Help me become a financially responsible adult

[sylv165]

In the past I have been terrible with money. Very guilty of impulse spending, building up credit card debt that I don’t pay off, not properly budgeting for unexpected expenses and not saving adequately. While things never got out of hand or totally unaffordable, at times card repayments have taken a significant chunk of my income and caused me stress.

Over the past few years I have decided to sort myself out and now, at the grand age of 45, I have finally cleared my credit cards! I have also been trying to save as I go and have built up a small pot of £10k in an ISA, as well as pots of saving for some specific expenses I know are coming up like holidays, school uniforms, etc. I have around £3k in Revolut pockets, but that is all allocated.

This is a definite improvement but I still don’t feel organised enough and really don’t want to slip back into my old ways. What advice would you give me to make sure I am budgeting well and making the best use out of my money? I am still liable to impulse buy and really want to knock that on the head as much as possible. My focus needs to be on saving more and building up a proper safety net I think, but really keen to know how much I should be aiming for and how to optimise interest rates, etc. And any tips for

If relevant, I am married with 2 kids. We have separate finances, but both contribute to a joint account for mortgage, bills etc, as well as another joint account for day to day family expenses. Then we each have our own accounts for personal expenses. I have a pretty secure public sector job, working full time with a salary of £71k and as such I should also have a decent pension when the time comes. We jointly own a property with a mortgage, worth around £650k and mortgage is just under £300k.

All advice gratefully received!

Head over to FB and/or YT and find Rebel Finance School…it has changed my life (I swear no exaggeration) financially. It will show you all you need to know.

Oh fab, thanks @Mum2Fergus. I will do that - find myself some like-minded financially responsible adults now have got my act together 😂

I second rebel finance school 👍

We do similar with our finances. With my remaining funds after transferring to the joint account, I move some straight to an ISA, and leave myself about £500 a month to cover personal spending, which would limit the inpulse buying in your case?

Something which has made a big difference to me is setting myself a weekly budget. I don’t move any money about to different accounts but just in my head I know what I have at the start of the week and what I’m allowed to go down to by the end. Household direct debits all go out a different account so this is just food and haircuts, clothes, lunch out, petrol, etc. it’s halved my spending!

anything I haven’t spent that week out my weekly allowance gets transferred to a savings account

The financial flow chart can be used as a 'to do list' of what's needed in what order, so if you see any gaps, that's what to focus on.

With a mortgage of £300k at 45, that's quite a lot left to pay so you'll probably expect to be working until state pension age or quite close to it? Also having DC, university costs etc.

What does your DH earn and what's his attitude to money? Is he better or worse than you/what you're aspiring to? Do you feel that separate finances are fair? Also, unless your DH earns over £80k after pension costs, you're in the position where you're entitled to some CB but not all of it, so are you on top of this to repay as needed?

I would focus on setting a really comprehensive budget and sticking to it. Moneysaving Expert has good advice on this. Also minimising costs on things like phones and broadband, if you don't regularly check the prices of these, you can pay way more than you need to. If you get their weekly email, you can get ongoing reminders on how to improve your finances.

Budget Planner: how to manage your money - MoneySavingExpert

As for saving and spending, put away money for planned and irregular expenses before seeing money as available to spend - set up standing orders to come out on pay day. If you think about Christmas, holidays, insurance, car maintenance, replacement of white goods etc etc, this can be a significant amount of money, hundreds of pounds a month, possibly over £1k. So you need to account for this before seeing money as 'spare'. Also any planned big purchases like car replacement or home improvements. If you have a decent income and plenty disposable, you should largely be able to fund these without borrowing.

I would split my money into different accounts - a bills account, savings for the things mentioned above, day to day family essentials - groceries, travel/petrol, sundries like presents if DC go to a party etc, things you can't avoid paying for, although it's worth considering whether you're overspending on these areas, your grocery bill could vary by hundreds of pounds a month depending on what you're buying for example.

Then you need some personal money for you, that you are allowed to spend without worrying. Set up a standing order to a separate account, the amount is whatever is affordable after all essentials and family costs are accounted for - you can spend this on whatever, but when it's gone, it's gone. But you don't have to spend it all in one week/month - you can just leave it to roll over until you see something you want later.

If you don't already have a suitable account, look at Chase, Kroo, Starling, Monzo etc, you can set up an account quickly in the app and get a card that you can add to your google/apple wallet straight away. Or I think you can set up another space in your Revolut account.

Well done, it sounds like you’ve really turned a corner.

if you’ve not already used it, use MSE budget planner to have a good overhaul of your money.

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

Also, it’s okay to have a small treat. Can you budget ‘fun’ money into the equation so you have £20-£50 a month to splurge if you need it?

If I was 45 and working in a public sector job, my priority would be my pension / id be putting £200 extra in pension each month if not more for the next 5/10 years. Firstly if you put in £100 it’ll only cost you £70, so putting £200 in you’d see a decrease if £140 in your wages

then I’d be looking at maxing out my ISA with a steady monthly standing order each month on pay day. You can go for half in a cash isa and half ina stocks & shares or all in one or the other. From April 2027 the limit for cash isa will be £20k

then keep all your pockets going, but do have a treats pockets for weekends or holidays when you might want to buy something nice

Good luck, and welcome to adulthood 🤣 I was a single mum at 41, first time buyer at 42…a crazy spender my whole life. Today I’m debt and mortgage free, and retired at 56. Life is good!

Well I did the first session of Rebel finance last night and then spent some time understanding what I actually spent last month. Well that was quite the eye-opener. Apparently I spent almost £500 on clothes 🙈😰. If you had asked me, I would have said maybe £200 - one big primark shop for kids stuff for holidays, a couple of bras for me and a pair of M&S work trousers. Turns out I had forgotten about new outfits for each of the kids to wear to a family party plus a top for me, a sneaky dress and a a couple of vinted purchases. I’ll be back in debt before I know it if I continue with nonsense like that! Anyway, eyes opened and habits will change!!

@BjorkdiditDH earns more than double what I do, but contributes a proportionately larger amount to our joint account so it all works out. I know separate finances doesn’t work for everyone but it generally works for us. And he is MUCH better with money than I am (stereotypical Yorkshire man - definitely a saver rather than a spender!). I don’t have massive visibility of his savings but I know he has at least £20k in savings, a Sharesave scheme through work and some other shareholdings.

Wow that is very impressive. You are now my financial inspiration 😉

Between you, me and the gatepost … I’m one of RFS Ninja’s 🤣 we support Alan and Katie run the calls … welcome onboard! Let me know if you’ve and questions…and good luck on your journey x

Ah well if you see someone posting about how they might have spent the GDP of a small country on clothes over the years - that’ll be me 😂

A monthly budget is usually the best way to keep on track and a bank account that tracks spending. We always saved and rarely took out debt except interest free. We paid off our mortgage at 50 and retired at 58. It would have been earlier but we helped our kids through uni and on to the property ladder. It sounds like you have a fair bit of disposable income so once necessities and bills are budgeted for I would divide up your remaining disposable income into 3. One third to spend on things like clothes, entertainment etc. one third in short term savings for holidays, home improvements and one third long term savings like pension, mortgage overpayments etc. also make sure you are saving for things like Christmas, insurances, white good replacements and car repairs etc.

well done OP. I think it’s just about being very careful about your spending and then investing the leftovers sensibly. I have index funds in an ISA (and some other stocks for fun) they’ve really boosted what I have in savings

you really need to be a joint team with your husband but I can understand why he hasn’t been involving you in the bigger picture whilst you’ve been irresponsible with debt and spending.