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Yesterday I blogged about whether New Year’s resolutions were worth making.
For me, it’s a big fat ‘YES’! While we need to be careful not to beat ourselves up when we don’t meet our own high standards, the start of a new year is a great time to acknowledge how our lives are changing, and what we can do to make things work better.
According to this survey, ‘saving more and spending less’ money is the fourth most popular resolution for 2019. Perhaps it’s the bank account haemorrhage in December which gets people resolved to get their finances under control – or maybe the new year brings fresh hope of finally laying down that house deposit, buying a much-needed car, or taking the kids abroad.
If this is you, then SNAP! As a family of six on one salary, managing a budget is something we do day-in, day-out. I won’t suggest we’ve got the perfect solution – there’s always room for improvement, right? – but here are a few tips I’ve picked up over the years.
1. Set a discipline of a weekly budget
Even if you don’t need to – even if you have a large amount of disposable income – I still think setting a weekly budget is a really important discipline. It makes you aware of how much you’re spending on food, travel, clothes, leisure, etc, which is useful however much money you have.
It also means you can build up your savings with the money you’re not spending, or choose to give away more to charities or organisations which need the money more than you! And, if your circumstances were ever to change suddenly – e.g. through unemployment or illness – it would be much easier to get by.
2. Do some maths
I’m sorry. I really am. But if you want to get your money under control, there will be some maths involved. You can’t just guess at what sounds like a reasonable weekly budget. You need to work it out.
The good news is that it only takes an hour or two. Set aside an evening – with your other half if you have one – to go through your finances, working out what you spend each month on bills and charitable giving, and what’s left over. Divide into four, then reduce by a little – remembering that a month is slightly more than four weeks! (If you want to be really accurate, divide by 31 and multiply by 7!)
This is your absolute maximum weekly budget – but if you think you could live off less, then why not try for a few weeks? If you can squeeze even £10 off your weekly budget, that could be an extra £520 in your savings by the end of the year.
3. Use cash rather than cards as much as possible
The number 1 classic money-saving tip that you’ll find pretty much everywhere is USE CASH. When we shop on our cards, we’re statistically likely to spend more – and, of course, it’s much easier to lose track of where we’re up to.
Once you’ve set your weekly budget, withdraw this amount each week. You’ll find it far easier to budget, as you can physically see what you’ve spent and what you have left.
4. If you can’t use cash, keep a written tally of what you’re spending
I’ll be honest: I find the cash tip near impossible, because the first (and largest) amount which comes out of our weekly budget is the grocery shop – which I do online, and therefore with a card. I do a fair amount of other shopping online too, so by the time I’ve done that, then it’s hardly worth withdrawing cash.
My solution is that I have our weekly budget as a Monday morning ‘event’ on my Google calendar. (You can do this on a written calendar too – it’ll just get more messy!) Every time we spend money, I simply deduct the amount from the total – no faffing about with what I’ve bought, or a break-down of the amount spent – simply the amount. I can then see easily how much we have left for the rest of the week, and budget accordingly.
5. Wait for non-urgent items
Delayed gratification is a rare art these days. We’ve become so used to buying stuff when we want it – and yet our ancestors would likely never have had the money for the kind of luxuries we’ve grown used to!
Yes, you need to buy food for the week. Yes, if you’re driving and the fuel tank is low you’ll need to re-stock it. But if you ‘need’ a new coat, do you really need it this week, or can you last in your old one for a few more weeks?
When money is getting tight in the Desertmum household, I buy only the essentials. Any non-essential item I think of purchasing goes on a list instead. By the end of the week, if there’s any money left then I choose one of these items to buy. This process really makes me think about what I actually ‘need’.
6. Try to plan ahead
What’s happening this week? This month? Where will you need to spend money? A train fare? Lunch with a friend? A birthday present?
As much as possible, try to get these events accounted for ahead of schedule. You could do this by jotting them down at the start of each week or month, whatever works for you, or withdrawing cash specifically to spend on these items, and sealing them in labelled envelopes. This way, they don’t come as a surprise at the end of a week where money has mysteriously disappeared on other ‘needs’.
7. Use the sales wisely.
We all know when shops will be having their sales: after Christmas, end of spring/start of summer, and end of summer/start of Autumn. Basically whenever the seasons change, shops are desperate to get rid of old stock. So we can plan to use these times wisely. But we can also take advantage of spontaneous sales too – you know when you’re passing a shop and they just happen to be advertising 70% off?
Rather than walk in and buy whatever you fancy, use these discounted times to buy the things you know your family is going to need in the future.
For example, you know that your child will need x amount of T-shirts, jumpers, trousers, pants, socks and so on next year. Why wait till they need these items, when they’re on sale now?
Call me a Sales Geek, but I keep a notebook with a tally chart of what I’ve bought each of my children in the next size up so that when the sales hit – expected, or spontaneous – I know what each of them needs. It saves us a lot of money – but it also saves time, as I know what I’m looking for on the sales racks or websites.
8. Lose the habit of browsing – the high street, or online
The more we trawl through the high street, the more we’re likely to buy. Perhaps only £5 here and £10 there, but it adds up – and is likely to be stuff we don’t need.
But this happens when we spend time online browsing shopping websites as well.
To curb spending, we need to ask ourselves whether we’re particularly prone to either or both of these practices. In order to lose them, we’ll probably need to find a replacement hobby. If you work in town, and find yourself spending unnecessary amounts of money during your lunch break, could you take a book to read instead? Or plan a podcast to listen to?
If you spend your evenings on Amazon or Ebay, can you take up or resurrect a hobby instead? Cook, bake, play an instrument, do some craft, watch TV, play a game. Can you switch your phone off, or put it in a different room?
9. Plan your meals and buy only what you need
I wrote about this recently here. We save so much on our food bill because we plan our meals! While we’re no angels when it comes to food waste, we definitely chuck out far less because we only buy what is going in our meals. And we save ourselves loads of those annoying ‘top-up trips’ which can become pricey, because we’ve already bought exactly what we need.
Meal-planning doesn’t have to be daunting – but it’s a big saver if you’re serious about better budgeting. Why not check out the Healthy Meal Planning Bundle, which I’ve contributed to? It contains over 1000 family-friendly recipes, plus over 30 meal-plans, meal-planning guides and printables, and healthy eating resources.
I’ve been meal-planning for years, yet I’ve picked up loads of tips from this bundle to shave even more off our food bill.
It will set you back $49.97 (around £37) – but will save you at least this amount in lower food bills. AND if you email me your receipt, I’ll send you two of my own freebies: Top Tips for Fussy Eaters and a Bundle Cheat Sheet.
10. Divide your savings
Recently, I realised that while we were dutifully putting aside some funds each month, we were also withdrawing them to pay for ‘extras’ that our weekly budget didn’t cover – gymnastics lessons, car tax, MOT, etc. So we weren’t actually building up much in the way of savings at all.
A tip I picked up from an ebook I got as part of the Ultimate Homemaking Bundle a few months ago was to divide your savings up into an ‘Emergency Fund’ and ‘Long-Term Savings’. You can use ISAs for these, or savings accounts – it doesn’t really matter, as long as you can access your Emergency Fund.
These days, instead of putting one monthly amount into our savings, we’ve now divided that into two. We put half into our Emergency Fund, and half into Long-Term Savings. The idea is that we build up the EF for one-off things which our weekly budget can’t always cover, but that the LTS are not being touched, and can grow into something a little more substantial.
What budgeting tips can you add to the above? Is budget a resolution for you this year? Or has it been in past years? Let’s chat in the comments!