To ask how you change your mindset when it comes to money

[isitjustmine]

Really looking to change my financial situation this year but I'm really struggling with actually changing my mindset when it comes to spending.

The temptation to spend is ridiculous and I have no self control whatsoever. Can't ever seem to say no to a takeaway, a meal out, clothes, other treats etc.

AIBU to ask how to change? It seems impossible

I am naturally a tightwad which is the biggest thing, but things that help me even more are:

1. automatic savings - on payday, savings go out just like all my bills do.

1. Savings I can't see. I have accounts that I don't even look at (different providers). I more or less forget they exist, but they get monthly deposits.

1. A "fun fund". It's an account that is specifically for pissing up the wall on whatever stupid thing I want. Mostly it just rolls over but it's there whenever I want it. Budgeting for it is the point though.

There is a book by Cath Kelly called 'How I lived for a year on a pound a day'. It's diary style book of a woman's experience doing just that, with lots of handy tips along the way. No jargon or complicated formulas - very readable. Highly recommended. I try to re-read it and do the £1/day thing every January as I tend to have overstretched at Christmas and it gives my mindset and finances a bit of a reboot.

One of the rules she lives by is to make sure that she doesn't spend tomorrow's pound. Eg, if something costs £1.50, she can carry today's pound into tomorrow and buy it then, but she won't buy it today unless she has carry-over from the day before. Obviously £1/day is extreme, but you could set a daily budget and try to stick to this rule. Quite often you won't bother going back for whatever it was or you'll have forgotten about it by the next day anyway!

Good luck!

Give yourself weekly pocket money.
Seriously!!

I have 3 bank accts - 2 current accounts & an instant access savings account

Current Account 1:

• All income into this account
• All direct debits & standing orders from this account

Work out exactly how much you bring in, and exactly how much goes out (bills, insurances, rent, car costs etc)
(I use a spreadsheet for this so it converts easily to year/month/week)

The leftover amount is disposable income.

• set a sensible amount for weekly pocket money (this is to pay for all non-dd or standing order things such as shopping, petrol, treats, hairdressers, meals out etc)
• any extra over from this can be saved

When you've worked out your weekly spend & save amounts then set these up as weekly standing orders from your 1st current account to go into your 2nd current account & your savings account

I have found that by doing a weekly set pocket money amount, I don't spend nearly as much as I did before
If I run out of money on Weds, I've only 2 days to wait until I get 'paid' again on Friday - so it focuses my mind on what I'm spending day to day but I don't have to go too long with nothing (if that makes sense?!)
Any money I have left on a Thursday night, I transfer straight into my savings before Friday 'payday'.

I always try to have a buffer in my savings of £100, so never go below that unless I absolutely have to - every week I manage to save a regular amount as well as an odd few pounds that I didn't use from my weekly spending money.

F

Get lots of bank accounts that you can easily access and see (I have about 8 Halifax accounts and move money between them on the phone app). Then organise your spending into pots e.g. bills, personal spends, holiday, house savings. Start to put small amounts in. It feels good as the money builds up (no matter how slowly). Decide what you value spending money on the most and what is actually a waste. For me, I don't buy lunch / coffee out but do treat myself to takeaways more regularly. I don't often buy clothes but spend on beauty as a monthly treat. Another good tip I've had is if you want to buy something, take a pic and write down cost etc, then wait 2 weeks and see if you still want it.

I've got one of those apps that rounds up your spending to the nearest £ and saves the extra change for you, it adds up pretty quick. Just gotta resist the temptation to withdraw the savings

I have several online bank accounts with one bank. Wages go into one account and all the bill direct debits/standing orders come out of that account. Money I need for food goes into another account and spending into another.

Iv no credit cards

I'm naturally quite a skinflint and even for me there's some great ideas on this thread.
I enjoy overpaying the mortgage, I have spreadsheets so I can see what a difference the monthly/annual overpayment actually makes. It's really motivating.
One small thing we do is have some naice ready meals in the freezer (Cook or similar), so we can have a curry without getting takeout. If you get the meals when they're on offer its less than half the price of a take away. It's not the cheapest way to eat, but it is cheaper.

@1foot2feet which app do you have?

@isitjustmine I use one called Tandem but Plum is just as good, they're all the same format

I downloaded a budget app - not sure what it’s called but the icon looks like a wallet. I enter every single last thing I buy - it’s got categories but you can add your own and it adds them up for each month. It really makes me think twice about buying something or picking up a meal when I’m out and about. After splitting up from my exH I felt really financially vulnerable so I saved 5000€ in 2019 and I plan to try to do the same in 2020

I honestly think that to begin with you just need to force yourself.

I’ve always been crap with money but last year made myself start budgeting and stop burying my head in the sand. I’m still not great but we always have enough to pay the bills!

If I see something I would like to wear and buy, I picture in my mind it sitting in a crumpled heap on my bedroom floor.
Also, putting it into the washing machine. Would it wash OK or be a pain in the ass.
It helps to take the "buy me" shine off it. Advertising works and its not necessarily the traditional ad, it can be more subtle than that and show you a lifestyle or image you want to portray. Picturing a crumpled heap can remove that veneer.

Same technique for any treat foods. Usually consisting of a combination of fat and suger. I picture in my mind the constituent parts of lard and sugar mixed in a bowl. Not so appitising then.

Also, I try to bring a bottle of water from hime everytime I leave the house. Saves me being tempted by a nicer drink out somewhere.

I'm similar, and DH and I can both have urges to splurge. I was made redundant in March and it's been a hard transition to one pay!

But we are getting there.

We have a spreadsheet of bills and known out goings.
We have a budget "each" for a night out or for buying what we want. We have a budget for our DDs classes and her clothes. We have a weekly shopping budget.

What's left after that gets split per weeks in the month. Which is then our "fun" money.
Lunches, take aways, days out etc all come out of that.

So anything we spend has to come out of something! If we over spend on food shopping it has to come out somewhere else. If we overspend on our personal budget it has to come from our weekly. Etc etc

Once you start to think of it like that, and it meaning you might be making yourself short you actually start to ask yourself, do I really need this? How will I pay for it?

We check our account everyday and everything gets out on the spreadsheet.

I can also recommend you read "get rich lucky bitch" it's mainly aimed at women running a business but some of the lessons etc may help you rethink how you few
Money.

Read Rich Dad, Poor Dad by Robert Kiyosaki and The Richest Man in Babylon by George S Clason. Both are short reads and excellent for financial mind set and lots of investors credit them for inspiring them when they started out.

Definitely recommend some podcasts - Dave Ramsey is great for getting out of debt and changing mindset, 'Bad With Money' series 1 is funny and entertaining and a good place to start. There are also some great YouTube channels. You need to pinpoint why you want to reduce your spending/save - mine is that I want a financially secure future for my family. Then reduce your bills as much as you can, budget for things like car repairs, Christmas, boiler services - we add on £150 a month for this and leave it in our 'bills' account so it's there when needed. Then save for your emergency fund/retirement/house deposit. Whatever is left you can spend on treats, clothes etc.

Can anyone tell me how to download the Dave Ramsey podcasts?

If you have an iPhone you will have a purple app called podcasts and you just click on that and use the search button to find the show. He also now has his own app you can download on the App Store.

A notebook would work just as well and can be carried around with you.

Draw a line down the middle, each day of the month at the edge of each row. On the left, list everything that is set to come out (direct debits etc). On the right put your salary and any other income in the relevant dates.

Work out the balance between the two and write it at the top of the page in pen.

As you spend each day, add in into the left hand side and keep a total in pencil next to the pen written amount. Make sure the pencil amount never goes above the pen amount

^

This needs to be taught in schools.

Dave ramsey

What i usually do is:

-keep a money diary and write everything you spend for a month, then have a look at it and see where you spent recklessly.
-UNSUBSCRIBE from ALL emails re clothes and make up, promotions, etc.

• ask yourself: DO I REALLY NEED THIS? Usually the answer's no, I promise.

I had a lightbulb moment about 5 years ago, I decided to treat our finances like a business wanting to make as much profit as we can. So income less outgoings equals profit.

• Can we maximize income without affecting our work/ life balance?

• Can we reduce our fixed outgoings? Change fixed contracts/mortgage rates to the best we can get. cancel monthly DDs that are not required.

• reduce variable outgoings. This is the one where you make the most difference but can be the most difficult. Where does all your money go, if you don't know, you should. The only way to do this to track every expenditure, it's a pita to start but becomes eye opening. There are apps that do it manually or pull in the information from your banks for you to categorise. I use a spreadsheet in a cash book format, with categories like, food, fuel, dining out, toiletries, school. Tracking all spending makes you accountable and stops mindlessly filtering it away.

Once you have a couple of months typical spending, you can make a budget. If you can see where you are overspending, look to reduce it.

I looked at my banking set up to make it easy to know how much. I have at any given time, which can be tricky when I have 2 wages going in at different times, DDs goings out at different times and child benefit being paid 4 weekly.

I have 2 current accounts, a savings account and a credit card.
My first current account is my cash account where all income is paid into.
My 2nd current account is where my fixed DDs are paid out of.
I set up all the DDs to be paid on the 28th (I get paid on the 20th) and I transfer a fixed amount to cover these.
I'm then left with "spending money". I transfer all but £100 to savings, the £100 is a float for cash transactions, I hardly use cash these days, all my spending is on the credit card which is paid in full out of the savings. I think knowing that my spending is being paid by "savings" mentally helps to reduce spending too.

It's a case of getting out of one habit, spending and into another, saving. I love seeing our savings rise every month more than having new things.

Also I read a lot of minimalism blogs which help.

Sorry a bit of an lengthy post, . Good luck OP.

Just a quick disclaimer - despite my mindset below I do still buy stuff but it helps me save more!

So OP my mindset with money is that until the conditions below are met I don’t actually have any ‘spare’ money.

a) mortgage paid off
b) 6 months salary saved
c) enhanced pension contributions.
d) car loan paid off

All these things are hard and might not happen but they help me think down I really need to fritter £10 on this or would it be better to use that to secure my future? Many of us throw enhanced security away by frittering on shite - nails done, fast fashion etc.

Stop browsing online, Ebay etc. Don't go to shops unless necessary, food shop online to stop impulse buys. Get some hobbies and distractions, read, sleep, walk. Save all £1 £2 and 50ps in a jar for a year, don't dip into this jar.

Great thread. We are doing such a disservice to society by not equipping our children with these skills in school.