Money advice

[Psychgrad]

Hi, I posted this on the finance section but only got one response, was hoping to get more here. Here goes...

Please can you tell me how to save more, go on more holidays etc. My partner and I live in London and have fluctuating incomes which makes it hard to budget properly. I’d say we know that we will earn at least £40k a year and anything extra is a bonus. Some months we are extremely low and other months we have a false illusion that we’re earning loads.

We are thinking about TTC (we may even leave London in a few years for our home country) so really want to start learning how to budget before we have another human to look after.

The thing that puts me off budgeting is the lack of spontaneity, I’d be keen to hear from other people who enjoy a spontaneous meal out or a spontaneous weekend break but also don’t earn a whole lot. How do you do it? Is budgeting very rigid? I can’t imagine counting every single penny and wonder if it would be better to save a certain amount each month and live off the rest.
We have Monzo so we sometimes use the pots for our grocery budget, rent etc. I’ve also heard good things about the money saving expert’s spreadsheet.

Also what do you do if you have very unorganised parter? He will listen to me and budget his money but I can’t really police his daily expenditure can I? Like if he buys lunch or an odd coffee at work. Or am I wrong, should I be controlling every penny?

I do feel we have been sucked into the middle class spendy lifestyle of London, so we definitely eat out way too much. I’d rather eat out less and go on more trips away. Our rent is quite cheap for London so cuts there aren’t really possible. We don’t have a car but might get one soon (which I’m actually agains but my partner insists).

We both come from disadvantaged/ working class backgrounds so witnessed our parents relying on benefits and living pay check to pay check, This is all new to us. Just to give you context, my mother thinks we are rich.

No judgmental posters please, I’m really not in the mood, just asking for constructive advice from people who’ve been there and done that. As I said it would be nice to hear from people who have a spendy nature and live in an expensive city as people who are naturally frugal, introverted and living rural won’t understand where I’m coming from. Although I want to save, I also want to live and enjoy life!

Flipping well done to you for even doing this. It's really easy to fall into the same money patterns as we've seen all our lives. My only judgement is a positive one!
I/we find so much security and satisfaction out of using a budget. Fun experiences and spontaneity aren't ruled out, and when you get to do them, the appreciation and joy you get is enhanced because you know you're not spending money you haven't got, going deeper into debt. And something we (husband and I) discovered when we started is that it brought to light what it is that we enjoy - spending time together. Sortof went back in time to when we were first together and had a lot less money. A walk on a warm evening together, stopping at a shop to buy a magnum (ice cream not champagne ha ha), chatting, connecting, that sort of thing costs so little and yet brought the same enjoyment if not more than the £20 cocktails sat in a noisy bar....
We use a system called YNAB (You Need A Budget) and it's extremely easy to use. Once you get set up you can link your Monzo account to it and transactions will go in automatically. All the instructions will be on the YNAB site/app to get you started.
Then for money saving tips obviously there are tons of amazing tips online. You know where to look.
I think you're very wise doing this now, and honestly it's one of the best gifts you could give to a child is a financially responsible atmosphere to grow up in, which in turn will contribute to her/his quality of life as an adult.
Make sure you keep money for little treats like a mag that you enjoy and a bouquet of flowers, just so you don't feel all in-a-straitjacket-ish.
And when you have doubts and you get that urge to spend on STUFF ... Keep telling yourself your best memories will come not from having more STUFF around, but from time spent together and from having that underlying security of knowing you've got a handle on your money situation.

Sorry, more points you made that I ignored: no you definitely not micromanage your partner. Do this together. I'm the scatty one in our relationship, but it's trained me to be more aware, not in a miserable Scrooge way but in a teamwork way.
Other point. About your fluctuations in income: I think the way YNAB works it'll get round this

We’re both self employed, so I’m with you on the fluctuating incomes! And on the childhood experiences of money…

First things first - does your partner agree with you on how you prioritise spends? Would he rather eat out less and go away more? Can he rationalise his wish for a car, when you’re in central London and have fluctuating incomes?

If you’re on the same page; generally, it’s easy enough. If you’re not, it’s a nightmare. You don’t want to be policing everything he does, that’s a recipe for disaster, so you need to be generally pulling in the same direction.

On the TTC front, we made an effort to look at our spending and see where we wanted to cut back, and where we didn’t. We then saved a bit of a safety net, and put a few solid months into stabilising our income as much as possible, so there wasn’t wild fluctuations… and then we started TTC. I’m now nearly 13 weeks, and I’m glad we had that all sorted beforehand! It is possible to do babies “cheaper”, but it does depend on the experience that you want. If you want middle of the range stuff, it adds up to more than I’d expected - let alone fancier stuff!

My only advice is to do it one step at a time, make a plan and make sure you’re on the same page.

Hi op, budgeting isn't rigid, quite the opposite!!
I mean, if you know each month you have money for bills, food tucked away then you can spend £ on fun without worry?

• experience... Mid range stuff?

Do you mean classes or annual passes? That makes a lot of difference to be able to go places with small dc but you can buy fancy stuff second hand off ebay or baby sales?
Moses baskets etc... I've always got much nicer stuff than I could afford that way without spending ££.

Anyway, we put aside all bill and essential money, what is left goes into many different saving pots for loads of things, Xmas eg 50 a month, bday 50 pm, holiday 200 etc

It builds up slowly, each weekend we have x to spend on fun.. It's all broken down.
I never feel guilt spending when I'm out or worrying if a meal will Take us into od because that money is special allocated.

Another vote for YNAB. It’s really made a difference to how we think about money and our priorities, which has changed the way we spend.

Well, I wouldn’t put too much pressure on yourself, don’t compare yourself to others, work out what it is that you want to do and then work out how to achieve this. If, for example, you like camping, don’t feel you have to go on 5* spa breaks just because that’s what everyone else is doing. But equally, if you like eating out, don’t feel bad for spending your money on that rather than on something else like designer clothes.

We’ve done things like use Tesco vouchers for days/meals out and top cash back when buying online to make our money go further. And DH has an excel spreadsheet that he sets up our budget on lol!

Hello! I totally understand you! Firstly I would say analyze your Monzo accounts. Your spontanious expenses are coffees, meals, trips, tickets? Check how much you spend on that and put a cap on it. For example, I love coffee (I am trying to ease off now because I will start ivf soon), and I usually don't think twice of eating out especially when I'm out all day long. So, I put a cap on it. I created a pot and named it "imaginary pleasures", and everytime I would think "oh let me buy a coffee" and could avoid it, I would transfer the amount I would spend to the pot.

I know it's not too much, but it's a start. Also, every month I set aside some money for fun. Spontanious things like you've said.

I would say start small. With little tricks like that at first, and when you feel like this isn't enough, and it's easy for you, then go ahead and take the next step. Having spreadsheets and lists and everything from the start it didn't help me, on the contrary it overwealmed me and made me feel sorry for my self "Oh I'm never going to manage" etc..

Now, I'm much better at it, I have a handle of things (well better that before).

Sorry for the essay, I hope I helped. If you want I have more "tricks" like these that have helped me over the years.

Great advice everyone. As for YNAB, is it best to link that with our joint monzo or our personals as well?

To answer the question about my partner being on the same wavelength, he is quite introverted and hardly ever goes out but will never buy things second hand and loves his gadgets. I’m the opposite, love going out, going on day trips to beaches/ countryside etc but I am frugal when it comes to clothes, food shopping and beauty treatments. We sort of balance ourselves out- I’d say I’m better with savings but I also spend more if that makes sense.

What happens sometimes is that we will put money into pots for groceries, bills etc and then end up dipping into it because we need it for some unexpected bill, we have a dog so have had a few unexpected vet bills that insurance wouldn’t cover.

Another problem that we have since moving to London is when we sometimes go out with friends and say we’ll stick to a budget for the night but then rounds start happening which I hate because I don’t drink much or wurst still, someone will suggest to split the bill instead of paying only for what we ordered. Sometimes I’ll pick cheap things off the menu but when you’re splitting it with four people who’ve had steak it sends our budget out of the window. I’ve never had to worry about these things in other cities as it was just easier to live there and our friends were always money conscious. Our London friends spend ridiculous money and a lot of them earn just slightly above us. I guess I’ll need more of a backbone in future.

Look at moneysaving expert. Start with the budgeting section. Get the weekly email.

On the matter of the cost of coffee and lunches, this can be very costly.

A few quid every day is a hundred plus a month or over a thousand a year. That's the cost of a holiday for a couple.

Work out the cost of your essentials, plus savings for things like holidays and separate the money left over into your Monzo account to spend on a 'when it's gone it's gone until pay day' basis.

If you don't have loads of spare money, you can have day to day small luxuries like coffees or holidays but maybe not both.

YY to growing a backbone. Make it clear that you're on a budget an limiting what you order because you need to keep to a budget. Don't get sucked into paying for cheeky fuckers steaks when you had a pizza.

@IsabelHerna do you use a spreadsheet now? I think I already find it overwhelming and haven’t even started it. Love the ‘imaginary pleasures’ idea, do you use that money for future real pleasures or do you just put that into longer term savings?

I pay into a work place pension, my employer & the tax man adds a contribution as well, so long term savings

As soon as I am paid, I pay into regular savings

I have some premium bonds

I have some other savings

Generally, I am a saver, but there needs to be a balance between saving & spending.

I have just had a week on holiday in UK
It was worth every penny

Drive an old car that cost about 1.5 K

Yeah we’ll definitely get an old car if we get one.

When you go out with friends, make it clear at the beginning of the night that you wont be splitting the bill - just a simple “hi, were a bit skint tonight so if its ok with you we’re going to pay for our own drinks and meal” then ask the server to give you all separate bills.

I use a spreadsheet where I put in the amounts for all our bills broken down into a monthly amount. So for example things like house repairs or contents insurance that I pay for as and when or once a year also have a monthly amount. So for example if you have a dog, a car or a house you own you put £50 a month or whatever into the budget for that so you are building up a stash of cash for that. It can be worth pulling off old bank statements, say for the last year, and adding up where your money actually went as I found a surprising amount on food shopping!

We put money for these essentials into a bills account and pay a set amount in each month.

We then put money into pensions and savings, and I put money into a bank account ‘pot’ monthly towards a holiday.

Whatever is left after that is my pocket money to spend.

If you put your car purchase/maintenance/petrol/parking costs into your budget you can decide whether it’s worth losing your holiday or your bigger shopping budget or your spending on whatever you want money.

@Psychgrad Now I do. Not something too much, but yes I use them now. I found out that by printing the forms and having everything written by hand, helps me realise it better... I don't know how to explain it, but I "see" and "feel" the money better that way much better than when I was trying to do spreadsheets on my laptop.
Oh yes, my "imaginary pleasures" have helped me a lot! Initially I didn't do anything with that money. I just wanted to see how much I would spend in a month, 4 months, year etc. There were times that I wanted to go on a trip or something but tbh I was thinking "oh it's a same to spend that money, I will just save money specifically for that trip". This helped me, create other pots, and savings. It just started to put my mind in that "saving" mode.
So the imaginary pleasures, became a "pillow" in case I need anything, like an emergency or something crucial to my life. Like a baby :) I am going to use that money to fund my ivf journey (or part of it, we will see).

I think the YNAB is trying to charge me, I’ll have a look again and see if there’s a free option.