How do you manage your finances?

[elena2]

It's (one of) my New Year's Resolutions to get in control of my finances this year and stay that way.

I am absolutely hopeless with this kind of thing, and always tend to run out of money well before the month is over!

We have no kind of system to plan how our money will be spent or how we will budget for the month ahead, and I've had enough of the lack of control and getting nasty shocks when I go to the cash machine!

How does anyone else keep track of where their money goes? Do you plan in advance how much you will spend on groceries, eating out, etc?

We pay most of our bills by Direct Debit and have arranged these to go out within a few days of dh being paid. We budget a certain amount each week for groceries. We also set aside a certain amount for dh's travel costs and lunches for when he is at work. The rest is there for unexpected extras (repairs etc) and small treats, eg a bottle of wine. Our income is fairly low so we HAVE to stick to this system.

Answer to that question is ..... BADLY

Hi Elena
I have an excel spreadsheet. In one row I have incoming and in the next outgoing. I note everything done (petrol, phone voucher, food money, going out money, nappy money, bills - EVERYTHING!!) Then I know exactly what is coming in and going out.
I know this sounds organised but this is because I got so far in debt I had to do something drastic.
When I was really hard up I used to go and buy vouchers from the super market at the beginning of the pay month to make sure that I would always have money for food! (Most supermarkets sell vouchers - Mine were from Tesco).
I always leave a sum of money - a buffer zone - incase something unexpected happens and then what is left (often not alot!) goes into a savings account.
I find that if I organise myself then I am less likely to go to the cash machine - which is a good thing beacuse when I draw out a tenner for something small I will spend the lot!
Hope this makes sense. Good luck!

Thanks Lyndsey, I think a spreadsheet sounds like the sort of thing I need.
We've got a few debts we need to pay off, they've really been going nowhere for ages, and I want to tackle those most of all.

I think for me it's total control like the spreadsheet allows you, or total disorganisation like I've got at the minute. I don't think there's a middle ground that would work for me, as I would probably slip back into my old habits!

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My mum keeps all her receipts, and at the end of each day she writes what has been spent and deducts it from the amount in her account, so she always knows where she is up to.

I want to plan how the money is spent as much as I can, rather than add up what I've spent at the end of the day/week, as we tend to spend an awful lot on eating out cos we're too lazy to cook!

I now have an organised spreadsheet so I know what is going in and out.

I still totally ignore it though and just buy what I want without thinking and wonder where the money goes. Need to put an electric shock device on my switch card to remind me that I do not have unlimited cash.

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I've only done it on paper, really simply, but it does seem to work. So heres my Noddys Guide to Budgeting: first work out all the regular outgoings (debt repayment, mortgage/rent, bills, etc- things you have to pay.) Make them monthly even if they aren't actually - eg, £90 quarterly phone bill is £30/month. Then add em up. This is your OUTGOINGS. (don't include stuff you spend at Boots/Sainsburys/Starbucks/Ebay etc yet).
Then on a new bit of paper put down all incoming money - your salary, partners if applicable, any benefits, rent from lodger, whatever. This is your INCOME. Hopefully INCOME is bigger than OUTGOINGS - if not, you need to do somthing drastic (change jobs? Take lodger? Get interest free loan or low interest loan to consolidate debts?).
Assuming there is some left over, this is your SURPLUS. This is all the money you can spend each month, on everything that isn't already on the list - so this surplus has to cover supermarket, clothes, holidays, etc. If it is ridiculously too small, go back to the do something drastic list. If not, plan to only spend this much each month. (if it is enough, you could put aside some of it - say £100 a month - to save for a holiday, new car or whatever you need). I do this by just writing down every cash withdrawal I make and every credit/debit card purchase I make in a book, and adding it up each week to check I'm on track. If i go over one month, I have to spend less next month. If you find this hard, you could get a weekly allowance out in cash and only let yourself use that.
Its tough and a bit depressing seeing all the figures there and writing down 'Boots - £12.93' in a little book , but it DOES work....

elena - the thing about budgetting is it's very hard to do if you've no clue as to where you are at the moment. If you keep track of things for a month or so, as others are describing here, then you can see where the money is going, and set realistic budgets and targets, and think about where it's possible to tighten up.

For example, if you decide today you're going to budget £60 a week for grocery-type-shopping, but actually you're used to spending £140 a week, then you will soon get completely fed-up and discouraged, and give up.

I used to have the problem that when I went to the bank to check my balance I could never remember which direct debits hadn't come out yet and used to go overdrawn all the time. What I do now is I have 3 bank accounts (all with the same bank). When I get paid, the bills money goes automatically into one account where all my direct debits are paid from and an amount of spending money goes into a spending account. The spending account I can draw from for childminder, food, petrol etc, in other words anything that is not on direct debit (I do have fixed limits for how much I can spend on each of these things). My third account is the account where my wage goes into originally and hopefully, after transferring money to the bills and spending accounts, there should be a little left to save. I'm not the best person with money but at least I know my bills will get paid! All my bills are paid monthly eg gas, electric, tv licence, car insurance, water rates, council tax etc etc. I add these all up for the month and that is the amount that goes into the bills account. Hope this makes sense!

Well, I've just set up my very first spreadsheet!

I think I've budgeted reasonable amounts for everything, we'll just have to see how we get on.

Good luck elena. Have been in all kinds of debt so if you want any help (or even just to have a moan) you can always e-mail me.
One last thing dont be disappointed if you over spend at first it takes a while to adapt. x

We have a low income so every penny is budgeted for.

I write down all the outgoings i.e rent, council tax, gas, food etc add them all up and divide between dh and myself and divide by 4 weeks, all our bills are paid monthly mostly by direct debit. I round it up so there is always some left over and Dh is paid weekly so if it is a 5 week month he actually pays more, not sure if he's twigged this yet, lol So we both then put in the same amount each month to cover the outgoings and have a little bit left over at the end of the month.

Out of that money I also budget food money which is X amount each week and we have to stick to that, so I do a meal plan buy in food accordingly and once the shopping money is spent that's it. But as I said at the end of the month there is always some money left over which is our(very originally called) End of month money which is put away either towards a holiday, christmas, something we want to buy for ourselves or incase of an emergency.

I also do a spreadsheet on my computer where I put in all the incoming money and then the outgoing money and it tells me how much I should have left at the end of the month. Usually all comes out about right give or take a few pounds.

We also have a very low income and debts as our house was repossessed in early 2001. I am in total control of all money that comes in (my dp doesn't even have his cash card, his choice). I'm not always as organised with it a s i could be and we have sometimes run out of money before the next pay day but mostly we manage o.k I agree though that you have to be realsitc about your outgoings otherwise there is no point. I used to budget 60 quid for food when i knew we really needed to spend about 85.

Thanks Linnet,
I like the sound of 'end of month money', it's been a long time since we had some of that!

That's what I'm aiming for, along with not buying things too much just for the hell of it (or to cheer me up!), making a good impact on our debts, and not being lazy and eating out a lot! I'm going to start doing a 'meal' shopping list as well.

Lydnsey, thanks for the offer of a chat, you sound like a good person to ask if I need advice on money stuff.

LINNET, i wish i could be as organised as you. I'd love to have my meals planned in advance and have tried several times but it's never worked.

I use a method my Nana calls Jam-Jar accounting. I work out how much I spend on each thing each month/week and put that money away. I save each month (1/12th) for things like Car Tax, Prescription Prepayment, Vets bills and give us each an allowance for petrol, shopping and spending. Then when a big bill (car tax or cat injections) arrives I have money ready for it.

I also draw cash at the start of the month and when it runs out there isn't any more!
But it works (whether you use a spreadshhet or a piece of paper, it doesn't matter as long as you do it)
BTW I have 16 DD and these come out of a separate account than the savings and the spending. BUT i do check my statements each month

Good Luck

Talking of Grandparents, KatieMac, my Grandad used to tell a story of when he and my Gran were young and hard-up after the war.

They only had enough money to pay some of the bills at times and used to put everyone's name and amount owed to them in a hat, then draw out names until the money ran out.

The 'insurance man' came round one night for his money, and my Grandad had to tell him,
"Sorry, we could only pay so many, and your name wasn't drawn out of the hat."

The insurance man was predictably unimpressed and began complaining about getting his money.

"Look mate," said my Grandad, "If you don't stop moaning, your bloody name won't even get put in the hat next week!"

Wish you could deal with debt like that these days!

Put EVERYTHING on direct debit. This really works as I never get unexpected bills. All my dd go out on the 1st of the month, I get paid the day before. My wages cover all our dd's and dh pays for groceries and goodies with his.

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DH pays mortgage and bills. I buy groceries, kids' stuff and other occasional bits (eg birthday pressies). I'm part time now so this works out well for us.

I don't make plans or budget. I just keep an eye on what I'm spending and try and cost out meals (though only in my head as I'm wandering bored round the Co-op).

I budget ahead... knowing what income versus house bills (electricity, phone, insurance, etc.), housing, child-care, and food are likely to be for that month. So I might conclude I have £5/day to spend this month on 'miscellaneous' (DH gets an equal 'allowance' ). I keep track on the calender what 'spending' day I'm on. Whenever I get cash out of the bank I literally put it in a yogurt pot in the bedroom and maybe pull £10 out at a go, crossing off 2 days on the calender. This is the only way I can be absolutely sure not to over-spend. Have to remember to update for any credit card purchases, too. Once in a while I've gotten ahead of myself, but so far, so good. We are keeping within our means... although at the moment, anything "big" will probably have to come out of savings (like when the washing machine seemed to pack in last week).

we did the same as someone else. for about a year had a really anal spreadsheet and put everything down (with nominal budgets). then after that we worked out how much we need a month for everything.

controversially we don't pay everything by monthly direct debit. i have found in the past that i've been up to £80 in credit with british gas etc and i'd rather have the money. so instead we work out what our annual utility bills are and divide that by 12. we then pay this each month into a separate account and pay the quarterly bills out of this. we also worked out an annual budget for car expenses (tax, services, tyres, general maintenance) and all birthday and chrstmas presents plus sundry other things and pay 12th of that each month into an account. sometimes the account looks brilliant but then a big bill comes in but we can always pay it.

the only word of advice is to be realistic about the food budget. we worked out we were spending £400 a month on food and booze which seemed excessive. however when we realiased we were now where near touching our "going out" budget (how can you with a toddler) then it was more in perspective. if it makes you miserable to buy Tesco value biscuits and battery farmed eggs then you won't stick to it.