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How to stop spending

13 replies

iloveyoubutilovememore · 08/06/2020 10:31

Looking for advice/tips on how to stop spending/budget better.

I'm 30 years old and live in a rented house with my husband and three year old son. We have been renting for seven years and recently left London for a quieter, slower paced life in Norfolk. The aim was to buy here once we got used to the area and decided where we want to settle but we still aren't in the position to get a mortgage.

We have money in a savings account for our deposit. A combination of our savings over the last ten years plus a gift from a relative. It's enough but that isn't the issue. We've both taken lower incomes since moving here and rent plus childcare and food is nearly all of our incomings combined. We can afford to pay our bills and eat well then have just a small amount left to see us through. Once everything has been paid I then decide that we need clothes for our son, or that we deserve a takeaway, or some nice flowers etc.

I'm fully aware that if we hope to get a mortgage soon that money should be left in our joint account to prove that we are good applicant to lend to. Yet I just can't stop myself. It isn't anything extreme but every month I feel an impulse to get these things, I even use Klarna and pay it off a month later. It's also getting to the point that by the middle of each month we don't have enough in our joint account to cover any other bills that haven't been taken yet. I underplay it to my husband who gets frustrated with me (understandably) but I know this is just stopping us from getting a home of our own any time soon.

Both our credit scores are rubbish - nothing major that would actually stop us getting a mortgage but the interest rates would be v high. We have been working on our scores and going through our reports, but the main issue is that any lender will look at our bank accounts and see the recurrent theme and possibly say no.

I just don't know how to make positive changes. Any advice much appreciated.

OP posts:
maxelly · 08/06/2020 11:35

My sympathies, sounds like you've had a big lifestyle change (London to rural Norfolk very different) so it's not surprising it's taking you a while to adjust. I guess the loss of income is the root cause of this, sounds as though you are still a bit stuck with previous habits that were formed when you had a bit more disposable income? Although this board is really great for frugality tips and hints, what will really help in the long run is increasing your family income, do you and your DH have a plan for this - are promotions or pay increases at work possible (understand this may be slower than in London). Also as your DS is 3 (if you aren't planning more children), you only have a few more years to go of really heavy/expensive childcare responsibilities, you will presumably be able to take more on at work and/or reduce childcare bill when he starts school, so that's something to look forward to.

In the short term, I think you need to revisit your budget and how you allocate the small amount of discretionary 'spends' that you have left after all essential bills are paid. For me your DS's clothes should be an essential alongside utility bills etc. - although you can be pretty frugal in picking up stuff 2nd hand and from charity shops etc so it doesn't need to be a huge amount. I'd work out a reasonable annual spend on clothes (perhaps account for buying him new things 2 or 3 times a year to account for seasonality and growth, don't forget to budget for shoes and a winter coat as well and then divide that by 12 and put aside that money monthly. Don't do any impulse purchasing of clothes for him outside the planned shops unless it's a dire emergency).

I would dedicate some time mapping out and accounting for genuinely all essentials in your monthly budget - there are good tools/checklists to do this on money saving expert and money advice service if you google (I wouldn't count takeaways as essential but don't forget some other non obvious items like saving towards Christmas, insurances that have to be paid annually, TV license and any TV subscriptions, car repair/MOT fund, add up how much you need annually then divide by 12 and allocate this to your monthly budget). So many people think their problem is spending on non essentials/impulse spending but then when they add up everything they actually need to spend or are already committed to spending every month (e.g. phone contracts, car finance, loan repayments), they barely have enough as it is, so no wonder they go over every month - and then once you are already overspending it's quite tempting to go 'fuck it' and add luxuries/non essentials in as well.

Once you have done the full audit of your actual essential monthly spends, the amount you have left over each month is what you have as true discretionary spends. I would divide this amount into either 2 (half for you and half for your DH) or 3 (a third for you, a third for your DH and a third as a 'family fund') and somehow physically separate it from the rest of your money - either withdraw in cash at the start of the month (this can be good as you physically see the amount going down as you spend, although so much these days is online or card only cash is increasingly difficult to use) or move to a separate online account. There are good apps and tools like you need a budget that help you separate money in an account into 'pots' so you can see what is allocated to what, it helps you to see that actually even though you can have quite a large sum of money in the account, every penny of it is already 'spent'/allocated to expenses so none is available for luxuries.

You then need to be strict with yourself that any spending on things you have deemed non-essential comes out of your discretionary spends money, and this money only. If you don't have enough for something you want, then you don't get it. Cut up all credit cards and delete your Klarna. If you find it too tempting to have bills money 'sitting' in the essentials account waiting to be spent, then leave your debit card for this account at home when you go out so you can't get at the money (only take your personal spends money), or if online spending is more your poison, then perhaps switch the account to a brand new one so it isn't already set up on your online accounts (you can get good cashback deals for switching as well), and give your new card to your DH or a family member who is good with money to look after, or just put it into the freezer or something, so that you physically have to go and get the card to make the purchase, giving you time to pause and think whether this is truly an essential purchase rather than impulse purchasing?

Northernsoullover · 08/06/2020 11:50

You sound so much like me. I even thought of starting a similar thread Blush.
I am saving for a house and have a fair bit put aside. However I'd have a lot more if I could stop bloody wasting money. I just wish I could become really tightwad.
I don't know if its a hangover from being really really skint in the past. I have vowed never to worry about money again and I have no debt but I still love buying 'treats'.

sashh · 08/06/2020 12:21

I think you need to be honest with your self about when and why you spend.

I use different bank accounts for saving.

One is difficult to get money out of, it's a local building society account from when I lived elsewhere, when I put money into it I know I will have to drive 100+ miles or send them a letter to recieve a check if I want the money,

All my income goes into a current account and all regular payments go out of that same account.

I do not spend money from this account, I have regualar payments to other accounts, one for savings with instant access, then another with more limmited access.

I also have a 'spending account', an amount goes into that each week and that is used to pay for groceries, treats etc.

I find having spending money weekly helps because I will put someonething off for a week or so and then I might not think it is as necessary as I did a week ago, whereas with monthly pay I'd be more likley to spend.

BarbaraofSeville · 09/06/2020 05:26

Good post from max about setting a budget and accounting for annual and irregular expenses, which can be more than you think, leaving less than you realise available for things like takeaways and other treats.

I also agree about getting rid of klarna but disagree about getting rid of credit cards as, used correctly they are an excellent tool for managing cashflow and improving your credit rating.

We use ours for all day to day spending and it is then paid off in full every month by direct debit and we barely touch the current account during the month. I just check once a month to make sure there's enough money for the monthly direct debits including the upcoming credit card payment and move any spare money to a savings account. And a well run credit card account is good for your credit rating.

A good budgeting tool is the MSE money makeover which goes through all your bills and other spending to see where you can save, because if you manage to reduce your bills that frees up more money to save for a house deposit.

How much do you spend on food? That can vary enormously and a good place to cut back if you're spending more than average. Don't fall into the Mumsnet trap of 'we prioritise good food so have to spend £200 pw on asparagus, purple sprouting broccoli and fresh blueberries from Waitrose'.

You can eat equally well by buying far cheaper vegetables and frozen fruit from cheaper supermarkets, and save hundreds of pounds a month in the process.

But on the spending on treats fund, once you've set your budget, have an available amount on a 'when it's gone, it's gone' basis. Put it on a separate debit card if you like.

And look into second hand clothes for DS. Children grow so fast that they often grow out of things while they're still in good condition. Look for bundles on selling sites or in charity shops when they re-open.

sashh · 09/06/2020 07:32

I've just remembered my 'council tax' trick. I pay my council tax monthly but I overpay, so if my CT is £100pm I will pay £150 until the balance is £0, I then stop the SO to the council and instead pay £150 into a savings account. Because the same amount goes out each month I don't notice it.

PinkDaffodil2 · 09/06/2020 07:44

Don’t cancel the credit cards but pay them off and cut them up - getting rid of them could hurt your credit score.
I was finding it difficult to keep track of where all the money was going so now I’ve set up me and DH with a starling account each and transfer a set amount each at the start of the month for discretionary spending. Only bills should come out of our joint account. I keep one credit card to use for groceries and keep an eye that it stays about £300/month and pay it off each month. Also a direct debit to a regular saver.
Using the starling account for my own spends, and not conflating it with groceries works really well for us - and means the current account is very easy to keep an eye on.

kitschplease · 09/06/2020 07:48

Do you use Instagram? If so, check out the #ukdebtfreecommunity hashtag - loads of tips and advice for frugal living.

Isleepinahedgefund · 09/06/2020 08:20

Maxelly’s post is fab re how to reorganise your finances. I also LOVE Sash’s council tax trick - am going to do that myself!

The other thing is to look at it like you’re breaking a habit. Give yourself 3-4 months to crack this and be forgiving to yourself - if you slip up, don’t just give up and blow a load more money on stuff - take a deep breath, forgive yourself and pick up where you left off. You will find it falls into place eventually - if it takes longer than 3-4 paydays I’d say your problem is a bit different (eg the household income actually isn’t enough to cover everything).

My top tips would be:

Open a separate account for spends - I use monzo

Leave your bills account card at home

Make sure literally everything is budgeted for - clothing for your son is essential for instance. Have an amount for a takeaway every couple of months.

Make a simple spreadsheet for your budget and refer to it often

Be really strict with your grocery shopping budget. If you don’t already, learn to cook well with cheap ingredients. I also have a separate account to keep this money ringfenced.

Remember that childcare costs will reduce pretty soon (most wrap around care is significantly cheaper than nursery)

And finally - if you want to live less budgeted/constrained (been there, not much fun), then try any way you can to increase your income from your main job. I say main job because getting a second job just adds a whole different lot of misery frankly! (Not sure what the usual stock advice on mumsnet is for this - used to be “take in ironing” but I think it’s now shifted to “get a job stacking shelves” 😂)

BuzzShitbagBobbly · 09/06/2020 08:33

What approach works for you in other areas of life when you want to change something - slowly, slowly; or complete cold turkey?

I ask because that is the key to helping yourself. What the next person does is as much help as a chocolate teapot if their motivation is different.

Find your motivation and you'll have more chance of success.

coffeandcake30 · 09/06/2020 08:34

God I could have written this myself. I don't know why I keep spending either? I'm spending a ridiculous amount on food. I agree that debt free community on insta is really good!

I think for myself, I will look at only second hand clothes from eBay, and maybe re selling things too. I've tried getting my husband to take the reigns with the finances so I don't have access to any money, but I do the food shopping so it just doesn't work haha

Waitingforboristoletusfree · 09/06/2020 08:40

I am the same ☹️ Always seem to ‘need’ something

Lola001 · 09/06/2020 16:51

I make conscious efforts to have a no spend day, today for example, I need to go to the supermarket as I've ran out of a couple of bits but we will hold off and off I will have to buy the bits in the end but it's the other costs... Fuel... Oooh that looks nice... Ooh a treat etc that really adds up so I take the temptation away from myself.

M00dyM0nday1 · 10/06/2020 15:03

"interest rates are high"

Mortgage interest rates are the lowest that they have been for years. In the past they were 15 percent

You mention buying flowers
These are a luxury

Pay your bills, then buy the essentials

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