Basic Budgeting & Life Advice

Sea_Shell

Do you know yet whether your spending has mainly been on "things", "experiences" or "consumables"?     Have you anything to show for your spending, anything that you don't really need and could sell?

What was the loan for, a car?    Or was it consolidation of debts?

How is your health and fitness generally?    Is it being impacted by the type of stuff you're buying?

What type of "indulgencies" are they?

Why do you think you spend what you spend?    Boredom, wanting to impress, looking good, treating yourself, etc.

You need to investigate and identify the causes first....which is usually the hardest bit.     

If you really want to save, can you do without most of the things you've been spending on?

 

nyermen

One comment - "You Need a Budget" isn't for everyone, and its not deemed cheap (unless you have their special early rate), however their lessons and tutorials are I believe free.
So even then - if the concept of "envelope budgetting" is of interest, I'd take a look at their lessons (just google 'you need a budget').  Enveloping is where you assign your salary immediately into virtual envelopes, so that the bigger non-monthly bills are allocated monthly.

I mention this because it worked for me because rather than looking at my bank balance and going "ooooh", I looked at it and knew that most of it was already pre-allocated for a forthcoming bill.

One more thing that worked for me - work out your take home pay "hourly rate" (that is, for the hours you work, how much you get into your account after tax etc).  Then when you want to buy something, calculate the "hours worked for it", it can be sobering to realise that luxury X costs you Y days of work.  Even more sobering if you work out the rate after essential bills (ie. your "profit per hour").

MovingForwards

I was living hand to mouth with my ex and had over £20k debt when I started over, with the aim of becoming debt free and saving to buy a home. I moved into a flat share and had enough money to pay 2 months rent and bills, but got offered a job the next day.

Straight away I set up a spreadsheet for outgoings and one for savings. I also worked out how much I wanted to save each month and opened up an account with a different bank for my savings.
I worked out how much I would allow myself for food, random spends, a takeaway etc each month then divided that by Fridays in the month. That was my weekly allowance and I drew it out in cash, if I had some leftover I would take out less next time.
I also did the 1p a day and 52 week savings challenges, plus would round my account when bills came out, moving everything 99p and under to savings. Always updating my spreadsheets.

Every Christmas holiday I would open a fixed rate account and lock money away for a year or two, leaving a small float to start the new year savings.

In one of my jobs I could easily afford to have a branded coffee each Friday, but then I started to work out how much that cost me each year and how long I would have to work just to earn it. So I dropped it down to payday week Friday only, but even that adds up and I stopped.

I became debt free and had more money to save.

Took 3.5 years of saving and debt clearing, but I moved into my own home last year. First thing I did was update my spreadsheets, work out my new outgoings and get saving again. I also run a little car and don't earn as much as you do.

Teapot55

You might also want to consider paying into a pension. If you’re already in your employer’s pension scheme think about increasing your contributions?

Eco_Miser

As with a takeaway, you don't need to visit their building, you can open a savings account online. https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Rates generally are poor, but you might as well open the best available.

Also consider Regular Savings accounts https://forums.moneysavingexpert.com/discussion/6106986/regular-savings-accounts-the-best-currently-available-list/p1

as they have better interest, and help you consider saving as a committed monthly outgoing.

TurnItAround

Sea_Shell said:

Do you know yet whether your spending has mainly been on "things", "experiences" or "consumables"?     Have you anything to show for your spending, anything that you don't really need and could sell?

What was the loan for, a car?    Or was it consolidation of debts?

How is your health and fitness generally?    Is it being impacted by the type of stuff you're buying?

What type of "indulgencies" are they?

Why do you think you spend what you spend?    Boredom, wanting to impress, looking good, treating yourself, etc.

You need to investigate and identify the causes first....which is usually the hardest bit.     

If you really want to save, can you do without most of the things you've been spending on?

 

Yes I have a pretty good idea, I'm not a consumer type person like I literally wear same clothes etc until I NEED something new. I basically spent all my money on self destructive habits for whatever reason things like drinking, smoking pot, cigarettes, going out to party...basically all those things I've given up now but I still spend a lot when I'm at work. I'll buy coffees, ordering food nearly everyday. This is whats killing me now . 

The debt was when I was with my ex girlfriend I took a £10 grand loan because we had no money and were living a very bad lifestyle, drinking all the time etc. I just did stuff against my better judgement. I have £6k left of that loan now and it costs me £150 a month. My biggest problems now are food, I spend too much on food because I get lazy to cook sometimes and it costs me a whole week of ordering food because if I don't cook on weekend there's little to no chance I'll do it on weekday as I work. MovingForwards said:

I was living hand to mouth with my ex and had over £20k debt when I started over, with the aim of becoming debt free and saving to buy a home. I moved into a flat share and had enough money to pay 2 months rent and bills, but got offered a job the next day.

Straight away I set up a spreadsheet for outgoings and one for savings. I also worked out how much I wanted to save each month and opened up an account with a different bank for my savings.
I worked out how much I would allow myself for food, random spends, a takeaway etc each month then divided that by Fridays in the month. That was my weekly allowance and I drew it out in cash, if I had some leftover I would take out less next time.
I also did the 1p a day and 52 week savings challenges, plus would round my account when bills came out, moving everything 99p and under to savings. Always updating my spreadsheets.

Every Christmas holiday I would open a fixed rate account and lock money away for a year or two, leaving a small float to start the new year savings.

In one of my jobs I could easily afford to have a branded coffee each Friday, but then I started to work out how much that cost me each year and how long I would have to work just to earn it. So I dropped it down to payday week Friday only, but even that adds up and I stopped.

I became debt free and had more money to save.

Took 3.5 years of saving and debt clearing, but I moved into my own home last year. First thing I did was update my spreadsheets, work out my new outgoings and get saving again. I also run a little car and don't earn as much as you do.

Interesting story, how old were you when you bought your own place? I'm also having this issue atm I am living with my dad, my sister and her family and me so I have basically no privacy, can't have a relationship and it feels "shameful" to be living at home at this age knowing I need to pull my finger out. Is it possible to rent + save up for a mortgage? 

Mnoee

If you have the freezer space, batch cooking takes a lot of hassle out of cooking. It's not 4x as much effort to make 4x as much chilli (or bolognese, stew, curry - anything saucy tends to work well!) and portion it up. Then you can just defrost what you fancy in the morning and bung it in the microwave in the evening. Even if you need to buy a freezer to stick in the garage and a bunch of tupperware, you'll still end up saving a load over a year. Packing a lunch is always a great money saver - but even something like a pot noodle type thing and a bag of crisps is half the price of a meal deal, you don't have to be fundamentalist and make loads of dramatic changes you can't stick to. 

For takeaway coffee habits, we did the maths and bought a bean to cup machine and a few travel mugs. Despite the initial outlay, it's saved us hundreds over a few years. Sometimes you have to spend to save, and it's still important to have things in life you enjoy, or you'll start to wonder why you bother going to work at all. 

pat1976

I notice that you say 'should' a lot eg you should have saved more, you should have plenty spare, etc.

It's a good wage, if you're not paying much in rent you probably should have plenty of surplus, but it sounds like you don't actually know how much. 

As a minimum write out how much your fixed costs are:
Rent 
Electric/gas/water if applicable 
Commuting costs
Insurance
Phone
Broasband
Car costs

Then write out other necessary items and what you believe you SHOULD spend on them
Food
Clothes 
Hair cuts
Etc

Take this from your wage and there's the surplus, it's it as much as you thought? 

One step further would be to go back through the list above and write what you actually spent on those and the rest:
Cigs/alcohol 
Holidays 
Nights out 
Etc

If you were to budget like a pro you'd have a spending limit for each category, and would track your spends on a daily basis. It's hard work, but makes you think even if you just do it for a couple of weeks. 

You could use an app such as money dashboard which can read your bank statements and categorise them for you, or lots of banks have apps like that already. But it's no good if you don't look at it and act on it. 

The other way is to decide what you should should spend and transfer everything else to savings when you get paid ash's when you run out of money that's it for the month! 

It's great you're thinking about this, you're in a good position. Get that loan paid off ASAP, it's costing you money. 

TurnItAround

Mnoee said:

If you have the freezer space, batch cooking takes a lot of hassle out of cooking. It's not 4x as much effort to make 4x as much chilli (or bolognese, stew, curry - anything saucy tends to work well!) and portion it up. Then you can just defrost what you fancy in the morning and bung it in the microwave in the evening. Even if you need to buy a freezer to stick in the garage and a bunch of tupperware, you'll still end up saving a load over a year. Packing a lunch is always a great money saver - but even something like a pot noodle type thing and a bag of crisps is half the price of a meal deal, you don't have to be fundamentalist and make loads of dramatic changes you can't stick to. 

For takeaway coffee habits, we did the maths and bought a bean to cup machine and a few travel mugs. Despite the initial outlay, it's saved us hundreds over a few years. Sometimes you have to spend to save, and it's still important to have things in life you enjoy, or you'll start to wonder why you bother going to work at all. 

Yeah I make batch food if I do cook, it's just some weekends I don't for whatever reason. I've done it this week so I should be okay, just need to continue it. Like I know a lot of the stuff I need to do, but I guess being too comfortable and complacent not taking my life seriously. pat1976 said:

I notice that you say 'should' a lot eg you should have saved more, you should have plenty spare, etc.

It's a good wage, if you're not paying much in rent you probably should have plenty of surplus, but it sounds like you don't actually know how much. 

As a minimum write out how much your fixed costs are:
Rent 
Electric/gas/water if applicable 
Commuting costs
Insurance
Phone
Broasband
Car costs

Then write out other necessary items and what you believe you SHOULD spend on them
Food
Clothes 
Hair cuts
Etc

Take this from your wage and there's the surplus, it's it as much as you thought? 

One step further would be to go back through the list above and write what you actually spent on those and the rest:
Cigs/alcohol 
Holidays 
Nights out 
Etc

If you were to budget like a pro you'd have a spending limit for each category, and would track your spends on a daily basis. It's hard work, but makes you think even if you just do it for a couple of weeks. 

You could use an app such as money dashboard which can read your bank statements and categorise them for you, or lots of banks have apps like that already. But it's no good if you don't look at it and act on it. 

The other way is to decide what you should should spend and transfer everything else to savings when you get paid ash's when you run out of money that's it for the month! 

It's great you're thinking about this, you're in a good position. Get that loan paid off ASAP, it's costing you money. 

Yes I say I should a lot because I reflect on my life and realise I've thrown away so much when I could be in a great position I have no kids/wife no real big bills etc so in essence I should have tens of thousands in my account but I blew it all on bs indulgences and short term fun. 

Anyhow how do you do your stuff? I dont want to dive right into using apps etc. Whats the most basic bare bones way of budgeting? Paper? Spreadsheet? 

Sea_Shell

Personally, I use Excel.

This can be as simple or complicated as you want (or have time for).

Mine is very detailed, but then I have time and enjoy doing it, so it's not a chore.

You have to find a system that works for you.   However though, any system at the end of the day, relies on you saying "no" to excess spending!!