Better money habits for 2022

[penguinwithasuitcase]

I really want to take on my finances this year - specifically around tracking my income and outgoings and saving more.

"Take care of the pennies and the pounds will take care of themselves", as my grandad always said.... now it's time to put it into practice!

What habits / tools / apps do you use that I could start applying to do a better job of managing my money day to day?

And if I can automate it, so much the better –if I have to manually build a spreadsheet and put everything in I'll stop doing it by February!

I'm following with a lot of interest.

Look at what your bank provides, many have a phone app, so you get notification every time you spend. Some let you categorise the expenditure and have budgeting features.

There are apps which link to your bank via OpenBanking, which enable you to categorise expenses and they then predict your future expenses and alert you when a regular payment has not been made, when a regular payment has increased. Not found a perfect app yet for that... Snoop is quite good but does not understand all my transactions.

I actually like doing a spreadsheet. I keep a transaction log, which I pre-populate with my regular monthly expenses, then I manually add each time I buy something.

Automation I use for investing. I set up monthly payments in to Pension and ISA. I have another spreadsheet, told you I like spreadsheets, where once a month, I log in to my investments and write the total value on the spreadsheet, so I track net worth.

I have one account for my direct debits & standing orders and they are all taken between 1st- 5th

I have a second account to put spending money
A 3rd to put fuel and supermarket spends

A savings account

Wages paid into direct debit account and divided up on payday for the other account

Anything left over in spending or fuel at the end of the month goes into savings

Monzo or similar are good for having envelope accounts so you can save separately, and very easy to do on your phone. Santander let you have a bunch of accounts too, so for example I have one for Christmas, one for insurance, one for holidays (each with that name) - and I transfer a set amount each month into each (standing order) so they grow over the year. I therefore very rarely get a surprise bill that I can’t pay now as a result. I do this just after pay day.

Also have all bills on direct debit just after pay day, and some into savings at the same time.

That means that by 5 days after pay day I’ve basically paid all bills, short term savings and long term savings, and know what I have left to play with for the rest of the month.

@ivykaty44

I have one account for my direct debits & standing orders and they are all taken between 1st- 5th

I have a second account to put spending money
A 3rd to put fuel and supermarket spends

A savings account

Wages paid into direct debit account and divided up on payday for the other account

Anything left over in spending or fuel at the end of the month goes into savings

Something like this but put your savings away at the beginning of the month not the end. If you split your money into these types of accounts, and only buy non essentials from your spending account, you can naturally limit this type of spending without having to track expenditure.

Also be realistic about how much you spend on food and how much of this is luxury vs essential, eg if your idea of normal basic shopping is filling a trolley of what looks nice in Waitrose, it's likely to cost about three times what a mainly vegetarian unprocessed, seasonal fruit and vegetable based diet from a cheaper supermarket.

Use the moneysaving expert money makeover to do a really good review of all your outgoings, including those which are annual or irregular. Eg if you have a house, DC, car or pets, they will need money spending on them sooner or later, so money is not genuinely spare until you've accounted for these.

Also look at the demotivator if you need an illustration as to how small everyday spends like a coffee or bought lunch add up to huge sums each month or year if you do them multiple times a week.

Finally get their weekly email for ongoing hints and tips to make more money, such as free £100+ for opening a new bank account.

This is all really helpful - thank you!

So many of these apps look great but because I have accounts in different currencies (and one bank in each country) I find it difficult to organise myself in a way that actually counts everything I have...

My tax and bills come out of my Spanish account, for example, but I get paid in pounds into a UK account and pay for UK products from that account, while my weekly shop comes out of my Wise account...

I find it so confusing and (understandably) apps aren't quite up to the task! I should have maybe mentioned this at the beginning... apologies.

@Shamoo I've heard some stories about Monzo randomly freezing people's accounts for ages –have you had a good experience with them?

Also @nannynick Snoop looks AMAZING but since my main bills are Spanish, I'm guessing it may not be worth it? WDYT?

I use YNAB. Been using it for six years now and its revolutionised my budgeting. It's absolutely brilliant. They have a one month free trial so maybe take a look?

@DappledOliveGroves I downloaded it once and found it really tricky to get to grips with...

Maybe time to give it another go.

Is it still the case that it only syncs with US bank accounts?

@penguinwithasuitcase no - it now connects to mainstream UK banks. There's so many tutorials and i think you can book into online workshops too.

I use a spreadsheet that started as a simple cashbook but has evolved into a complicated workbook of forecasts and charts. I like being able to see our previous costs and compare to current.
There were some apps that did a good job of it like Emma.

Following. I'm just in the process of cutting down using any credit cards and trying to be more careful

My one tip is having all outgoings on the first of the month e.g. direct debits and standing orders then you see how much you have left.

Snoop may well not be much use with banks in other countries. It uses OpenBanking so if that is supported by the bank then maybe but do European banks support OpenBanking?

I always look at top cashback or similar before I buy something or renew insurance, breakdown cover. I've earned hundreds from doing so in the past year.

I am planning on going back to using different accounts for bills and one for everyday spending as its far easier to keep track of what's coming out.

Also wanting to add a couple more saving accounts to keep money aside for Christmas, holidays etc separate to our other accounts. We were abroad for a couple of years and were just using one account for a while but I think having a few will manage our money better.

We're also trying to pay for car insurance etc up front if we can rather than over the year as it save a lot.

Treat savings as a bill - not what is left over at the end of the month.

Do any of you have experience with using Plum? I'm also looking for an app to grapple with finances. Will these apps sync across partner devices?

@scratchedbymycat

Do any of you have experience with using Plum? I'm also looking for an app to grapple with finances. Will these apps sync across partner devices?

I was juat about to ask the same but I am nervous to input any details

I switched to Monzo
Seeing it all going out on an hourly basis really does focus my mind!

Second to YNAB. Life changing. Set your budget and keep track of expenses. Means you can save for things long term and know when you ran out of cash

I’ve taken control of my finances this year and a few things that have helped me are:

Using the budget tracker spreadsheet from money saving expert.

Changing my bank to Starling. It breaks transactions down into categories so you can keep track more easily. However, the saving spaces have been an absolute game changer for me. You can set up a automatic transfer ever month into different ‘pots’ so I have ones to save for Christmas, birthdays, car maintenance, house maintenance, etc.

www.moneysavingexpert.com/banking/budget-planning/

Take some time to input EVERYTHING-be honest! I review mine every month to stay on top of it. It really works for me.

Can I ask if Plum, Monzo and Starling are all very similar types of accounts?

I use spreadsheets that have evolved over time. 12 months of budget forwards, another with all savings, mortgage etc. etc. I just keep the spending one updated by recording every single transaction as it happens. They all link into one that shows current financial position at any one time. Pay everything on credit card that generates points and subsequently M&S vouchers generating £300-£400 per year. Every penny is made to work and now I even have one for our pensions! Took time to set up but since doing so I’m much more comfortable with our finances.

A game changer for us has been Starling. Salaries go into our original bank account and then at the start of each month I transfer out money for saving and money for spending, which goes into Starling. All that stays in the main bank account is exactly what we need for our monthly direct debits so I know they are covered. As other posters have said Starling gives you lots of intelligence about your spending patterns - and has round up and saving pot options, which I love.

I just do it all on a spreadsheet, it gives me the most control over what I can enter and how I present it.