 5% in one entity, no more than 20% in one market/mechanism, etc.

If you want more shiny bike bits then set up "pay yourself first" account #2 which can have slightly relaxed regulations 😉

This has always seemed to work for me because I never get used to having the extra income. It's never "in my posession" long enough to feel it's loss, and I never considered it when taking on necessary debt like a mortgage.

My mates take the piss outta me but since i landed my (then girl friend) wife with the news i needed a £2000 loan to pay off debts at 18yrs old, i have lived on 'pocket money' ever since.

I want some money i ask for it. I want to buy something, i ask for my cash card and hand it back at the end of the day. We dont have much disposable income atm with childcare costs and her working part time but in a few months we will be £350 better off per month and at 34 i only have 15yrs left on my mortgage and an endowment maturing in 10yrs. Hoping to be mortgage free by the time i am 45.

We were worried about the economy last year. There were redundancies at my work. We had a bit of savings but a holiday would have cleaned them out. My wife wanted a holiday, my kids wanted a holiday, i wanted a holiday. We didnt go on holiday.

If I don't buy this will I die? If yes buy if no don't. Do that for a while and you should save a bit.

Hoping to be mortgage free by the time i am 45.

Good luck with that

If I don't buy this will I die? If yes buy if no don't

I have bought a spear, and some matches. 🙂

Stop looking at bike websites if you need to save money, I don't think they help.

And don't buy an iPhone just so you can use money saving apps.

This is way too topical for my liking, me and the wife have been going through the process of trying to budget, plan and generally scrape up the funds to get through each month as we seem to have hit the wall. The means to the end is pretty much as we feared from what i've read, the only fly in the ointment is that i can live without the new shiney stuff and beans on toast for tea two or three times a week is no great hardship...no it's the fact she will have to work more hours which bites as the only opportunity she has are every weekend!!! Bye bye biking and climbing then..lets just hope it's not as bad as my pessimism is.

All the above seems sensible to me. I would add:
1. Go thru all your stuff and sell what you don't actually use or need. I've made around £1,000 in the last couple of months emptying my cellar of old bike kit I'd swapped out or stopped using
2. Buy what you know you need and want, not what your peer group does or magazines/media/everyone else wants you to
3. Avoid friends/other halves who are status driven and expect you to be the same. They tend to choose expensive places to go out/want expensive presents/holidays etc. In any case friendship's based on values and deeper stuff IMO
4. If you buy a lot of bike stuff, go to the classifieds here... usually top quality kit but dead cheap

Why did you say that tiger?

Edit - My endowment is not linked to my mortgage (Repayment) so the endowment (Which has a minimum payout promise)is a bonus. Pretty likely i will have no mortgage by 45.

Make a shopping list BEFORE you go shopping. And stick to it!

Definitely worth listing everything spent. I asked the other half how much she reckons we spent on the credit card for shopping etc. every month - she guessed about half of what it actually was. Though she said half the stuff was 'one-offs' - car service, etc. etc. but when I said every month had £x of 'one-offs' she started to realise you need to include them in totals.

A couple of tough months, then if you can get into a position whereby you pay off the credit card in full (you can set the DD to take the full balance a month which focuses the mind...) it'll be better.

Hoping to be mortgage free by the time i am 45.

I cleared mine last year - nice to know that I only have household bills to worry about - got a baby due soon so good timing I suppose.

I haven't read the rest of the thread however you have to think twice before you buy stuff. Do you need the morning Costa Coffee at £2? do you need to buy that bike magazine every month at £4.30 which just wants to sell you stuff? Do you really need that T-shirt? New bike part? or are you just buying it as "it's a bargain". you have to think twice about stuff. Look at your food shop, are you buying crap that you don't need? can you scale it down, ie you don't need those chocolate biscuits every week, just now and then for a treat?
do you have expensive TV packages (Sky) get rid of it? expensive contract phone, get a SIM only deal.
Get the debt off your credit card now, you are getting ripped off every month on interest. If you can manage a CC get one with cash back then pay the full cash back every month. Start a DD to put £100 a month into a savings account, then if you get a pay rise up it by say £50 or £100 as you won't notice the money. It soon builds up and can be left there long term or tap into it if you fancy a treat, ie a holiday.
Any spare cash, look into overpaying on your mortgage, the other best debt to get rid of ASAP. But have to check on your mortgage you aren't limited to X £'s overpayments of they will charge you.

Do you know exactly what comes in and out of your account? Do you both work FT or is the Ms PT because of kids. you both need to have the same attitude to money and getting rid of debt or it won't work! especially if you have only 1 joint account for everything.

Mr MC and I have joint acc for everything to do with house/bills/car etc, then seperate for our own clothes and fun stuff, that way he can't moan at the 20th handbag and shoes I've bought this month, and I don't complain when he buys a brand new motorbike every 3 years.

I came out of uni with lots of debts, primarily because I was young, immature and stupid but at 22 suddenly realised I didn't want to be in debt and struggling all my life and started doing all of the above to get rid of it. 5 years later no students loans everything is paid off and I'm comfortable. Do what I want but I'm careful not to waste money unnecessarily.

I have bought a spear, and some matches.

You could have made the spear and what's wrong with rubbing 2 sticks together. I don't think your showing the required dedication here.

Make a shopping list BEFORE you go shopping. And stick to it!

We do the pocket money account thing.

My money goes into one account and covers all the rent, bills, food, perol, and filling the pocket money accounts.

Hers goes into another account where it covers childcare, then is split between the short term savings (wedding) account and the long term savings (deposit for a house) account.

Always take a list shopping and do a "monthly big shop", not while you are hungry.

We make packed lunches for work and days out.

Cooking decent meals is cheaper than eating rubbish food.

Don't smoke.

If know I'm going out I take my budget for the night with me in cash and leave my card at home, i reckon that saves me a fortune

Just earn plenty.

Then you don't have to budget.

coat on, runs away

All you need to know is here:

[url] http://www.lovemoney.com/news/grow-your-wealth/boost-your-income/10-reasons-wealthy-people-have-all-the-money--4958.aspx?source=1000450 [/url]

My advice is simple. Work out what you need for the month and leave that in your account, transferring EVERYTHING else to a savings account. I do this, and know that whatever’s left in the account is left for me to spend should I wish to. In the meantime the savings pot grows and because I never see it, I don’t spend it. It’s helpful to put in a building society account which is a right pain to get to (only open the 3rd Thursday of the month etc) so that if you really need the money you can get it, but there’s no chance at all of you spending it on a whim.

Additionally, I have just one credit card (mainly for buying plane tickets and like when you want that additional protection) which is automatically swept out of my account each month. I have no debt other than mortgages, and pay for cars etc in cash.

As well as all of the above, 25% of what I earn goes into 'one-way' savings (essentially pension fund) which I couldn't get at even if I wanted to. That money's gone before I ever see it; I only ever look at what I get as a take-home on the payslip.

I have only ever bought a new car once (and that was when I worked for a manuafacturer, so an appropriately huge discount), I don't smoke, I rarely eat out, and I've not bought myself anything shiny and bike-like in the last year. Both the family cars have well over 100k on them, but they're well looked-after and will last a good couple of years yet.

I've never had Sky, don't have a mobile in my own name (a work one seems to cover me perfectly well), and I tend to buy stuff like iPods only when the previous one has died.

This probably makes me sound like a pious penny-pinching miser, but the reality is that I don't want to work past 60, and in order to have the sort of retired life I want then I'll have to work hard for the next 15 years to achieve this.