Tips for being less crap with money?
Discussion
Hi all,
I feel like this comes down to a lack of common sense, but I'm absolutely terrible with money, living paycheck to paycheck and ending up with a grand total of bugger all at the end of each month.
I'd like to say it's because I go clubbing 5 nights a week and have to pay to insurance and finance a German super-saloon but in reality I make it to the pub a couple of times a month, my car is paid for and the insurance is about 50 quid a month.
I've tried using a Monzo account to track things and manually budgeting, but bits and pieces just seem to add up, and before I know it I'm skint 2 weeks before payday.
I know I'll get the usual "you just need to spend less" responses, which I agree with, but has anyone had any luck with any particular budgeting methods?
I feel like this comes down to a lack of common sense, but I'm absolutely terrible with money, living paycheck to paycheck and ending up with a grand total of bugger all at the end of each month.
I'd like to say it's because I go clubbing 5 nights a week and have to pay to insurance and finance a German super-saloon but in reality I make it to the pub a couple of times a month, my car is paid for and the insurance is about 50 quid a month.
I've tried using a Monzo account to track things and manually budgeting, but bits and pieces just seem to add up, and before I know it I'm skint 2 weeks before payday.
I know I'll get the usual "you just need to spend less" responses, which I agree with, but has anyone had any luck with any particular budgeting methods?
I had this a while ago, no matter how much I earned the money just seemed to evaporate. I changed a few things that really help, and still help today even though I'm saving aggressively. Generally all of my changes came down to taking the guess-work out of it, and committing as much cash to things as remotely possible as soon as I received it.
The cash trick is a really good one, take some money out on payday (your budget for non-online purchases) and use that instead of cards throughout the month.
If you haven't done already, get all your direct debits out on the first of the month - or as close to it as is feasible. Knowing exactly what you have left can really help. I used to have my DD's spread all across the month, and occasionally I could get lured into thinking I had more than I did. Nowadays everything comes out on the 1st (including savings/ISAs and my cash withdrawl) and there's now no room for misinterpreting the balance.
I spend a lot of money online, so for a while I would transfer amounts to my paypal account each month on payday. Again, because it's out of the current account straight away you know where you stand - and any purchases of crap from eBay/Amazon must come out of that balance. This was the internet version of the cash withdrawal thing.
The biggest thing, is cutting out lunches/coffee's etc. They add up big time and you never notice them when you're enjoying them, you just normalise them and as a result you won't really miss them when you cut it out. I was regularly spending £6/day on subway despite working from home
I'm now doing things properly from a supermaket shop, saving tonnes of money and possibly even eating better.
The cash trick is a really good one, take some money out on payday (your budget for non-online purchases) and use that instead of cards throughout the month.
If you haven't done already, get all your direct debits out on the first of the month - or as close to it as is feasible. Knowing exactly what you have left can really help. I used to have my DD's spread all across the month, and occasionally I could get lured into thinking I had more than I did. Nowadays everything comes out on the 1st (including savings/ISAs and my cash withdrawl) and there's now no room for misinterpreting the balance.
I spend a lot of money online, so for a while I would transfer amounts to my paypal account each month on payday. Again, because it's out of the current account straight away you know where you stand - and any purchases of crap from eBay/Amazon must come out of that balance. This was the internet version of the cash withdrawal thing.
The biggest thing, is cutting out lunches/coffee's etc. They add up big time and you never notice them when you're enjoying them, you just normalise them and as a result you won't really miss them when you cut it out. I was regularly spending £6/day on subway despite working from home
I'm now doing things properly from a supermaket shop, saving tonnes of money and possibly even eating better. As others have said, you need to find out where you’re spending money outside of set monthly bills, and the see if you can cut down
- downgrade your food shop to include supermarket own brand, rather than branded food.
- make your own lunches and dinner from scratch.
- cut down on amount of times you go to the pub, or amount you drink
- see if you can get cheaper utilities, phone contract, tv etc. Cancel unneeded gym, sky etc
Take what you earn each month. Take away the cost of set bills.
Divide what you have left by 6. This number is what you can spend each week. Track it in monzo.
That gives you 4 weeks of spend, plus 1/3 to set aside for savings.
- downgrade your food shop to include supermarket own brand, rather than branded food.
- make your own lunches and dinner from scratch.
- cut down on amount of times you go to the pub, or amount you drink
- see if you can get cheaper utilities, phone contract, tv etc. Cancel unneeded gym, sky etc
Take what you earn each month. Take away the cost of set bills.
Divide what you have left by 6. This number is what you can spend each week. Track it in monzo.
That gives you 4 weeks of spend, plus 1/3 to set aside for savings.
I found having a separate "spending" account has helped massively. My salary is paid into my main account and all direct debits, standing orders, subscriptions, etc, are also paid from this account.
As soon as I get paid, I transfer £X into the spending account leaving enough in my main account to cover the debits and any contributions to savings I want to make. Anytime you look at your spending account, you'll know how much you've got left to play with until next payday. Simple but effective.
I noticed you said you have a Monzo account - I use this for my spending account as the pots are a great way to have even greater oversight / control. e.g. I put £X in a petrol pot, £Y in groceries pot, etc. This way the balance in my Monzo account (excluding pots) is exactly how much I know I've got to play. I then use IFTT so petrol and grocery purchases are automatically taken from the relevant pot.
I've been doing this for about a year, and whilst I'm not particularly short of or bad with money, I feel I have an excellent overview of my monthly spending.
As soon as I get paid, I transfer £X into the spending account leaving enough in my main account to cover the debits and any contributions to savings I want to make. Anytime you look at your spending account, you'll know how much you've got left to play with until next payday. Simple but effective.
I noticed you said you have a Monzo account - I use this for my spending account as the pots are a great way to have even greater oversight / control. e.g. I put £X in a petrol pot, £Y in groceries pot, etc. This way the balance in my Monzo account (excluding pots) is exactly how much I know I've got to play. I then use IFTT so petrol and grocery purchases are automatically taken from the relevant pot.
I've been doing this for about a year, and whilst I'm not particularly short of or bad with money, I feel I have an excellent overview of my monthly spending.
Having paid your bills/standing orders, everything else you spend in cash. No cards for anything. Take cash out, maybe £50 at a time thru hole in the wall machine, and pay by cash. If you have to pay by card, perhaps something online, make a note of the amount and put the note, with the cash to cover it, in an envelope. And use that to pay your credit card bill.
By paying in cash, you'll be able to think "f
k me, I took £50 out this morning and I've only got £15 left" and know where that £35 went. And people spend less with cash. Handing over £8 for a coffee and a bun in Costabucks is more painful than waving your card at a machine.
By paying in cash, you'll be able to think "f
k me, I took £50 out this morning and I've only got £15 left" and know where that £35 went. And people spend less with cash. Handing over £8 for a coffee and a bun in Costabucks is more painful than waving your card at a machine. Le-Mons said:
I know I'll get the usual "you just need to spend less" responses,
Earn more 
Honestly without figures nobody can advise. If you don’t earn much it’s easily done.
I’ve always used the cash method still do now at 40+ £100 a week spends in cash and see how far into the week or the next week I can get. It’s far too easy to burn through money now a few clicks on your phone and you could literally buy anything from anywhere.
Nationwide has a facility to text warn you if you breach your desired account balance i.e. say you set text warning at £25. I keep a low balance in my current account due to the non-existent interest rate, so this warning function is perfect for catching those unforgotten spend. If I see such text, I simply login via the app and transfer over funds from my saver account.
You could apply Granhamst advice together with this account balance warning (assume your bank has this function). Leave your weekly amount on your current account, and channel all your spend using just your current account card/contactless. This ensures you have a complete audit of your expenditure online available for your review. Other recommend control spending via the cash amount, but with cash, I find it's easy to lose track of the trivia expenses (which all add up!). Assume you set £25 text warning with your Bank, you are notified when you breach your balance limit so you can quickly assess your financial position. If you receive this text warning on day 6/7, that's pretty good, but if on day 3, then you need to drill down your expense (no excuse as you the audit trail online!) to find exact cause to your overspend. Despite setting aside a weekly budget, your real life weekly spend could fluctuate, so you may receive the text warning earlier than expected e.g. £80 petrol on week 1 = monthly petrol spend. Maybe this approach would instill some form of accountability and discipline to curb your spending habit (or not
)?
You could apply Granhamst advice together with this account balance warning (assume your bank has this function). Leave your weekly amount on your current account, and channel all your spend using just your current account card/contactless. This ensures you have a complete audit of your expenditure online available for your review. Other recommend control spending via the cash amount, but with cash, I find it's easy to lose track of the trivia expenses (which all add up!). Assume you set £25 text warning with your Bank, you are notified when you breach your balance limit so you can quickly assess your financial position. If you receive this text warning on day 6/7, that's pretty good, but if on day 3, then you need to drill down your expense (no excuse as you the audit trail online!) to find exact cause to your overspend. Despite setting aside a weekly budget, your real life weekly spend could fluctuate, so you may receive the text warning earlier than expected e.g. £80 petrol on week 1 = monthly petrol spend. Maybe this approach would instill some form of accountability and discipline to curb your spending habit (or not
)?Thanks all for the tips, the 'cash' idea is definitely one I've been considering, and I'll put it into action once I get paid again (I'm paid on the 21st of each month, which is a weird one).
Also agreed on using 'pots' in Monzo, it isn't a function I've used, but I can see the benefit in keeping track of individual spending where cash isn't an option, like self-service petrol stations.
Of my wage, I'd say around 60-65% is unavoidable spending (bills, food etc), so I should have a decent chunk to put into savings/generally enjoy, although it never seems to end up that way!
Also agreed on using 'pots' in Monzo, it isn't a function I've used, but I can see the benefit in keeping track of individual spending where cash isn't an option, like self-service petrol stations.
Of my wage, I'd say around 60-65% is unavoidable spending (bills, food etc), so I should have a decent chunk to put into savings/generally enjoy, although it never seems to end up that way!
paulrockliffe said:
chomer75 said:
I then use IFTT so petrol and grocery purchases are automatically taken from the relevant pot.
Please elaborate on this? Not sure what you're doing exactly, but it sounds interesting if your'e using IFTTT to move money around in Monzo.https://ifttt.com/applets/YWw8tFCm-redeem-grocery-...
https://ifttt.com/applets/U2JCqtHi-redeem-transpor...
The second one would probably take money out of my petrol pot if I ever (god forbid!) had to use the train or bus.
I used to be terrible, spent most of my student loans on crap and it took me about ten years to get out of a debt cycle.
Things that really helped me turn it all around-
-Create an excel spreadsheet of your monthly in/out, update it daily and keep a close eye on what goes in and where you are spending
-Don't carry cash, for me it was a lot easier to spend cash without thinking about it, rather than use a card (this goes against what others have said, but it's very personal)
-Make your lunches, i used to be a serial lunch buyer and was easily burning through £100 a month on lunch food when i was only on a £16k salary
-take a look at your outgoings and see what you are willing to cut back on or lose? Cheaper or sim free phone contract? Ditch one or two monthly subscriptions?
-Limit yourself with a "spending/pocket money" budget each month... I give myself about £100 PCM to spend on whatever crap I like, beyond that it has to be a justified need or expense
-Earn more money, or look at a second stream of income on the side, I work a full time job earning £40k ish, but for the last 5 years i've also had a part time job on top of this a couple nights a week, it's only an extra £100 or so a month but over the years its paid for quite a lot of bits and pieces
-Sell your old crap on ebay, look for bargains elsewhere that you can flip on ebay, i probably make £50-100 a month just flipping ebay stuff or selling bits and pieces off.
Ultimately, you'll get better with money the more you focus on it and pay attention to where it's going, and it'll improve naturally.
ETA - around 50% of my monthly salary goes on cost of living and essentials such as rent/bills/food/monthly costs, i'm now debt free and saving about £800-1000 a month, so you should be able to turn things around unless you're heaped in debt or living outside your means.
Things that really helped me turn it all around-
-Create an excel spreadsheet of your monthly in/out, update it daily and keep a close eye on what goes in and where you are spending
-Don't carry cash, for me it was a lot easier to spend cash without thinking about it, rather than use a card (this goes against what others have said, but it's very personal)
-Make your lunches, i used to be a serial lunch buyer and was easily burning through £100 a month on lunch food when i was only on a £16k salary
-take a look at your outgoings and see what you are willing to cut back on or lose? Cheaper or sim free phone contract? Ditch one or two monthly subscriptions?
-Limit yourself with a "spending/pocket money" budget each month... I give myself about £100 PCM to spend on whatever crap I like, beyond that it has to be a justified need or expense
-Earn more money, or look at a second stream of income on the side, I work a full time job earning £40k ish, but for the last 5 years i've also had a part time job on top of this a couple nights a week, it's only an extra £100 or so a month but over the years its paid for quite a lot of bits and pieces
-Sell your old crap on ebay, look for bargains elsewhere that you can flip on ebay, i probably make £50-100 a month just flipping ebay stuff or selling bits and pieces off.
Ultimately, you'll get better with money the more you focus on it and pay attention to where it's going, and it'll improve naturally.
ETA - around 50% of my monthly salary goes on cost of living and essentials such as rent/bills/food/monthly costs, i'm now debt free and saving about £800-1000 a month, so you should be able to turn things around unless you're heaped in debt or living outside your means.
Edited by designforlife on Wednesday 4th December 16:48
TwigtheWonderkid said:
Le-Mons said:
Of my wage, I'd say around 60-65% is unavoidable spending (bills, food etc),
Buying food is unavoidable, but how much you spend on it is hugely variable. Unless it really is an essential you forgot to put on the list.
Better still online shopping - that way you don't even have to go to the supermarket
Getting to grips with your income and expenditure for the first time can seem a very daunting and boring task. Once you’ve tackled it though, it is liberating and very simple to keep on top of moving forward.
Just put in the time now to really understand where the money goes and it will pay dividends long term.
Just put in the time now to really understand where the money goes and it will pay dividends long term.
1) Create a spreadsheet so you understand committed spend per month (mortgage, rent, utilities etc)
2) Have a savings account / ISA, on pay day put what you think is reasonable in there
3) Setup a spending account and move 'income - (committed + savings)' into there when you get paid
I found having a clear idea of what my current position was i.e. what the balance in my spending account is at any point in time helped me control things better.
2) Have a savings account / ISA, on pay day put what you think is reasonable in there
3) Setup a spending account and move 'income - (committed + savings)' into there when you get paid
I found having a clear idea of what my current position was i.e. what the balance in my spending account is at any point in time helped me control things better.
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