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Right time to get the sensible hat on for a change and depart from seeking advice on what titanium bike jewellery I should buy next!
The misuses and I have been pretty poor at managing our cash over the years. Rarely amass any savings to talk of and somehow get from month to month with the c/card ever increasing! Have 2 young sprogs now so thought it might be time to get with it and actually manage what little cash we have!
Anyone been in a similar position or fancy themselves as an aspiring moneysavingexpert? What works for your household?
Failing that please send £5 or wiggle vouchers to …………… :-).
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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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?
There is that, but if you already have the phone/contract you may as well make it work a little bit for you.
🙂
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
Are you eligible for any help? We were surprised to find that we were as my wife only works part-time and top up help with child tax credits etc really have helped us.
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.
Just call HM Customs and Revenue and you can do it all over the phone. They may need some details from you but it is all quite easy and if you are due anything they do seem to pay very promptly too.
mastiles I've mentioned on here before about not having any desire to own possessions other than those I need.
Fair enough - it is a good place to be - I wasn't having a go, just trying to tease a little maybe 😉
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.