I’ve never been very good with money. As soon as I started earning it, I took total pleasure in spending it. A habit of ‘treating myself’ developed when I was at uni – I lived at home in my first year and convinced myself that because I wasn’t going out drinking every night like my friends, I could spend my student loan at Topshop instead. This kind of thinking has followed me ever since – if I have a bad day, I cheer myself up with new shoes. If I win a pitch, I reward myself with an expensive perfume. Sometimes I wonder if the Parks and Rec ‘treat yo’self’ skit is based on my life… except once a year is more like once (or twice, or three times) a week. Really though, who doesn’t love mimosas and fine leather goods?
Treating yo’self is all well and good when you have the disposable income to do it, but when you don’t – or rather, you do but should probably spend that disposable income on something more substantial, like a house – it becomes irresponsible. Treating yo’self is also more difficult when you’re self employed, especially when you run a limited company. I actually think the horror of having another person (like an accountant) look at your bank statements is enough to scare any serious over-spender into the black.
One of my goals for 2015 was to get my finances in order, and I think – a mere 8 months into the year – I might have achieved it. My name is Jen, and I’ve finally learnt how to budget.
Now I’ve got a handle on my money, I feel kind of ashamed that it took me till now to figure it out. I’m about 5 months away from turning 30 and I’ve only just got to grips with something many people find totally natural – not spending money. What makes the situation more frustrating is that I’m not irresponsible by any means – I’ve never missed a single bill payment, I always cover my essentials and I don’t have loads of debt. I’m always so close to being great with money, and then I’ll take my £300 surplus and spend it in Zara. Not great adulting, Jen.
For the past few months I’ve been trying some new techniques that have really helped me keep track of my cashflow, my outgoings and what’s left over each month. By being reasonably strict with myself, I’m managed to save more in the last three months than I ever have in my life, and it’s a pretty rewarding feeling. Maybe even more than that expensive perfume!
So here are my top 5 tips for successful budgeting, for those who find themselves browsing ASOS when they really shouldn’t be…
- Calculate your outgoings and work out your monthly ‘essentials’ total. Include your rent/mortgage, all bills and any necessary costs. Rob and I have a joint account for all our shared bills and food, so I have a standing order from my own account that covers everything. This makes things really easy as it’s just one lump sum rather than dribs and drabs throughout the month – it’s worth looking into a separate account for bills for this reason.
- Allocate a weekly budget based on your disposable income. Once you’ve paid your outgoings, work out how much is left over and divide it over each week of the month. Remember that you don’t have to spend all your disposable income – I try to stick to a much lower weekly budget so I still have money left over for the holy grail of good budgeting – savings.
- Draw out cash at the beginning of each week and use this rather than your card. Without a doubt, this is the thing that’s really helped me get to grips with how much I spend. When you can actually see your money, you’re far more aware of its value.
- Organise your shit. This is specifically for anyone who splurges on clothes/shoes/accessories/homewares/etc – clearing and organising what you already have is a great way to shame yourself into being more thrifty, and you’ll rediscover things you’d forgotten you had. When I sorted my wardrobe out a few months ago I felt truly disgusted with how much I had and I genuinely haven’t bought much else since.
- Be honest about your situation. For a long time I brushed off my overspending as ‘enjoying life’ and I fully subscribed to the ‘you can’t take it with you!’ approach to money. But seeing people much younger than me buying houses made me realise that I needed to grow up. I get mad at myself when I realise how much I could’ve saved over the years, but at least I got there in the end.
Budgeting is not something that comes naturally to me, and I strongly believe it’s something we should be taught at school. It’s taken me almost 30 years to realise that I really don’t need another copper plate from H&M Home, but I’m pretty pleased it’s finally clicked and hopefully I’ll reach my ultimate saving goal (that elusive house deposit) soon.
Do you have any budgeting tips? Share in the comments!