How to make Budgeting work??

joey2307

I used to, but don't anymore as never got anything in them, set up a load of different e-Savings accounts with my bank - one for food, one for bills, one for car repairs etc and at the start of each (pay) month transfer whatever I'd allowed to each of those, then at end of month if anything left over it stays in there. Then the idea was if any of the accounts had a decent amount left over we'd have a treat with it at the end of the year.
Never quite worked like that because my current account was always overdrawn so the money I'd transfer was best of sitting in the current account still making interest as low as possible. But with all money in one place it takes a lot of discipline, which I'm afraid I don't have!

One thing that may help is giving up cash as far as possible.
For example, our local par 3 golf centre (used to) charge about £6 per round and they only accepted cash (which was fair enough for a small local business of that nature) but because of this we'd always go to a cashpoint first - there you can only draw out £10 minimum and so the £4 change from golf would just end up getting "wasted", perhaps on cans of drink or a beer on way home. So the rest of the £10 just went. Whereas making all payments by card (I use debit rather than credit) you only pay the exact amount and that spare £4 would stay sat nicely in the bank account - scale that up by similar situations that occur during the month and you may make a fair whack of savings.

northerngirl30_2

I do one thing that sometimes helps! I empty all my change in purse into moneyboxes everyday, leaving a few quid in my purse, pounds and 50's in one, 10's 20's and 5's into another and coppers in a big jar, then towards the end of the week instead of taking another tenner etc out if I need milk or smokes I try to use the change pot! then every few months I count up my coppers and pay them in at bank, usually about a fiver every couple of months? not really big savings but it all helps I guess... not sure how the spar feel about buying smokes with £3 worth of 5's and 10's but they take it! lol!

I think I'm going to try paying for as much as I can on my card in the new year, see if that helps! esp as natwest immediately update your online banking, so no ''forgetting'' I paid for petrol etc!

Verbatim

I do a budget every month on payday with all the dds etc and cheques due to be paid plus a list of my and oh's cc balances, which are paid in full without fail every month. I estimate what we'll need for any social occasions or extras and start juggling!

I menu plan for the month based on what's in the freezer and cupboards. In a flush month I stock up on basics (and will buy basics brands for many things) like pasta, pulses, tins of toms oil and flour. I like to keep enough in so that we could cope with a sudden drop in income which happens from time to time. In lean times I can cook from stores. If I can I'll make 2 or 3 of something and eat one and freeze the rest. Our income fluctuates wildly so I also remind myself that we'll have large bills to pay, sometimes unexpectedly, and usually in a month with less income than expected so that I save anything I can.

Verbatim

Oh and the budget will include "cash" which covers incidental shopping/ top ups and all other spends. I check the bank accounts daily on line so that there are no nasty surprises at the end of the month if I've forgotten something. And we don't take out cash except as agreed and then leave some at home or it will get spent at once!

david_hellier

The real function of a budget is to prevent overspend. The encouragement of overspending by the banks is the main problem with the economy, and they will look for ways to perpetuate this, for example by the introduction of contactless cards. The complete elimination of paper money is their long term aim so we as consumers must pay hawkish attention to exactly how much is available to spend.

One of the best ways to tackle this is to use the weekly subtraction method. Firstly work out all your income. If your income is monthly then divide this by 4.33, this will give you your weekly income. Note it.

Then work out your monthly essential outgoings, but exclude food (more later). Divide this by 4.33 to give you your weekly out goings. Note it.

Take the outgoing figure from the incoming figure. This is the weekly Start amount available to spend on anything else including food.

Get any little notebook and write the Start figure in it at the start of the week. As you spend or withdraw cash deduct it as you go. Try to get to the end of the week with some left in it and carry this forward to the next week and add it to the new Start figure.

Using this method ensures you do not overspend. I suggest you include food in the Start figure because the amount we spend on it can vary widely. My personal experience shows allowing a specific amount for food is impractical, however, it's up to you.

This method also requires you to effectively ignore your bank balance, because it is meaningless on a day to day basis. What you should see is it increasing steadily.

Also remember to include any od charges, interest or other fees in the essential outgoing list, otherwise overspending will continue.

Other top tips: stop using credit cards for further spending and make FIXED repayments, never the minimum.

I have an excel spreadsheet which can work out the Start figure if you PM me with an email address.

Wishing you all a happy new, prosperous, debt free New Year.

Dave

fannyadams

icklepiggle wrote: »

Thanks for your posts :A
I think we will try the monthly envelopes for food & clothes & keep the debit card for big things like fuel. Then give ourselves a bit of cash pocket money budgeted each week so we have a limit on buying coffee/ crisps etc. at work

it's so inspiring that you ARE dealing with your debt and that you are giving the budgeting thing a go. YAY YOU two :j be proud of what you have acheived so far as well as looking into the future.

if you want to save a bit more you can buy crisps (around 35p/packet) and coffee (I assume you can get hot water for free) at the supermarket and take them in to work. that way you are not tempted to spend your pocket money at work. It worked for me, I take pack ups now and rarely venture into the canteen unless the 'big boss' is over from USA and is 'treating' us.
Also you could try to have a few No Spend Days (NSDs) in the month. it soon mounts up and you'll find your bank account increasing steadily as others have said.

Seasons greetings and best wishes for a great new year.:beer:

FA
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halesy

You might not like multiple bank accounts but it really works for me and I've seen my credit card usage drop a lot. My accounts are...

* One where money comes and where my cash spend comes out
* One for bills
* One for my car expenses
* One for holidays
* One for groceries
* One for savings

By creating a budget based on this you can manage your money effectively. By seeing my bills come and go I've been able to reduce spend on that. While the yearly MOT/service/tax for my car is always a hassle, at least I now have money put aside for it.

Each week I take out money to last me that week and don't (?) go back for more.

I've also stopped buying coffee's in the morning, have my jar of coffee at work, and now bring in lunches most of the time. Both of these have helped save at least £40/week, that's £2k/year!

I like the idea of using cash for groceries, haven't got around to trying it yet though.

moneypenny2k

My way of stopping myself overspending and making my money go as far as possible is this.

My money goes into my bank account which I keep track of using MS Money. All my bills are paid for on SO or DD and I have these automatically entered in the Money account. I then have a weekly amount that I schedule for my day to day spending, food, treats, petrol etc. I take that out on a Friday and put my cards away. When my purse is empty it's empty.

I've built up a 'cushion' of £500 by keeping spending low and this allows me to deal with any unexpected spending, such as new tyres etc. If I dip into this money I schedule a repayment as if it were a debt.

Hope this helps. Good luck to you I'm sure you'll get where you need to be.

esthomizzy

I also operate a several bank account approach. In fact my system is quite complex so most people would probably think why bother. It works reasonably well most of the time but I do have slipups especially at this time of year because I hate to buy presents that are just for the sake of it and it's hard to find things people will actually like or that they couldn't have bought themselves if you are on a budget. I have a template spreadsheet which I create a new individual spreadsheet from every month with all my anticipated outgoings for that month as well as expected income at the bottom. The total spendings is subtracted from the income and I try and balance the budget. I have a few months into the future spreadsheets on the go at any time so I can plan upcoming months big bills. In the unlikely event that there is any left over I can save or invest it.

I have a bank account for all my bills (everything that can be paid for free by direct debit is). I pay some big bills on my credit card to get the points (while putting the money aside in another account ready to pay the bill). Be cautious of items on monthly direct debit where you get charged a fee for the credit (health insurance, pet insurance and car insurance are common) compared to utilities which reward you for using a monthly direct debit. I transfer my cash spending to a separate cash spending bank account weekly (for me 70pw cash spends, to include, snacks, lunches, coffee and anything that I can't use a card for). I also run a credit card weekly budget this includes everything else I need that isn't a bill (entertainment, food, travel). I can spend 100 per week on the card (443 per month for a 31 day month). I recently upped this from 80 on the card because I was finding it difficult to stick to. I have to say I've failed miserably in December but that's partly because I didn't have a specific christmas present budget and was trying to eke it out of my 100quid. The idea is that I have a bit left over afterwards and that can be saved for presents, holidays and other big budget expenditure.

To try and rein in my spending I also chalk up everything I buy in spendingdiary.com so I feel bad if I've bought lots of unnecessary stuff. The thing that I find most difficult is entertainment spending. I don't like to be stingy and I often find myself in more expensive bars than I would like to be in buying more expensive cocktails than I can afford or even just getting stung for more booze than I can possibly drink via buying rounds. Going out with someone that has a lot of disposable income has both upsides and downsides too. The upside is (well in my case) that they are kind and generous but the downside is that I sometimes end up with it being easily my turn to pay for lunch or drinks or something when my budget says that I need to return to base and eat homemade ham sandwiches for a few days. So although it's possibly a bit antisocial, staying away from people and shops is a good budgeting tip when you are struggling. Especially cash/card splurge and worry about it later friends whose attitude is catching

On a slightly unrelated aside. Check your utility bills are still competitive. I was with npower and I stuck my Kwh details moneysupermarket comparison and it claimed that sign online 20 would be cheapest saving me 180quid a year, so I rang them up to see if I could switch from sign online 10 (what I'm apparently currently on) to 20 with a view to going for the next cheapest company which was only a little more if they refused. They agreed straight away (as long as I provided my meter readings) so i'm now paying 60 instead of 78pcm for gas and electric (2 bed flat in london) and she said I could go to 55pcm but I said leave it at that for now as with it being winter best be on the safe side. Every little helps.

Anyway sorry I ramble. Have a good moneysaving christmas everyone

cat4772

I found the key was planning, adapting and planning!

i.e. you'll never start the DFW journey one day and the next be following / implementing ALL the tips and tricks. We do the big things first to reduce outgoings (cancelling gym memberships / outdated mobile contracts / changing utility & insurance suppliers). Once we've done these things we start to look at the smaller things such as menu planning and grocery challenges. Again, if you've relied on takeaways, you'll not be cooking all meals from scratch the next day. The trick is to make steady improvements. Cook one meal from scratch for a couple of weeks. Then cook two meals. Visit the Grocery challenge in food shopping for ideas in inspiration.

A spending diary is a good tool - I personally like the deduction method, starting with money available and deducting spends until money has gone.

Good luck