To ask how you manage your money

[whatlizziloves]

DH earns £35k I earn £21k

We have some debts, credit cards, store card and a loan.
Once our bills are paid, we've set aside money for food and petrol for the month, we usually have around £500 left that's "spare".

The thing is, that £500 is spent so ridiculously fast and we don't even have anything to show for it.
We will buy takeaways a few times a month, we spend money online buying things, and the rest I can't even account for.

I'd really like for us to have more savings but we keep telling ourselves we can afford to save.

I don't buy myself lots of new clothes / make up and DH doesn't treat himself much either!!

Neither of us seem to be particularly good at managing money but besides takeaways and a few Amazon purchases we don't know what we spend our money on. 🙄

How do you manage money and how can we start saving and stop spending?

I follow The Budget Mom, has a website plus loads of you tube videos whose very good in detailing what you need to do, and why and how writing stuff down, thinking about goals you want to achieve, prepping by allocating funds for birthdays etc monthly helps budget across the year. Whilst she uses cash it works in the same way for card purchases. Then to save the ‘pots’ use a mondo account or something

Married, but have separate finances although pool some money.

Every month I put 500 in the mortgage and bills account and 400 in the family account as does DP.

The rest is mine. 500 goes to savings 300 to credit cards 100 to direct debits (car insurance phone etc) 50 to fuel and leaves around 200-300 for personal spending on whatever.

I try to stay within this limit, which is usually doable .

We have a spread sheet breakdown in detail.

Our joint account covers mortgage , bills , children nursery, , pets , food etc and we both put in £1200 a month

We then put £700 each into joint savings .

& with the money we have spare we budget each month for anything we need ourselves and we use this money to get anything from our 'wish list' which mainly stuff for our home.

I'd second Dave Ramsey for a good step by step plan for getting into a good financial position.

I'd look at doing as many no spend days a week as possible. Reduce your spending budget to £200 - even this is generous. There isn't much going on at the moment due to corona virus and I'd make a big effort to only spend £200 if you really need to. Cut down takeaways to once a month on payday and see if you can make grocery shopping last a bit longer.

We have been saving for a deposit so have to be quite strict, once we move we will continue to live like this to pay for furniture and save. However, not that long ago we had debt that had hung around for ages, we finally got rid of it by just knuckling down and budgeting.

£500 on non essential spending when you have debts is quite a lot especially if you're paying interest on the debts,

You should save a little as an emergency fund, say £1000, but then you should throw all spare money at your debts focusing on the highest interest one first. But do try and transfer the credit and store cards to zero interest deals. Once you have paid the debts, then you can save.

Do you have anything you can sell to put the money towards your debts?

Could you limit the takeaways to a couple of times a month? Other times maybe get takeaway style food from supermarkets that tend to be far cheaper, eg nice pizza, curry meal deals.

Definitely analyse your spending to see where the £500 is going.

Go to money saving expert website. Do the budget and use the tools for working out what you are spending your money on.

If you are spending £20 on a takeout you could easily buy enough food for 3 meals for both of you with leftovers.

Embrace leftovers! Take your lunch in to work. Do free stuff. Make a budget. Use an app to track all spending.

I was frittering a ridiculously large amount. A year of paying attention to what I was spending gave me 3 months worth of salary in savings.

If you have "debts, credit cards, store card and a loan" then you don't actually have any money spare. You need to look at what all this debt is actually costing you in real terms and work hard to pay it off. I would imagine that the store card has the highest interest rate so I would probably get rid of that first then pay off the rest as soon as possible. I would be cutting my spending down to the bare bones if I was in debt.

@TheSmallAssassin

If you've got debts, unless they are on 0% interest, work on paying them off before you start saving.

I record my spending in an app on my phone, like others have said, track everything you spend for a month or two to work out where your money is going. My boss used to swear by www.youneedabudget.com, may be worth a look? Money Savings Expert has lots of advice too.

I’ve seen a lot of the ‘pay your debt off first’ stuff and I think it’s great to do that... but if I hadn’t have started doing a bit of both and grown some savings last year, once lockdown hit I would have been absolutely sunk.

I work in tourism and we were all instantly furloughed. My boss (small business) didn’t have any money to pay us our wages as normal, rightly or wrongly, as the government suggested until he received the money from them, which took a good six weeks. This time last year, I was living wage packet to wage packet and I’m paid weekly, so if I hadn’t have had a pot of about £1k, I literally wouldn’t have been able to feed us for those six weeks and would have defaulted in all my bills etc. Once the money came in for my boss, he paid us all what we should have had and I put it straight back into savings.

I now do both, I save and I pay my debt off. I pay minimum payments but snowball all paid off debts. For example, last Christmas I paid off my handset. I went sim only and took the £15 handset payment and added it to the minimum payment of my catalogue debt, so instead of paying off £20 a month I paid £35. I had a small inheritance recently, which enabled me to pay off the catalogue, so now use the £15 phone and £20 catalogue money to go towards my credit card. So instead of paying £27 a month on the credit card, I now pay £62.

Maybe doing both is better for low earners? My credit rating isn’t great and if my car broke down I couldn’t afford just to fix it out of my weekly wage, but we live rurally so I need the car to get to work so my savings are really important to me, as well as doing what I can to pay off debt!

Before buying ANYTHING or spending a penny, ask yourself "Do I really NEED this, or do I simply WANT it?"

There is a world of difference and it works wonders for me!

There are so many good budgeting apps out there, I use Emma and like it.

DS keeps telling me how brilliant Monzo is at helping him manage money. I've never seen it or used it so I can't comment. But he's a very thorough type person and I respect his opinion on things as it always factually based. It might be worth a look.

If you can't account for where your money goes, first thing to do is start recording every purchase. There are apps, or you can use a spreadsheet. This will show you where you're spending.

Also, with only £500 per month after bills between two people, you cannot afford several takeaways a month. Limit it to one, tops. From what you say it's evidently that and crap from Amazon that's where you're going wrong, so you should see some impact pretty soon if you do this.

I used to get confused about what I'd spent and when. This sometimes resulted in me going overdrawn etc and getting charges. So I decided to change how I organised my finances.

I have 2 current accounts and 2 savings accounts now.

Current account 1 is where my wages are paid into.
Current account 2 is solely for standing orders and direct debits
Savings account 1 is for 'emergencies' eg boiler repair etc
Savings account 2 is for long term savings and holidays

Every month I transfer a set amount to 2nd current account to cover all regular bills. I also pay set amounts into savings accounts. ( when savings in 'emergencies' account get over 5k, I transfer 2k to long term savings.

It means that I always have money for emergencies, always have money for longer term and I can adjust things as I go i.e If I've done overtime, all the extra goes straight to savings etc.

It means that I never miss a payment for bills etc and I've only got a set amount left for spending for the month.

I've taught my kids to do the same when they were old enough and it's worked really well for all of us.

I have 2 accounts. One my wages go into and bills are paid from (plus standing orders into savings etc). I work out whats left and pay myself an allowance each week into my second account. That is my fun money for takeaways, days out etc. So if you have £500 a month, pay yourself £100 a week (to account for a 5 week month). Never touch the bills account.