A couple of people have messaged me saying that they can’t live on their income and don’t know what to do. I asked them if they tracked their spending but neither of them knew what I meant.
Every now and again I track my spending. I track every penny that goes out that month to see where my money is going. It takes effort but I carry a small notebook in my bag and write every thing I spend down. There are budget apps that you can use if you are more technically minded. I make sure that I transfer my notes to a big book each night which is like my balance sheet or ledger. I also add my direct debits. The big book has any income I have coming in added also. This might be my pension, things sold on FB market place, any freelance work etc. I then knock off my spending each day. I usually do it whilst I am waiting in the kitchen for the pasta to cook, or the kettle to boil or something. It only takes 5 or 10 minutes, and by doing it whilst I am waiting, it doesn’t feel like it is eating into my day, or is a chore I have to sit down and do.
It is important to write every penny, even the 40p sweets you bought the grandchild, or the £1 you gave the homeless guy.
At the end of the month I am able to see if my outgoings are more than my income and see what I am spending my money on. I can then assess whether I need to make cut backs, or earn more money.
I probably do this about 3 times a year, or if I seem to be spending more than I am earning. This helps me stay on track with my budget. I also look at my budget each month and tweak it as every month is different. Some months I have more outgoings than others because of holidays, birthdays etc. I do have savings for those as I put a bit by each month, but try not to use my savings unless I need to. Do you track your spending? When times are hard it is a good habit to get into.
I have on/off tracked my spendings nearly all my life – I may still have a tiny notebook from my childhood tracking my pocket money spendings! I have never found this a chore, but a great teacher. For six years during a marriage/ childbirths and severe work problems, I could not find the time and energy, which unfortunately was a catastophy. I left the marriage with a nearly unconquerable debt. I once again tracked expences on/off to be able to adjust my spendings intentionally and finally worked my way through it – after 20 years. I am now retired and happily track every penny spent, continue to adjust, prioritise and thoroughly enjoy my luxuries, secure in the knowledge that I am within my limits. My son has made a bespoke budget/tracking for me on my laptop, that has made it so easy.
I allways use my card, it is such a help that this will allways show up on the bank statement, to be accounted for. I must admit, that I am unable to understand that using cash should be helpfull to avoid spending. If anything, I am the other way round, cash spent could “go under the radar” of my bank statement and slip unnoticed by my tracking, allowing me to cheat on myself. And we are only human…
I think that I find cash useful because I can see it disappear in my purse. I took an amount of cash on holiday and knew that when it was gone it was gone. This made me think more about what I was spending it on. I am so glad that you have managed to get rid of your debt and can enjoy some luxuries now with your careful tracking. Thanks for sharing
I don’t track my outgoings, but now you mentioned it …..
I know how much i have and where it goes ( especiallynow that I’mon a pension) , husband says penny pinching lol, I say looking after the pennies.
Think i might take this forward though and show him the monthly outgoings, great idea, thanks toni x
No worries
I got into this a few years ago, I track everything now. It keeps me out of trouble and like you say ‘when it’s gone (cash) it’s gone’. X
Absolutely.
Hi we always write down in the kitchen diary what we have spent on that day. We have many different envelopes that we save money into. Food, cleaning, toiletries, medications, contingencies, tea & coffee out, lunch out, alcohol, & takeaways. We would be lost if we didn’t write it down but it does allow you to save that money if you don’t spend what is in that envelope. As it was a new year we restarted all the envelopes that had money in them. We raised £1,221.84 quite a lot of money. We paid for 7 holidays with that money. 1 week in Glossop , Peak District at a Travelodge. 1 week in Filey at Haven, 2 weeks at Scotland at Haven, 1 week in Lake District at Haven, 2 weeks in Norfolk at Haven & 1 week in Devon at Haven . It’s amazing how paying off all your credit cards can inspire you to save for things first. We don’t spend much as we try to enjoy life the simple way. Saving is the best way to have a holiday. As long as I have a flask for a cup of tea or miso & a sandwich or two. Then we are just grateful to have a car & go travelling again.
Brilliant. Haven holidays are such a bargain out of season.
I have an excel spreadsheet and note of everything I have spent or earned since 2008. Helps me know what I’m spending, what I need to earn to cover what I’m spending and where cut backs can be made if needed
Brilliant
Very good advice.
Also – if you want to save, save first, not just whatever is left after spending. By knowing exactly what your budget/ spending is you know what leeway you have to spend or save.
Absolutely. I had a direct debt set up for the day I got paid. Sometimes I had to borrow a bit back to get through the month, but usually it stayed in my savings.