Budgeting Help - Ending Living Paycheck to Paycheck

luckofthe_irish

Hi all,

Apologies if I am posting this in the wrong thread, but I really need some advice regarding budgeting and managing my money as I end every single month overdrawn despite starting every month with the aim to spend less and save more.

I currently have my main current account with First Direct and use this for everything - salary, bills, spending money etc.

I also have a savings account (which doesn't have anything in it!) and a separate savings account and a Help to Buy ISA where I am saving for a deposit on a house (can't put all my savings for a deposit in H2B at once so they are in a TSB Classic Plus account to earn some interest). I am in the very early stages of saving so I don't have a huge amount.

My issue is budgeting really and I am looking for tips on how people manage their money. I seem to be OK for the first 10 days of the month and then spiral into despair at the lack of available funds.

Taking this month for an example... I got paid today but started £100 overdrawn. Money automatically gets transferred to my savings account (which I end up having to raid every month) but that is all I have. My rent will not come out until the 1st but I don't want to take the money out of my current account in case I forget to put it back in one month and I am left in trouble... My biggest spends in the month are rent, car payment and food shopping (I am single but absolutely love food and keeping healthy, so I spent a lot on ingredients). I am not a massive clothes shopper or party girl so I always wonder where my money has gone every month... seemingly into nothingness even though I do keep an eye on my accounts.

Do people have different bank accounts for different things or do you just withdraw money/spend on debit card?

Would love any ideas to get me out of this rut.

Thank you!

DawnW

The most important thing is to find out where your money goes. Why not keep a spending diary for a few weeks - simply record everything you spend, even small things such as coffees or magazines (they mount up!)

There is also a statement of affairs template somewhere on here (sorry I cannot remember the link ) which might also be instructive as to where your money goes. Often post these for comment by others, but I am sure it is useful just as a tool for your own reference. I am sure someone will come along with the link shortly.

luckofthe_irish

Do you recommend I get a journal and write everything down that i spend each day? That is daunting as I am pretty scared to find out! But that is deffo a step in the right direction so I will try to start on Monday for a couple of weeks and see where I get.

I make lunches from home everyday and drink the free coffee at work so I am usually OK during the day, but online spending and after work spending are obviously out of control!

DawnW

If you are scared to find out, then that is a sign that there might be a problem. I would use any old notebook or diary that you have rather than buying a specific journal. Then you won't need to make buying this the first entry in your spending diary!

luckofthe_irish

Oh my... look how quickly I was just thinking about buying a new journal! Thank you!

Sometimes I feel like I just need someone to manage my money and give me what I am allowed to spend... it is ridiculous. I need to master this!

ProcrastinatingPenny

Do people have different bank accounts for different things or do you just withdraw money/spend on debit card?

I have several accounts and split the money on payday by standing order, it works for me. I have an account for bills where all my direct debits go from ( I don't carry a card or even know the pin for this account!) an account for food and petrol, an account for my personal spends and a savings account for my emergency fund and presents for the year. I started using YNAB and plan to again (it stopped working for me as my accounts are joint and my OH would spend and not log it) I am currently doing my SOA as things have slipped and it is proving to be really helpful to see where I can cut back.

excited_to_be_free

Post your SOA and then we will be able to advise where you can cut down. Sorry I don't have the link for it.

La_escocesa

luckofthe_irish wrote: »

Do people have different bank accounts for different things or do you just withdraw money/spend on debit card?

Hi there - welcome

I try to keep everything in as few places as I can - no panic money-shuffling to get money in x account before a direct debit comes out etc.

I used to try and withdraw 'spending money' (and not really account for where that went to) and then keep everything in the account for bills only, but I started using YNAB in December and it is by far the best thing I've found for budgeting. Everything can stay in the one account but you assign your money to different categories - the category balance tells you how much you really have! I think part of the issue is seeing a few hundred pounds in your a/c but not really realising where that has to go.

The other problem with withdrawing pocket money is that it doesn't really help if you spend online - would you go and put some of the cash you withdrew back in the account?

You need to pay for YNAB ($50 a year) so I'm sure people will tell you you can do it without it but I'm pretty sure I've saved well more than what it costs. There's an app to record spending too.

(Sorry - I'm a bit of an evangelist when it comes to YNAB changing my life! I've got £600 in my a/c and it's payday on Monday - that has never happened to me!!)

Like others have said - the SOA is the best place to start - even if you only do it for your own benefit and don't want to post it for everyone.

HTH

foxgloves

I also used to be hopeless at managing money, but since reforming & getting all our debt paid off, I now can't imagine trying to live without a budget.
The point I wanted to make is that you seem to equate liking healthy food with expense. This is a myth fed to us by the food industry & lazy popular jounalism. My partner & I both love to cook. We also like to eat healthily & I woyld describe us both as 'foodies' in terms of ingredients. But we can feed ourselves very well plus cat plus buy all our household/cleaning supplies, as well as basic toiletries for £200 a month. Needing to buy a big sack of cat biscuits every 2 or 3 months usually puts that up to around £220, but not always.
Many of the healthiest ingredients are very cheap. We can get 2 or 3 big 'bags 4 life' size bags of fruit & veg from our local market for £10 to £12. Even pricier things like avocadoes are 3 or 4 for £1 instead of up to £1.20 each in the supermarkets. Pulses are really cheap - esp. from the 'World Food' aisle in Sainsbury's. Aldi has a good range of dried fruit/ nuts healthy snacks. We like their unsalted pistachios. Half the price of other packs I've seen. Animal proteins & fish can be pricy. It's generally hugely false economy to buy packs containing a couple of chicken breasts. I would much rather buy a free range chicken & use all of it for a range of meals over the week. Frozen fish is no less healrhy than fresh, & could actually be fresher than that on the fish counter as it has to be fast frozen so quickly after it's been caught. Iceland currently sell 3 any 3 big bags of frozen fish fillets for £10. Quite a lot of choice. That"s a lot of healrhy meals for 1 person, esp. in comparison with buying a couple of small fresh fillets which can easily cost £6. Oily fish are incredibly healrhy - all those omega fats - but they are the cheapest to buy. Last time I bought some fresh sardines to grill to go on top of a salad, they cost around £1.20.
You know what your monthly.income is, so your food budget needs to be set at a sensible level within this. There's no need at all for a cut in food spending to compromise healthy eating. My partner made a lovely low fat quorn curry this week, which we ate atop a baked sweet potato with a large green salad - cheap, filling & healrhy.
But yes, learning to budget & learning to stick to that budget will change your life.
Good luck,
F x

grunnie

A journal didn't work for me but an envelope every month did. Any old envelope - an old birthday card one or an old bill. Write the month and year on the front and every time you spend write the amount on the front and put the receipt in the envelope. You are saving for a house deposit so every magazine pair of shoes etc etc even a coffee is a small spend not going towards your future home. If online spending is your weakness find a home you like that is up for sale. Print a little picture of it and stick it on the front of your computer or as a screensaver. I save for holidays and realised little spends soon mount up and I could have a holiday or trip to the theatre by missing out a few things like magazines. Good luck- the first month is the worst. Is there anything you can sell to start you off with savings.

Debtslayer

I think the first thing you need to do is write yourself a budget.
Fill in a SOA; just do it for yourself if you don't want to post it yourself. If you do decide to post it on here though people can provide some fantastic advice.
Be really honest when you fill it in. Sometimes what you think you can spend and what you actually spend can be poles apart.


Try to preoccupy your time you spend online doing something else. Do some cleaning; have a bath etc.


I think you need to tackle this now as you state you are in your overdraft at the end of last month. If you are looking to purchase a property in the future then you need to not be using overdraft.


Good Luck