How do I not live by paycheque to paycheque?

[FindingAWayy]

Very frustrated and annoyed I can’t do it by now (age 34) some simple guidance/ wisdom would be invaluable and very much appreciated - thank you so so much in advance my bigger goal is to learn how to manage a budget - I’ve got so overwhelmed I can’t think 😳

Well.

Tell us where your money is going ie.

Bills.
Petrol travel

Utilities
Food shopping

Meals out

Drinks

Socialising

Can't help otherwise

Basically.

Get a pen and paper.

Write down all your 'fixed' outgoings eg rent, electric, internet.

Then write down how much you're currently spending on food, socialising etc

And in incidental spending eg the coffee on the way to work, the drinks with friends on Friday. Etc

You need to know where it's going before you can identify where to save money.

Well done for asking for help OP.

First of all, if you aren’t already familiar with Moneysavingexpert, start here:

www.moneysavingexpert.com/family/stop-spending-budgeting-tool/

It completely depends on your income (and outgoings). Write them all down. Every single thing. Including haircuts, all the small things.

If there is anything at all spare to save, transfer it out into savings by standing order on payday and closely budget the rest.

If you genuinely don’t have spare, you’ll have to hang tight until something improves.

My way of not living month to month is by being brutal with cutting my spending for a few months. No haircuts no cafe spends nothing at all and then having a side hustle.

My side hustle isn't too much money but combined with not spending is helping to get down my debt which is the real reason I have no money at the end of the month!

Second the MSE budgeting advice. It explains how you need to be saving all year round for annual and irregular expenses that will crop up, eg Christmas, insurance, car repairs, white goods replacement etc etc.

So you don't know what you have available to spend on day to day non essentials like meals out, or even bought lunches and coffees until you have accounted for things like that.

However, the other important point is whether you have enough money to cover everything in the first place. Are you running out of money because your income doesn't cover your essentials let alone any extras or are you just overspending and cutting back and reprioritising a little would allow you to a put money aside each month so it is available for bigger expenses that occur less often?

The best thing to do is earn more money.

If there are any professional qualifications that would allow you to apply for promotions or new jobs, get studying.

If that isn't an option, get budgeting.

The 'old fashioned thrift' section of money saving expert's website is good.

Join the frugal thread or come along to the no spend January thread.

along with all the suggestions for budgeting above by pp

Citizen advice budgeting tool
I like the above budgeting tool

I'm a single mum with one ds and a mortgage. I practice this all the time.

Month 1

• 1st of month - pay all regular bills.
• Allow £50 a week for food & cleaning stuff. Write a list and stick to it.
• Allocate money for expected bills - eg. this month ds needed a coat.

Then try every day to get through without spending anything at all. For the first month it's a bit miserable but keep going. At the end of the month, put 2/3 of whatever you have left into savings. Keep 1/3 as a 'float'.

Month 2

• Do the same but if you want a coffee out with friends or whatever, you can spend the float money but only the float money.

And so on. Be absolutely ruthless. No snacks at petrol stations, no coffees, magazines or flowers. No top-up shops. Gradually each month gets a bit easier.

When I had much less money, I joined my works credit union, whereby the money is deducted from your pay before you receive it. Catch is you can't take the savings out until the end of the year.

The first year I was a bit dubious about whether I'd miss the money, so only did £50 a month. I didn't really notice not receiving it. By Christmas, I had £600 ready for presents.

These days I earn a lot more and save a lot more, but the basic concept is the same; start off with putting a small amount in an untouchable account, and keep adding to it gradually. It'll take some time, but you will get there.

It is difficult, but I tried to cut my food shop down, and making packed lunches for work. The money I would have spent I put into a savings account. DP puts all his spare cash into my savings account. It’s taken us 6 months but we have comfortably saved 2.5k with the help of a bonus and a tax rebate. Some of that will be spent on a floor for the lounge as we have renovations ongoing, but we needed savings. Since we started saving we had to pay for a new washing machine because it died suddenly, decorating materials for the lounge, including stupid special paint and a “new” secondhand sofa because the kids had ruined ours to the point it was vile. We were completely skint before we got strict.

DP got a “new” car through a work scheme because his old one was costing us an absolute fortune, so although it costs a set amount a month, we don’t pay for insurance, mot, tax, or repairs for it. So it is a lot cheaper in the long run.

we’ve also cut our phone bills right down by having SIM only contracts instead of a new phone, and cut all utilities as much as possible. We only keep a £15 sky contract, and netflix.

Write down everything you spend, every coffee, all food shopping etc, you'll be amazed where you're money goes and then you can start changing behaviours.

Mine was food shopping/eating out. I thought we spent £100 a week but actually nearer £150 when you add up coffee at work, treat McDonalds, top up shops every few days. It was a massive eye opener for me.

Some people can't stretch the money.
Some fritter the money.

Need more info to know which category is you, OP.

Try and set money aside in a pot system.
So I have
Car insurance
Health insurance
Car tax
DC (eg for clothes/swimming lessons)
Gifts throughout the year
Christmas
Etc etc

The idea is that you save 1/12 of the amount you will need each month. So if health insurance is £1200 each year you put aside £100 each month so when the bill arrives the money is there
Gifts might be £20 a month but when you have 4 presents to buy in April you have £80 there already

If you are short on money and it sounds like you are, start small.
Like £10 a month to each account (or even just to one account)

The only way that works for me is to have a spreadsheet with all my regular outgoings on it and two separate bank accounts. I use one account for all fixed bills/DDs and on the day I get paid I transfer the exact amount needed plus a small buffer (£50ish) to make sure the bills are covered. What remains in my “spending” account I then divide into pots (bank with Monzo) for expected monthly expenses such as groceries, fuel, hair/nails, planned days out, etc. What remains after doing this is my “free” money for the month, so I mentally divide it into 4/5 depending on the number of weeks in the month and make sure I don’t spend more than that in any given week.

I would say that you need an annual budget. List all your outgoings and then have a column per pay day. Write out what you will need. Do it on a spreadsheet and you can automatically work out what your balance will be by the end of that month. Don't be fooled, you need to save for those annual expenses like holidays and Xmas. But doing this will show you have much savings you need to make to cover those expenses

I've got an app called Moneyhub which tells me exactly what I'm spending and where. Try it.

Unfortunately getting out of the cycle is difficult, particularly so in current times and the time of year.

One thing to give yourself a kick start is to have a down month. I do this sometimes when I've overspent. Almost like a detox.

Basically try not to spend any money for a month. Obviously you can't but it means eating out of the freezer/cupboard and only buying the bare minimum. It means eating weird food combos but gets things finished.

Same with everything else- use up dregs of shampoo, soap cleaning products,

Don't buy any clothes, no meals out. Lie low.

Use up loyalty points, gift vouchers, get stuff on eBay/marketplace.

Walk where you can.

At the end of the month you should be left with a buffer that you can save. You'll also learn to live more frugally which is the bigger lesson.

Just be honest with your nearest - 'having a low spend month but come over for a brew or let's go for a walk or something'.

Long term, do a spend analysis- I use the Moneyhub app- my god it's been an eye opener. I've saved thousands for cleaning up my finances.

Look at revenue streams- eBay, extra hours etc, cashback websites.

I guess it depends why there is too much month for the money.
If you heating is barely on, you shop essentials only, and never go out, there isn't much to do except increase your income.

If you are buying a coffee twice a day, grabbing lunch on the go whilst shopping in your lunch break, leaving the heating at 25C and going out for dinner and cocktails every weekend, there is quite a lot that can be cut back on.

But whatever your situation, you either need to spend less or earn more - or both!

Every time I got a pay rise, I put half of it into a savings account - so if my pay rise was £30/month, £15 was left for me, and £15 went into savings the day after payday by standing order. Possibly not a great plan right now given the lack of payrises over the past few years, but it built up to a decent amount each month after a while.

A. Work out your total monthly income (pay, child benefits, uc?)

B. Work out your fixed monthly expenses
(Look through bank statements for DD, costs of getting to work, clubs/ dinner money)

C. Work out what you need for recurring one off (eg. Insurance if once a year, money to get car through mot, Christmas, school uniform) divide these numbers by 12 & put in separate savings accounts each month. (you might need to open several)

D. Take B&C away from A, to work out what you can afford to spend each month.

E. Set up a separate 'spending account' either a basic current account at your normal bank, or at a different bank. Divide D by 5, then set up a standing order to transfer that amount into your spending account each Monday.

In months that only have 4 Mondays, transfer the remaining weeks money in to savings, and keep to cover unexpected expenses.

Using You Need a Budget has been life changing for us.

How much do you earn op and what are four fixed/ necessary outgoings?
Rent/ mortgage, utilities, council tax, travel. Groceries, etc.
what unnecessaries can you cut back on? Tv packages, eating out, clothes etc

What I was taught is not to work out where your money is going but to allocate set amounts from your known budget to various things and then stick to them.

Take your monthly salary and decide how much to spend on each item of expenditure from food to utilities and clothes. Allocate a set % for each. Include fun and savings.
Even non-negotiable things are negotiable up to a point - you can shop around for utilities - extend a mortgage to reduce monthly outgoings or move to a cheaper rental area etc.
I was taught this after uni when I was badly in debt and needed ot get out of it quickly. I was told 5% of what you earn has to go on fun, even whenb youa re paying back big debts, otherwise you'll resent the project of getting out of debt. I loved that principle. It meant if I had a good week (I had fluctating income at the time) I could go out for dinner or to the theatre but even if I had a bad week, I could afford to go swimming with a friend and for a coffee afterwards. It made me really appreciate small pleasures in life.

Best tip I can give is: pay yourself first, always.

Then whatever is left you live with.

Start with like, 5% of your salary goes to your savings, and live your life ou of the 95% left.

Consider that 95% your incoming, and that's it, keep going. As your salary increases, you can increase your own payment. And keep going.

I've had times when things seem to have spiralled out of control, luckily I have a hidden alter ego called CF (not the usual MN CF), this one is Control Freak. She takes over and starts supervising our finances every single day.
Before transferring money between bank accounts was so easy, I used to withdraw in cash everything apart from the direct debit/standing order bills then forget I had a bank account. Divide the money into 4 and give it to a trusted relative, who then gave me an envelope a week. Of course, this was a time when cash was more acceptable.
But nowadays, if I have to rein it in for a month or two, I transfer everything to an instant access savings account and only transfer back as necessary. Do the skint week earlier in the month.
Also take five minutes every day to look at your banking app and think about what's gone out, what's coming in, and what's coming up.
I make a lot of credit card purchases online and pay it off each month. But I look at the credit card transactions every day and keep a note of the type of transaction - personal, household, Xmas, purchases made on other people's behalf (adult dc etc). Then I factor those into the separate budgets (and get any money owed to me) so that the money is there on the day it's needed. And nowadays, a credit card isn't limited to one payment a month when paying online - you can pay as you go too.
I usually find after a couple of months I can put CF back in her box.

I'm a debt counsellor.

I start with a blank piece of squared paper
We write down all the income in one column, then all the essential monthly outgoings in another (this includes housing, insurance if paid monthly, utilities, essential contracts, set debt repayments etc).

We then make a list of all the other monthly expenses, so food, entertainment, streaming services.

We make a list of debts other than mortgage.

Finally a list of less than monthly costs, so insurance paid annually, car tax, clothing, presents. We divide the total by 12 to apportion it.

I then do the maths with the client.

It's that final list that seems to really make people struggle, keeping money back for less frequent expenses, they then overspend instead then need to borrow starting a spiral.

Renegotiating debts is actually not that common, once people have a clear written budget they stick to it, and I'm really pleased for them when I hear that they are now ok.

Op you can do the same for yourself, then arrange a saving amount to come out the day after pay day