Changing Spending Habits?

david_hellier

Plan a spending diary in 2011 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 ( a spending diary) 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

backinbusiness

Hi there - cash disappears from your purse? - card debits disappear from your bank account just as quickly (and are more easily forgotten about) - but using cash I found made purchases that bit more tangible. After I'd budgeted (properly and honestly) I allocated a certain amount of cash to see me through each week. I withdrew the cash on the Monday and once it was gone it was gone. It became a challenge to see how much I could have left over (for the surplus savings account).

Catslovelycats

What has helped me (and bear in mind this is only since start of Jan, so I can't prove any longevity yet!):
1. keeping a note of all my spending (started this in Nov)
2. set a budget
3. include saving and mtg OP in my budget
4. i check my bank account & the account & budget details on my IPOD everyday to see what's happening
5. i find that having target amounts to save and put towards mtg helps me monitor and control my spending (so far)
6. join groups such as the toiletry one, the clothes buying one, the grocery one, no spend days one so you're with like-minded people who can keep you on track and encourage you
7. create a signature or a document somewhere that tracks how much you've spent/how many items you've bought/what you've saved etc etc to suit you

best of luck :T
my thinking has certainly changed since Christmas and hopefully i can get some good money habits established.
I'm sure you'll be successful - peeps on here won't let you NOT be! :rotfl:

Mr.Mulla

Mumof4 wrote: »

This is how we have changed our spending habits and plan to pay all our debts off:

We bought 3 purses
1) we put our grocery shopping in it for a fortnight
2) we put our petrol money in it for a fortnight
3) we put our 'spends' in it for a fortnight

If there's anything left in any of the purses by the end of the fortnight we either buy something we need or put it in the 'spends' purse for emergencies.

We have found this a really good way of managing our money and not spending it on rubbish
We are trying not to use our debit cards at all, this way I can keep track of what's going in and out of our account. I also use a spreadsheet to list everything financial.

I'll second you on that Mumof4. That was also how my wife and I used to allocate our budget during the early years of our marriage, when we were trying our best to save enough cash to afford us a purchase of a house and it worked wonderfully, so I would highly recommend it to the OP.

Wee_Pilsbury

Lots of great ideas from other posters - doing some or all of what has been suggested will really help.

My weakness was the[STRIKE] credit [/STRIKE] debt cards. At one point I could hardly imagine going out and not having them in my purse "just in case." The problem is that just in case would become "Oh I like that!" and before you know it another £30 or whatever would be added to my debt. It even got to the stage that I would buy something on the card even if I had the cash to buy it :eek:. Sheer madness.

Anyway, in what I would call my LBM +, I took the cards out of the purse and put them into a drawer. It was hard at first going out without my security blankets but I can honestly say that 6 months down the line I never think about them at all. I would recommend doing something similar.

Good luck

January20

£600 for a tumble dryer? :eek::eek::eek: Is it just me? As you can get them for as little as £150! (perhpa I've just gone too MSE lol!) Was it a special one? Is that the problem: that you buy top of the range and disregard cheaper items? Do you do a lot of research before making a big purchase? That might be a starting point.

determined_new_ms

hi op (sorry forgot ur name never was good with names!) I found that I got a thrill from killing my debt (became DF on 25.10.10 :j),so reduced spending as much as possible - joining a few challenges is fantastic, you get involved with others and the comaraderie really helps. So as an example I joined the crazy clothes challenge last year and set a target of £300 for the year for clothes, made it easily (CS & ebay mostly) and now I find it hard to spend money on clothes!

I love irish coffees but hated spending £5ish a pop so started making them myself for a fiver I can be laughing all the way through the Sunday!

I agree with "allowing" yourself some pocket money and when you haven't spent it rolling it over to the next month - I've had £15pw in jan but as I haven't spent it I have £36.43 for this week :j I'm rich!

I also found by saving for things I really want means I don't go crazy on the carp I don't really need - do I need that mag or can I get the recycled one from my girlfiends? Do I really want that dress or will a new belt or scarf revive the one in my wardrobe?

also find ways to stop wasting groceries - that has been a big help to me, go over to the old style board and spend some time there. For example I learnt you can freeze most veg before it becomes too elderly and then use another time - I have just made a banana cake from bananas that I froze a month or so ago, means the money I spent on the bananas wasn't wasted and I don't need to buy any cake this week

iIts a process & you get better at it over time, that's what I've found at least

littlemissmoneypenny

I've enjoyed reading this thread and have picked up a few tips to try next month. I'm going to try the spending diary and the separate purses. Thanks everyone!

boo80

January20 wrote: »

£600 for a tumble dryer? :eek::eek::eek: Is it just me? As you can get them for as little as £150! (perhpa I've just gone too MSE lol!) Was it a special one? Is that the problem: that you buy top of the range and disregard cheaper items? Do you do a lot of research before making a big purchase? That might be a starting point.

Lol, not at all. As I said it's the most expensive thing I've ever bought (apart from the house!) but (at the time) was the cheapest 'A' rated one, and we had to have one as we no longer had the room for washing to dry and extra washing too from baby and he wears cloth nappies.

Thank you for all the advice. Dave, thank you so much for sharing all that, it sounds like a really 'do able' way to live too.

I've tried to do the Grocery Challege loads of times, but have always given up mid month. Really trying to stick to my budget this month in the supermarkets! I even meal plan! £200 pm is plenty for a family of 4 isn't it? My OH and DD take packed lunches, and everything we eat is homecooked, not ready meals.

Thanks again for all the advice! Boo.x

boo80

I've done it again - just been to Tescos and spent nearly £100!! I don't know why/how I keep doing it! ARGH! Had to get toothpaste/brushes, and a £5 gift as my daughter has been invited to a party next week. I don't buy any junk food, but I do bake. I didn't even get very much fruit & veg and only sausages in the way of meat. ARGH!