To have a financial management thread?

[Cariadne]

I just wanted to share the news that after literally years of flying by the seat of our pants and running out of money with 5 days to go every month and having no saving of any kind, in the last 3 months my husband and I have managed to finally get our finances under control and sort our spending. We’ve saved more in 3 months than we did in the 3 years before that, and I finally feel like we are properly in control of our money.

I thought I would share the changes we have made, and also use the opportunity to ask others to share their money-saving / financial management tips! It might help someone else the way so much stuff online helped me.

Here are the main things we did:

1. Switched bank accounts, got £350 between us for doing so. Websites like moneysupermarket.com have these deals all the time and it’s literally free money. It was incredibly simple to switch.

1. Made a serious budget which sets out an annual amount for everything (from books to holidays) and divides it into a monthly amount we have to save, so that when it comes to paying for those things the money is saved from previous months.

1. Meal planning - our grocery spend has gone from about £130 per week to about £65 per week (including household products, cat food and cat litter) because we meal plan and eliminate food waste. We are also (for the next few weeks at least until it is done) having one freezer / store cupboard meal per week to use up what we have.

1. No takeaways. We now keep a couple of pizzas and curries in the freezer so that if the temptation strikes we have an easy alternative that is much cheaper.

1. Online cashback sites - again, free money

1. We have a weekly budget meeting where we list everything we’ve spent that week (don’t have to go into detail - just the amounts, and no need to divulge anything that comes from the ‘personal spend’ pot of the budget) and make sure we aren’t overspending for the month.

1. Packed lunch every day, never buying lunch while out.

There are probably others that I will remember and add. If anyone has any tips themselves, please share! For the first time in years, I’m not waking in the night sweating about money!

Thanks - great list. Number 2 is so important and what scuppered our budgeting efforts for years as I'd always forget things like annual bills or Christmas and then we'd be thrown off course that month or even for months after. Do you include a 'contingency' fund in your budget for things like appliance replacement, house repairs, car breakdown, unexpected vet bills etc? You might not have these every month or every year but things like that seem to happen more often than not to me!

I'd also add regularly reviewing and switching utilities, insurance providers, TV/phone/broadband deals to your list. You usually get a better deal for switching than staying with the same provider year on year so it's worth the short term administrative pain of switching.

If you have the cashflow and storage space bulk buying dried goods, cleaning products and pet supplies online or at supermarkets when there are deals on can be really good value for money.

Also other 'frugal' habits (which also help the environment) of avoiding buying too much new, and reusing what you have, or buying second hand. We apply this to books, clothes, appliances etc. where we can. And also try and 'treat' ourselves and family members more to experiences than material goods, so avoiding buying plastic tat for presents and giving tickets or days out or even favours for each other can be really nice presents and cheaper than more 'stuff!' (within reason of course, small DC are probably more in need of immediate gratification than adults)...

Mine is to have separate accounts for different things, which I appreciate may not work for everyone.

Main account for salary in, daily spends, food shop etc.

One for things like mortgage, council tax, insurance. Fixed payments over the month (or month put in for the annual insurance costs). Standing order to this account on the 1st. That account ticks over and can pretty much be ignored.

Another account for more variable bills and utilities. Standing order into that to cover the highest amount that can go out in a month, meaning there's always a bit spare for unexpected bills.

Savings account for car maintenance/house costs etc. Covers all big one-off expenses.

Holiday account. First half of the year saves towards summer holidays, then after that it goes towards christmas and the insane number of winter birthdays in my family

General savings account (not much in there at the moment)

Works for me, and I know that once all the SOs have gone out to those accounts, then anything left in the main account has to last me the month. It seems unnecessarily complicated, but once the SO and DD payments are set up, it makes budgeting so much easier.

Separate accounts is actually a good idea! It’s already made a difference to me just having money in a separate savings account (even tho I can still access it - psychologically it makes a difference!)

My DH and I are both signed up to YNAB (you need a budget) and it's totally transformed the way we manage our money. I pay for the app each month but I literally couldn't manage my life without it now. It hasn't necessarily saved me loads of cash but I am certainly so much more in control of my money which is very liberating! I recommend it to everyone I know!

Thanks 😁
I've got a couple more than I listed, but for other specific things. I slightly overestimate/round-up what I need to pay into them, and when a surplus builds up I either put it in the holiday account or treat my self

Ergh, apologies for the weird smiley

I have various pots linked in a building society account. I transfer money as soon as I am paid to cover car expenses (insurance etc), savings for holiday, season ticket and general house expenses so that there isn't a nasty shock when things blow up.
We also meal plan to a point and do online grocery delivery so it is easier to gauge the cost and can add/take things off over the week.

Love #2. Dh and I do that as well. Last time we bought a car we figured how much we thought we’d pay for it, divide it by the number of years we had to save for it, and divide that by the number of paycheques it would be. When the time came just wrote a cheque for it.