From splurging to counting pennies - suddenly

[marykitty]

Dear All

I need your savy help.
Long story short, so far we were doing a mix of paid childcare in nursery/free childcare with grandma.
Grandma will not be able to do it anymore starting january 2022.
This means that suddenly our childcare cost will increase to 3 times the original cost.
We can afford this and we knew this could happen, but basically i have now to switch my mindset from "let's buy it" to carefully budgeting and considering expenses to make sure we are not over spending.

Where can I start? To you have some "budgeting from dummies" suggestions, day to day tips or good apps i can use to start?

I am good with the "big expenses" but I know I loose easily track of the small treats or "impulse" thing such as a Coffee on the go, new nice gloves for my kid or a sudden change of plan for dinner because I crave pizza....

Thanks a lot!

We were in a similar situation a while ago. My advice would be no 'impulse' buys. Or if you think that would feel too difficult, give yourself a weekly 'allowance' for impulse buys. Advice I got from another poster was to wait 24 hours from thinking you want to buy something to actually buying it- and in that time consider whether you actually really need it. I find that over 50% of the time, a day later I decide I can do without.

Meal planning and doing one main weekly shop (rather than my old habit of nipping to the shop most days) saved us loads- it really cut down on the unnecessary snacks we buy and means a lot less food waste. Our plan sometimes includes a take-away but it's planned in and budgeted for.

We also started taking picnic food more often if we went out for the day. We've actually kept doing this even though we have a bit more money now as we've found we actually prefer it.

Also, only buy things on special offer if you would have bought them anyway (or they replace something more expensive that you would have bought). I found it was really easy to think I'd saved money by taking advantage of loads of offers/deals but when I actually looked at what I'd spent it was mainly just extra expenditure on things we would not usually buy.

Make a written log of all online purchases each month. EBay Amazon etc.

Start as if the increase was beginning next month.

On pay day, take the extra money and put it aside out of your account.

Check your balance every day to ensure you know exactly where you are. Know what your direct debits are and what your "spends" are to the penny.

You might not manage to stay within your (future) means right away and find yourself having to borrow from the money you put aside towards the end of the month, but start again the following month and do better.

By January you should have a nice pot of savings to cushion any unexpected blows or spend on something nice, and you'll be used to getting by on less on a monthly basis.

Allocate yourself ‘fun money’ in cash for coffees etc. Leave all other payment methods at home. When it’s gone, it’s gone.

My suggestion is have your current account for direct debits/ bills only. Set up a Monzo account or similar for spending. Work out how much you need to leave in the current account for bills. Transfer across the amount to Monzo that you need each month for spending - coffees/ groceries etc. You can even use the “pots” on the app to separate out spending. It gives you a running tally as you go e.g. £250 left for the next 28 days, so it is simple to keep track.

@ditalini

Start as if the increase was beginning next month.

On pay day, take the extra money and put it aside out of your account.

Check your balance every day to ensure you know exactly where you are. Know what your direct debits are and what your "spends" are to the penny.

You might not manage to stay within your (future) means right away and find yourself having to borrow from the money you put aside towards the end of the month, but start again the following month and do better.

By January you should have a nice pot of savings to cushion any unexpected blows or spend on something nice, and you'll be used to getting by on less on a monthly basis.

This is really good advice. You have a few months to practise with a safety net if you get it wrong.

Do your budget and spends but make sure you do it for the whole year - so Christmas at £20 or £30 pounds a month. Car insurance x per month (evn if you pay it in one go), birthday money, holiday money etc.

I used Toshl - it's a good app -there are others - to put all expenses down. Has to be all of them and you categorise them.

It shows your money over the next year and how much you'll have left each month.

It focuses the mind.

Live within your new means from now. So it's not a shock. And build up a slush fund and allow treat money.

Do a list for the supermarket, if you put something in your trolley that isn't on the list (and you still want as opposed to need it) put it on the belt first and ask the cashier to subtotal it and then be aware that that is what impulse purchases are sticking on your bill on a regular basis.

DH retires properly in August 2022 and whilst we will have a decent income (Thank God) we will be about £1,000 a month down, we now remove that from the bank account on pay day and stick it in savings, when the time comes we won't have that to save, but we will be used to living on our new figure. If that makes sense.

I am eight years younger and won't get my state pension until 2030, at which point we will be well used to living without it and will spend it on beer and skittles.

So when the childcare costs element disappears you will feel rich again.

Meal plan or at least shop frugally and let that decide your meals.
Have cheap alternative in the house for something simple when noone wants to cook and you'd previously chosen takeaway.

Basically know yourself and be prepared.

Not sure how it would work these days, with contactless and all that jazz, but when I was first on here twelfty million years ago one poster used to wrap their credit card up tightly in several sandwich bags, put it in a Chinese food container with water and then stick it in the freezer.

If she wanted to buy anything she had to wait for the large ice cube to melt, and by then she had generally changed her mind.

Brilliant.
We just have a rule of waiting at least 24 hours.

I've spent the last week doing a full sort out of our bank accounts bills utilities and good spending etc.

It's getting harder with utilities and food going up so quickly and where 12 months ago we didn't think twice about throwing steak or a takeaway and copious coffees out th the weekend onto our cards we've really struggled the last few months to have anything left at the end of the month.

Covid furlough and lockdown wipes out our emergency funds so we really need to build that back up again.

I've cancelled the £35 a month in individual insurances for our new kitchen appliances and now pay that amount into an account seperatly to build up the house emergency fund again.

I wanted to put the food budget up but we decided to properly meal plan and budget and see if we can stay within our normal budget first.

I came up with seven meals inc new easy to prep ones and then we shopped for them at the weekend.

I went online and worked out roughly how much our food shop should be inc all other things we need and was shocked it was £40 less than what we normally spend a week so it shows how much rubbish and random purchases we make a week at the supermarket.

I now have a folder with the weeks meal plans in as well as coatings per meal and other items and a solid list of all outgoings and the dates for them.

I've allowed myself £30 a week cash in my purse for personal spends like coffee out and any other bits I would buy and then have set up standing orders to two other accounts for savings to build up.

One for Xmas and one for general.

I was shocked to see I spent over £100 last month on coffees and snacks when out and about

Have a detailed list of all your spends op and go from there.

I've also taken on four hours a week somewhere as an extra while I train I something else to add to my current career.
That will bring in some extra Aswell

Thanks a lot everyone for your replies and tips!

I will start to budget on our "new level" already starting next month and see how it goes.
I will also start meal planning, cutting down the "daily quick run to aldi" and planning a weekly big delivery.
I will also implement the 24h suggestion.

I went through our expenses from last month. A lot of stupid impulse buy. Apart from that, i might need to contact my insurance to make sure we cannot improve our deals...

I will come back and let you know how it works

Thanks again!

@marykitty
It took me three evenings last week at least two hours per evening to get everything sorted and a budget and food plan in place but hell I feel so much better already.

It starts this weekend with the new budget and food shop plan but we both barely spent anything on impulse this weekend which is when we are at our worst together.

I'm ready for the challenge and already feel relief that I'm not sticking my head in the sand but actually doing something about it.

Good luck and let us know how you get on

At the moment, I am concerned about the spiralling cost of living so I got a pad and am writing down literally everything we are spending and I mean everything. So, I've just been to the supermarket and got the receipt and am going to list everything in the pad and how much I paid and then I have a column for whether it was essential, in which case I put an "E" or non-essential, in which case I put an "NE". At the end of the month I am going to tot up EXACTLY what we have spent on NE items so I can see it in black and white and hope it changes my ways.

Of course, I just put blinking cadburys bonfire mini rolls in my shopping which were £1 NE but I am weak!

Seriously though, lots of good tips on here and definitely the best is to start living as if you have to pay out the childcare costs now by putting that into a separate account you won't dip into.

We had the same from Sept last year - zero childcare costs as my MIL had said that she would look after our kids but then after lockdown 1 decided she couldn't and now we are paying 1600 a month in fees!!

@ditalini

Start as if the increase was beginning next month.

On pay day, take the extra money and put it aside out of your account.

Check your balance every day to ensure you know exactly where you are. Know what your direct debits are and what your "spends" are to the penny.

You might not manage to stay within your (future) means right away and find yourself having to borrow from the money you put aside towards the end of the month, but start again the following month and do better.

By January you should have a nice pot of savings to cushion any unexpected blows or spend on something nice, and you'll be used to getting by on less on a monthly basis.

That's excellent advice.

Try and anticipate your weak points. Eg if you are likely to be tempted by a takeout coffee in the park, take a flask from home. Or if you know that Wednesdays are usually a tough day when you often crave takeout, meal plan to have a ready made quiche/supermarket pizza/filled pasta or something that will be as easy and quicker.

I also visualise the money. Imagine the coffee and the 3 pound sitting next to each other.

I also agree with buying cheaper treats in. £20 on scones, biscuits for the freezer can go along way and stops the 'pop in' shopping.

I do 'pretend shopping' so put stuff in my online basket but never check out. I find I actually don't need any of the stuff the next day!

I’ve actually found that Gousto has saved us loads. I thought it would be really expensive but it’s saved me money by not being able to pick up impulse buys whilst out. Got a referral code if you want it!