Your best tips for being better with money
Discussion
Hi all,
After a few years not worrying much about money, partly because I was young and stupid, partly because I was doing OK and it didn't matter too much, the time has come for me to plan my finances and budget better.
I thought this thread may come in handy to a few of us on here who will be a lot worse off due to new changes in the way some tax rules for freelancers are being enforced in the very near future.
The things I have started to do which have helped me not notice my pay cut are;
Taking my lunch to work
Use my coffee machine at home wherever I can instead of buying expensive coffee (I realise this requires a bit of initial investment!)
'piggybanking' I.e. Separate savings accounts for things like car expenses, house expenses (boiler services, leaky taps, paint for the living room, whatever) , Christmas, holidays, next years car insurance, and as soon as I get paid everything gets accounted for so I have a true and accurate picture of what's actually left instead of guessing and getting it wrong!
I have also started a pension, a bit late to the party but at 28 I still have a bit of time.
I would like to say I have 6-12 months living expenses aside but that is purely just a goal at the moment and seems extremely far away. I would also like to start over paying the mortgage but I need to balance this with thinking about saving for home improvements etc so we enjoy living in the house.
After a few years not worrying much about money, partly because I was young and stupid, partly because I was doing OK and it didn't matter too much, the time has come for me to plan my finances and budget better.
I thought this thread may come in handy to a few of us on here who will be a lot worse off due to new changes in the way some tax rules for freelancers are being enforced in the very near future.
The things I have started to do which have helped me not notice my pay cut are;
Taking my lunch to work
Use my coffee machine at home wherever I can instead of buying expensive coffee (I realise this requires a bit of initial investment!)
'piggybanking' I.e. Separate savings accounts for things like car expenses, house expenses (boiler services, leaky taps, paint for the living room, whatever) , Christmas, holidays, next years car insurance, and as soon as I get paid everything gets accounted for so I have a true and accurate picture of what's actually left instead of guessing and getting it wrong!
I have also started a pension, a bit late to the party but at 28 I still have a bit of time.
I would like to say I have 6-12 months living expenses aside but that is purely just a goal at the moment and seems extremely far away. I would also like to start over paying the mortgage but I need to balance this with thinking about saving for home improvements etc so we enjoy living in the house.
There was quite along thread a few months ago which was started by a poster who needed to radically cut his outgoings & that is full of good advice about how not to waste money:
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Shop at Aldi/Lidl not Waitrose. Don't buy expensive coffee from Starbuck/Nero. Make your own lunch (see the Huel thread). Don't buy anything today - go back to it tomorrow & see if you still want/need it.
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Shop at Aldi/Lidl not Waitrose. Don't buy expensive coffee from Starbuck/Nero. Make your own lunch (see the Huel thread). Don't buy anything today - go back to it tomorrow & see if you still want/need it.
I've posted about You Need a Budget (referral link) before but it's really helped me go from feeling like every month brought some unexpected and unbudgeted expense to being well ahead of things.
It's a little like your piggybanking approach but it doesn't matter where your money is, the software basically has you allocate your income to any number of pots (I have pots for everything from the TV licence to a pot for replacing my wife's glasses). Then you can draw down from these when you need.
The app is good too, so you can update spending as you do it.
It's a little like your piggybanking approach but it doesn't matter where your money is, the software basically has you allocate your income to any number of pots (I have pots for everything from the TV licence to a pot for replacing my wife's glasses). Then you can draw down from these when you need.
The app is good too, so you can update spending as you do it.
Edited by theaxe on Monday 16th March 12:31
Drezza said:
Common sense, live within your means. If you have no savings sell your expensive car, buy a banger. Don't buy any luxuries only essentials. It really isn't hard.
May I suggest not a banger, regular breakdowns can cause unexpected costs.Research for a reliable car and buy wisely (consider how long you may keep the car and is that model susceptible to higher than Avg depreciation), paying a little upfront on a second hand car could save a big amount further down the line.
I've never racked up huge debt on cc and loans but for many years in my 20's lived way beyond my means..always overdrawn on bank accounts etc I earn more money now but it took a few significant events to change my behaviours..the wake up call as it were.
I try to do/stick to the following now:
- Buy 'stuff' when you actually need it e.g: clothes
- I drive a banger that I've owned 10 years..will be replaced this yr as getting a bit ropey now but never thought I'd hold onto a car that long..it has saved me a sh*tload overall Vs if I'd bought a newer car sooner or leased etc however I spent a good few £k's on my first car..utter stupidity as in the end I got peanuts for that car on resale..I lost on depreciation both on the car and the items I bought/fitted to it. It is what it is. I also feel I could of spent way less on a first car but again lesson learned.
- I've owned my mobile around 2 years(not a top end flash one but android and does the job) my sim is a tenner a month
- I have a small amount on debt on a 0% cc..am paying down aggressively to get this cleared asap..yes I pay 0 interest but I'd rather clear the decks and keep debt to a minimum
- I invest a small % of monthly take home into a tracker fund..small enough so I don't feel it and not too sizeable that's it's beyond my personal risk tolerance when markets head south..as they are now!
- poncey coffees really do add up but I still struggle on this and buy 1/2 coffees per day during the week..it's something I need to improve and I take a few substitutes to work..though they only work some of the time
- I also try to bring lunch into work now on at least a few days ..really helps my saving rate by doing this
- holidays...I've calculated that Ive probably spent £20k net across all my holidays..some were more pricey destinations.This is a tricky one as some fantastic memories but deffo could of done with less of those big hits back in the day!
- I made some silly splurges a few years back e.g: expensive watch that gets no wear time Vs my cheap g shocks which I prefer to wear now..hence I'm considering selling the watch and any other excess stuff I no longer need and which is saleable
- work pensions - make sure you get the maximum employer contribution, esp for higher rate tax payers if you can lower your tax liabilities using a pension it's a no brainer
Finally the above may or may not help...I don't judge anyone who spends differently, each to their own. For me age also changed perspective and goals...I'm not in my 20's so can't really compare my spending habits to someone who just came out of uni etc. You gotta have some fun in life right but try to be measured and smart about choices..long term game and all that!
P.s: Try to track your expenses...if you don't have an idea where your money goes how can you make any meaningful improvements
I try to do/stick to the following now:
- Buy 'stuff' when you actually need it e.g: clothes
- I drive a banger that I've owned 10 years..will be replaced this yr as getting a bit ropey now but never thought I'd hold onto a car that long..it has saved me a sh*tload overall Vs if I'd bought a newer car sooner or leased etc however I spent a good few £k's on my first car..utter stupidity as in the end I got peanuts for that car on resale..I lost on depreciation both on the car and the items I bought/fitted to it. It is what it is. I also feel I could of spent way less on a first car but again lesson learned.
- I've owned my mobile around 2 years(not a top end flash one but android and does the job) my sim is a tenner a month
- I have a small amount on debt on a 0% cc..am paying down aggressively to get this cleared asap..yes I pay 0 interest but I'd rather clear the decks and keep debt to a minimum
- I invest a small % of monthly take home into a tracker fund..small enough so I don't feel it and not too sizeable that's it's beyond my personal risk tolerance when markets head south..as they are now!
- poncey coffees really do add up but I still struggle on this and buy 1/2 coffees per day during the week..it's something I need to improve and I take a few substitutes to work..though they only work some of the time
- I also try to bring lunch into work now on at least a few days ..really helps my saving rate by doing this
- holidays...I've calculated that Ive probably spent £20k net across all my holidays..some were more pricey destinations.This is a tricky one as some fantastic memories but deffo could of done with less of those big hits back in the day!
- I made some silly splurges a few years back e.g: expensive watch that gets no wear time Vs my cheap g shocks which I prefer to wear now..hence I'm considering selling the watch and any other excess stuff I no longer need and which is saleable
- work pensions - make sure you get the maximum employer contribution, esp for higher rate tax payers if you can lower your tax liabilities using a pension it's a no brainer
Finally the above may or may not help...I don't judge anyone who spends differently, each to their own. For me age also changed perspective and goals...I'm not in my 20's so can't really compare my spending habits to someone who just came out of uni etc. You gotta have some fun in life right but try to be measured and smart about choices..long term game and all that!
P.s: Try to track your expenses...if you don't have an idea where your money goes how can you make any meaningful improvements
Edited by VR99 on Monday 16th March 13:39
Edited by VR99 on Monday 16th March 13:41
There are/will be lots of useful tips here, but here's another.
Before you spend, think about if you need to:
- What value will you actually get from spending the money?
- If you need to spend, is there a cheaper alternative?
- What greater value can be achieved through not spending immediately, is there a longer term savings goal? peace of mind? value in pension provision?
Nothing wrong with spending money now, but if it's at the expense of something else then the something else needs to be considered - even if it's something as boring as retirement.
Before you spend, think about if you need to:
- What value will you actually get from spending the money?
- If you need to spend, is there a cheaper alternative?
- What greater value can be achieved through not spending immediately, is there a longer term savings goal? peace of mind? value in pension provision?
Nothing wrong with spending money now, but if it's at the expense of something else then the something else needs to be considered - even if it's something as boring as retirement.
Monzo may help. You can track your spending trends and restrict what you spend on certain things.
https://monzo.com/
https://monzo.com/
I'd create a budget tracker spreadsheet.
List your expenses. Take your income and work out how much you spend on bills, etc. From the remainder, work out a sensible budget for variables like shopping, pub money, etc.
Use you online banking to copy and paste the actual figures into a monthly sheet and have a summary sheet with conditional formatting to highlight any overspend. The more you use it the more you can see that you are approaching your budget which should help you think OK, I'll not buy coke and hookers this month as my spending limit is close. I'll get them next month instead.
The conditional formatting highlights overspend in red automatically.
something like this: (arbitrary figures and expenses but you get the idea.)
List your expenses. Take your income and work out how much you spend on bills, etc. From the remainder, work out a sensible budget for variables like shopping, pub money, etc.
Use you online banking to copy and paste the actual figures into a monthly sheet and have a summary sheet with conditional formatting to highlight any overspend. The more you use it the more you can see that you are approaching your budget which should help you think OK, I'll not buy coke and hookers this month as my spending limit is close. I'll get them next month instead.
The conditional formatting highlights overspend in red automatically.
something like this: (arbitrary figures and expenses but you get the idea.)
Drezza said:
Common sense, live within your means. If you have no savings sell your expensive car, buy a banger. Don't buy any luxuries only essentials. It really isn't hard.
This, it is purely common sense just don't spend as much. Trouble is people want some miracle way of saying money while keeping their leased car, £60 iPhone contract, gym membership, lunch out every day, Friday night in the pub and Saturday out for a meal.Hint, not doing any of the above will save you a fortune.
It's a bit like the people who want to lose weight without changing their diet or doing any exercise.
t - ask yourself if your life would be that bad without it.Before signing up to things with a temptingly affordable monthly DD, multiply each one by 12 and see how much it will cost every year and how much you really need it.
Always pay your CC bill in full every month.
Add up how much you've spent on mobile phones, I suspect 9/10 people don't actually need one.
If you have a weakness for cars - this is PH after all! - try to buy from auction, or at least privately, on 100K miles and for cash.
Save. The more you save the sooner you can retire.
Always pay your CC bill in full every month.
Add up how much you've spent on mobile phones, I suspect 9/10 people don't actually need one.
If you have a weakness for cars - this is PH after all! - try to buy from auction, or at least privately, on 100K miles and for cash.
Save. The more you save the sooner you can retire.
toon10 said:
I'd create a budget tracker spreadsheet.
List your expenses. Take your income and work out how much you spend on bills, etc. From the remainder, work out a sensible budget for variables like shopping, pub money, etc.
Use you online banking to copy and paste the actual figures into a monthly sheet and have a summary sheet with conditional formatting to highlight any overspend. The more you use it the more you can see that you are approaching your budget which should help you think OK, I'll not buy coke and hookers this month as my spending limit is close. I'll get them next month instead.
The conditional formatting highlights overspend in red automatically.
something like this: (arbitrary figures and expenses but you get the idea.)
Do suppose somehow I could have a copy of that spreadsheet?List your expenses. Take your income and work out how much you spend on bills, etc. From the remainder, work out a sensible budget for variables like shopping, pub money, etc.
Use you online banking to copy and paste the actual figures into a monthly sheet and have a summary sheet with conditional formatting to highlight any overspend. The more you use it the more you can see that you are approaching your budget which should help you think OK, I'll not buy coke and hookers this month as my spending limit is close. I'll get them next month instead.
The conditional formatting highlights overspend in red automatically.
something like this: (arbitrary figures and expenses but you get the idea.)
ZOLLAR said:
Drezza said:
Common sense, live within your means. If you have no savings sell your expensive car, buy a banger. Don't buy any luxuries only essentials. It really isn't hard.
May I suggest not a banger, regular breakdowns can cause unexpected costs.Research for a reliable car and buy wisely (consider how long you may keep the car and is that model susceptible to higher than Avg depreciation), paying a little upfront on a second hand car could save a big amount further down the line.
Don't buy a car on finance. I own my cars and look after them. I have never been stranded or needed rescuing and all our cars are over ten years old. One is 38 years old. I admit they can go wrong though......
£200 monthly saving on PCP or lease starts going a long way to pay for repairs/ maintenance.
Maybe I am lucky, or maybe I look after my cars?
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