Where to start for a lazy budgeter?

mfmaybe

Hi everyone

I joined a while ago but haven't truly embraced the MSE spirit . Quick bit of background - OH and I are both in good jobs and in a relatively stable position with them. We aren't in massive debt particularly, though everything is relative. We have a big mortgage which we can pay comfortably. I also have a car loan currently sitting at about £8k, and an overdraft of about £1500. I have about one month's salary in my savings, plus we have £4k in our joint savings.

My main problem is not that we can't afford any of these things, but that we just waste money everywhere . In lots of ways we aren't lavish, we don't go on loads of holidays or travel business class or expensive meals out; don't buy lots of clothes. But we like to buy our toiletries from Molton Brown, buy the organic meats and the nice wine, don't plan our meals well at all. We bought the big expensive washing machine when ours broke; drink loads of coffees, I buy my lunch from our staff canteen every day, etc etc.

So the question is, when the sums are bigger, where is the best place to start? We are both financially astute (ie accountants ) so know all the theory, about paying off most expensive debt first, etc etc. We are just very undisciplined.

What tricks do you use to scare yourself into managing your money better? Which are the easiest every day things to change? We aren't prepared to buy the cheap low-welfare cuts of meat, but are completely happy to cut our consumption so it's a treat rather than the norm. I always try to freeze carcasses to make stock etc, so we aren't completely wasteful. I have tried to grow my own but like the budgeting, I start with good intentions but forget/get distracted and the slugs get it.

In other words, my question is around behaviours - how do/did you change yours, and where do you start? For example, when I take out cash, I have no idea where it goes! I tried using an iphone app, but I keep forgetting. Then my attitude is "well it's ok, I'm not exactly broke" . But we SHOULD be saving quite a bit every month, and we aren't. We'd like to start a family soon and I'd like to have some money set aside so I could take the full year off work, but right now that wouldn't be possible.

Sorry for the vague post, but any help/kick in the rear much appreciated

Tixy

Hi

I think everyone has areas they are happy to compromise on and areas that they won't.

I'm a bit like you I think, I do buy expensive cosmetics and I only buy organic dairy products, but I also don't buy things like ready meals or branded cleaning products. So if its organic meat for you thats importantthen look for other savings instead.
Maybe part of your problem given that you are probably fairly high paid is that if you look at switching one item to a cheaper item it doesn't seem like the saving is worthwhile? And of course 1 item on its own isn't, but lots of items over lots of months does become worthwhile.

First have you checked things like your gas & elec suppliers? reasonably big savings to be had there and apart from the initial switch no ongoing effort required (well except to check again after say 9months or so). And what about your internet/phone/tv packages? are you paying for these all seperately when you could get an all in deal for half the price?

When it comes to the grocery shop it probably is going to take some more effort ongoing but I would say just start by seeing what you can downshift easily - eg if you buy a bottle of bleach then supermarket value really is just the same as the branded item. Things like toilet rolls - maybe you buy the cute puppy ones out of habit but the better quality supermarket ones are pretty much the same?

Personally I almost never use cash as I just find it slips away from me with little to show for it, I tend to stick to using my debit card for everything. Have you actually tried to sit down and work out an actual income & expenditure for a typical month? all split by category etc? possibly using something like the statementofaffairs calculator?

If you see that written down then it might make you think about what areas you can reduce and how much you need to cut off your spending so you can save the amount you'd like to each month? Eg you might decide its worth taking your lunch to work a few times a week if you can save £50 a month (besides which at least if you take your own food you'll know its good quality stuff!)

Do you tend to buy everything in the supermarkets? Have you tried sourcing organic meat etc from other places? some delivered boxes work out quite cheap now and try online sites for buying meat etc (also have the benefit of being delivered straight to you - ideal for the lazy person!). If you are in a semi-rural location are there farm shops selling fruit & veg or local farms selling organic/free range eggs etc?

Its not easy to change your habits but it can start to be addictive once you do start. That little buzz when you know you have paid half what someone else has paid for exactly the same thing is a rather nice feeling!

Good luck.

mrsb83_2

Me and my DH have professional jobs and a relatively good income too. That's how we conned ourselves into thinking we could repay back all our borrowing.

For me, it's much easier to get motivated by seeing by credit balances going down than actual moneysaving if that makes sense. Bargain hunting isn't that exciting to me, but using the saved money to pay down debt is.

We have a budget which me must stick to, but it's generous for food and alcohol because those are the things important to us. Don't feel bad about spending money on things you enjoy - it's all about balance for me.

Try analysing what you spend now using a spending diary/bank statements. Then set a realistic budget for next month. Agree with your OH to stick to it no matter what. If it's easy, cut more for the month after. If it was hard, look at the areas you over/underspent on and change it for the following month.

Million_Percent

If motivation is lacking then you need to set targets. A vague notion of wanting to save money will not work. You need to set limits and budgets on spending and set targets for the amount you want to save. You're both accountants so set up detailed spreadsheets and work with them. Treat your household budget like you do your employer's accounts.

The one thing that strikes me is that you have 4K in joint savings and a months salary in your own savings. Combining those together I'm guessing that is 6-7K so you are probably not far off being able to pay off the car loan in full. With interest rates as they are, I wouldn't keep much in savings while you have debt which is costing you money. What is the interest rate on the loan? I know many people like to have savings as an emergency fund but you say both your jobs are secure and once the loan was paid off I'm sure you could rebuild the savings quickly enough.

mfmaybe

Hi Tixy

Thanks for your reply. Yes that's exactly it, saving 20p on a tin of beans doesn't feel like it will make that much difference on a £1700 mortgage payment! And again there are certain things we won't compromise on, but a good idea to look at some of the branded stuff. I am a bit guilty about the puppy toilet roll but actually recently I've started buying the recycled own-brand stuff. Not sure if that's cheaper, but my conscience is clearer! I can certainly give that some thought though. Haven't looked at meat/veg boxes but can certainly do so. We actually bought duck eggs from our neighbour on Monday - £1.30 for 6 completely free range seemed a good deal! But then we ate them with asparagus (it's in season ) and smoked salmon, so hardly frugal after all

Our gas is a bulk tank as we live in the country, so hugely expensive and not really easy to switch. But again we could look at it as it's a massive expensive for us. I did check our electric but we were on the best tarrif.

I actually have a completely fully comprehensive categorised budget. I'm an accountant, so it's spreadsheet heaven! I then download all my transactions from online banking, categorise them, put them in a pivot table, then record them against the monthly budget. Doesn't help though - we still fritter money away :eek:

Mrsb83 I think the problem is we don't have a budget as we don't feel we "need" to. Ironically I was once in massive debt (£25k+ on credit cards) and I learned I'm one of those people who is much better at managing money if I feel skint all the time. As soon as I feel I might have £50 left at the end of the month, I spend £200...:o. I sit down on payday, update my spreadsheet with current balance, all outgoings in the month, work out my projected balance by next pay-day....and despite that telling me I'll still be overdrawn, I reward my hardwork with a latte and a brownie. Oh dear.

What type of spending diary do you use?

mfmaybe

Millionpercent, thanks you are right it's definitely motivation that's lacking. Targets are definitely needed

The carloan is mine alone (OH also has one) so I can't use our joint savings to pay that. It's a staff rate loan so not desperately expensive (6.7% I think), although that is next on my hitlist to pay off after the overdraft. The problem is that, per my post above, I know full well I wouldn't put the montly payment equivalent into my savings if I didn't have the debt to pay . This is where the lack of discipline comes in- I've never missed a debt payment in 15 years, but I certainly can't say I've shown my savings account the same respect.

dancingfairy

A couple of things that might work for you:
1) a spending diary - putting things down in black and white will scare you - or it should do and it'll make you want to not buy it 'cos you'll have to write it down.
2) try Martin's demotivator - it'll show you what a coffee a day adds up to(or whatever your vices are) - and it's a frightening amount. :eek: - search for it -I'm sure you'll find it one here somewhere.
3) How about deciding what you want - ie a bigger house, nice holiday, kids etc and sticking a picture of whatever it is you want inside your wallet - then when your tempted you'll look at a picture of the bigger house, luxury holiday, kids etc and know why you're doing it - obviously you'll have to use a picture of generic kids of family friends though
4) Another thing that some people find useful is to draw out a set amount of cash for say 'generic spending' and once it's gone it's gone sort of approach - have as many envelopes as you need - 1 for supermarket, 1 for pub etc. You can also store the receipts in there are you buy stuff so when you've run out you can see what it was spent on.
5) set up a standing order to a saving account each month - you'll soon not notice it's going out and you'll adjust your spending to what's left in your account. After a while you can then gradually up the standing order etc. Time it to go out after payday or soon after before you spend it on other things.

Best of Luck
df

Niv

From what I read from you I feel your not struggling to make repayments but simply having little money at the end of the month? Anyway I have a few ideas based on what you have said about having lack of focus etc

'Secretly' save from yourself. What I mean by this is put a little away automatically (i.e DD on pay day) into a savings account, preferably with a seperate bank to your current account so that you dont see it when you do online banking. I do this and now I see it as a bill and dont even think of it as savings!

As for not knowing where cash goes once you take it out the bank - snap, I have that problem too. What I have started doing is take less out of the hole in the wall in teh first place. This way you either use your card (so you can see where it goes at least) or visit the machine more often and kind of forces you to question where it has gone. I dont mean only take a tenner out but if you regularly take say £50 in one hit, take £40, if it lasts as long then bingo, £10 saved :-)

Budgeting food can be boring if you are not obliged to do it so maybe try simply planning meals a little more. This way you will have the meals in so will be less obliged to say get take out and also as you have planned your meals a little you probably will have less 'random' food that doesnt really go with what you have (if you see what I mean?).

Rather than going all out to 'grow your own' just maybe try a couple of herbs you grow on the windowsill. Hard to forget as you leave them in the kitchen, you get fresh herbs to add to your meals and save a little money too. If you end up getting into that you could expand into say tomatos next year in a couple of grow bags by the back door etc. You see where I am going with this, start small and build up slowly.

Just a few tips I have tried, hope it helps.

Niv

dancingfairy

Another thing that might work is to try some sort of NLP approach. Imagine yourself knowing your spending is not neccessary - that chocolate muffin for example and know it will take you into your overdraft limit, then think about how sick you felt when trying to pay back that debt before, how hard it was, how much you sacrificed, how you are stealing from your future self etc. The more you train your brain to think this way it will then become automatic.
You can also use something similar to achieve savings - really imagine the cash building up in the bank account, walking in to the estate agents to book the holiday knowing all the cash is sat there, the sunny holiday, sitting on the beach etc.
df

mfmaybe

So many good ideas! I like the secret savings account, which has in fact reminded me I have over £6k in my sharesave account . You are right that I can see all my accounts online (I work for the bank they are with) so one with another bank is a great idea. I do tend to steal from my savings too often.

Also really like the idea of the cash envelopes and putting the receipts in them.

DF I am having a little laugh at the idea of a picture of someone else's kids in my wallet . But I do have a gorgeous nephew so perhaps his photo can go in there! And maybe the Aga I also covet (though realise that does not exactly embrace the MSE spirit).

Thanks again, I will have a proper read through when I have more time.

dancingfairy

Bit random but with the gas tank can you maybe club together with your neighbours /fellow village people and form a co-operative - you can then shop around and see if a supplier will supply you more cheaply as you will want to purchase - x amount from them a month - bulk buying discount. I believe some village has done it will oil so it will work -and no doubt you will have fun with a spreadsheet so everyone can see how much they've saved and comparing suppliers and bargaining with them
df