Where is my money going?

sashadavis

I also made the big step of sticking to my new years resolution and seeing my bank manager yesterday to sort out my accounts and I feel a lot better for doing it! They will take you in a private room and go thorugh your statements to see how your accounts can work better for you. Made it a lot clearer having someone else trawl thorugh my spending without me brushing it off!

opinions4u

sashadavis wrote: »

I also made the big step of sticking to my new years resolution and seeing my bank manager yesterday to sort out my accounts and I feel a lot better for doing it! They will take you in a private room and go thorugh your statements to see how your accounts can work better for you. Made it a lot clearer having someone else trawl thorugh my spending without me brushing it off!

Did they flog you any new products?

Fiddlestick

weezl74 wrote: »

The only spanner in the works is if you made a lot of cash withdrawals and spent those, as you may not remember what you used the cash for.

That was always my downfall - withdrawing cash for general spending and then not being able to keep track of where it was all going.

Cash-Strapped.T32

Desperate_Housewife wrote: »

Also try to pay cash for everything and avoid cards.

Bloomberg wrote: »

Believe it or not, if used properly the best spending diary is a credit card.
Make sure that everything you buy is put on the credit card and do not use cash at all. Beware of using the credit card as well as spending the left over money in your current account. Good luck

Highlighted these two posts just for comparison's sake;

Personally I take the second line - I try to do all my regular spending on my debit card (making sure never to fall into the "less than a fiver = £1.50 charge" trap in cheap & nasty shops), as it really does provide the best spending diary, albeit with a 2-3 day delay effect.

With me, cash is the more "risky" format, because it leaves no trace after it's gone, of when you spent it, how much & what on - and it just feels insignificant in your pocket/wallet, so you're more likely to spend it on something frivolous - Like going shopping while starving;
You know there's a psychological effect making you impulse buy, but even with that foreknowledge you do it anyway.. :eek:)


Now, I've by no means got it all sown-up so don't think I'm being all sanctimonious & that, but when I began to turn things around I made the concious decision to drop cash as much as possible, & use internet banking to regularly check my spending.

Then, after a month of this I removed everything from the equation that looked like a waste (£15 petrol ok, £3.50 the next day on cobs & sarnies not so), which in theory leaves only the mandatory expenses left, your running-costs as it were.

This is then the monthly budget amount, and your job from now on is to try & reduce this as much as possible.

Ok, it took 6 months or more, but I cleared my O/d (which I was living in for years, and regularly bumping up against or just over the limit), and for the first time ever, look to be in a position to put some money away this year - it's made the world of difference & all I had to do was give up everything that is fun! ( :rotfl:)

mlz1413 wrote: »

Keep only transferring £100 from savings to main account (so you can draw out in cash) for the whole month and again keep the diary so that you can analysis this at the month end.

Also an excellent idea imo, but again, I eschewed cash as much as I could.

What I do is dump *everything* into an instant savings account on pay-day, bar what I will need for the first week of the month, plus maybe a tenner or so buffer.
Then, every weekend, I do the same again; Look what will come out on next week's expenses, and transfer that amount over from savings into my current-acc (the £10 buffer should still be in place - if not, time to review your calculations).

I make it sound long-winded but it becomes like second-nature, especially so because in practice you become *far* more aware of how much money you have at any time, it just makes you generally more on the ball, so you don't take those ATM trips to check the balance, or end up logging onto IB just to find out how little is left.

I can clearly remember times when I've passed a cashpoint, needed to take some money out, but not dared press the "balance" button because I'm scared of what it'll tell me.
What I've described (as have others, using cash) is only the merest iceberg-tip of actively managing your accounts, but it really did change my life in that the certainty of knowing I'm budgeted-up for the next X-amount of time lifted a massive weight off me that I didn't even know I had - it must be like what curing depression feels like! (j/k, don't get the flamers out quite yet.. )



Of course, for this method to be of any benefit, I had to clear the O/D first as it's no good making a few quid in interest only to lose it times-many the next month in debit-interest, but once I got up to speed I found it an easy method to maintain, even if some months I don't have any *extra* cash left over.

It's an adequate method; clearly, the reasoning behind pre-bagging your week's cash into envelopes is to manipulate yourself (incentivise is a kinder, though less accurate word) into staying under a certain spending-limit.

However pre-allocating money to be spent on the debit card also gives me that cheque-like 2/3 day clearing time, so that if the worst happens & I'm out and about, and I need to shell-out £50 by the roadside on a dark wet Friday when my weekly running money is nearly gone, I still have a couple of days to go home, log onto IB & transfer a bit more over to cover the debit card - I'm not stuck fumbling for cash that I didn't think pre-bag on Monday..


I also keep a very basic spreadsheet on my phone's memory, which details my balance, and the itemised list of these expenses which are "ticked-off" when spent.
(done once in December, and simply copy/pasted 12 more times to give me a full year's worth of spending diary, with the balance running all the way down to the bottom because spreadsheets are cool like that)

This neatly avoids any circumstance where a longer than average clearing time on the debit card gives a misleading balance.
If I stick to what the spreadsheet says, I always know my exact balance at any time (I often check & it's not been wrong once), and these days I often don't even need to check it.


Again, I've made all this sound very complex I'm sure but it's dead easy in truth - The most important aspect is that it's a method I can stick to; That's how sensible people end up being well-off (..and one day I might grow up to be just like them..! )

best of luck however you go on.

jen245

Very good post cash-strapped, I adopted much of the same tehniques, which saw me clear all of the remainder of my £15000 (built up over about 4 years) last year, and I now have a few thousand in savings too!
I, like you, ditched cash as far as possible. I take £10 out at the beginning of the week for work expenses, and make it last. When I get paid, I work out what I need for the month, plus a little extra for contingencies, and the rest goes in my savings accounts. I monitor my balances every day via internet banking, and I find that this has worked very well for me. If its not in my current account, I cant spend it, and it has really made me look at the amount of money I was wasting on crap I dont need!

cbassno3

Some really good posts on and very helpful. Once you have recorded your daily diary and matched up your spending with your receipts is it best to keep the receipts once recorded or shred them? I'm always looking of ways to improve my budgeting each month to have more money for the good things in life.

maggiecon

Thanks everyone for the hints and tips.

I downloaded a spreadsheet from the internet to keep a track of everything. and will hopefully have a good idea of were I stand by the end of January.

Although now that I am keeping the diary I am always thinking before I spend so my spending has come down already:D