Getting your finances sorted out is a big way of making you feel better about life. My financial situation isn’t perfect (the same goes for most of us) because I got into a lot of debt in my early twenties and I’m still paying it back now. However we here at Thrifty Towers have a system in place to make sure we can survive on what we have without too much stress. This post isn’t about saving money (I like to hope most of the rest of this blog will offer you some ideas) but more about how to organise your finances so you can save money. We don’t have an amazing system which will blind you with brilliance but we do make an effort to know our finances and that is key to having some kind of organisation surrounding them.
Step 1 – Know what is coming in and what is going out.
This seems to be something most people I know fall down on. It may seem basic but it is a good idea to sit down and work this out on a piece of paper rather than thinking you know what is what in your head.
– How much comes in from salary, benefits or other?
– How much goes out in tax/student loan/private pension payments?
– How much is your rent/mortgage and insurance?
– How much do you spend on utilities a month?
– How much does your car cost per month in payments, tax, petrol, maintenance, MOT, cleaning?
– Which debts are you repaying and at what rate?
– How much do you spend on public transport?
– What is your food budget?
These are just the loose basics, obviously it all depends on your specific situation.
Step 2 Keep an eye on the non-essentials
When you have things pinging out of your account on a regular basis it is easy to start to get caught up in the idea that every that is going out must be an essential.
If you’re struggling to survive check how much you’re spending on the following without thinking
–Top notch internet
– Mobile phone bills
– Landline phone
– Film subscription services
– Magazine subscriptions
– Club membership
Step 3 – Keep note
I’ve mentioned this before but I think taking a week to write down every single penny you spend is illuminating. Do you really need that chewing gum? Could you forgo that bus ride? Was that £3 on a nail polish really necessary when you have 76 Rouge Noir dupes at home already? Now work out what to cut out.
Step 4 – How to organise everything?
We keep all of our paper work for finances in one of these Ikea filing cabinets (which we picked up on Freecycle) however something like this would work equally as well.
How we do it
1. Add up everything that’s coming in.
2. Work out and add up everything going out (basics like rent, insurance, pension, car payments, loans, utilites, vet payments)
3. Work out our food (and now pet food) budget for the month – it can vary depending on the amount of travel and times we dine with friends
4. Figure out how much is left over.
5. Go through calendar and work out what else we need to pay for (nights out, club memberships, gifts, sporting events/gigs, trips away for weddings etc.) and work out our absolute budgets for each one.
6. If possible add to our savings account and rainy day fund.
7. Make a list of items we can sell on eBay.
8. Budget for upcoming events like Christmas, birthdays and holidays.
9. Check loyalty points with store clubcards etc. and make sure to use them efficiently.
We also sit down once a week and have a mini version of the above meeting. We’ll move things around inside various budgets if something unexpected has arisen etc.
Then we meal plan (read more here) and work out our weekly budget for food, along with travel and similar.
I check my bank accounts daily so I can keep track of any payments coming in and out. I also have a quick look at voucher code websites to see if there are any good codes floating round for items I might like to buy as gifts etc. For the past couple of months we’ve been using OnTrees, who you will note from my sidebar are my sponsors (although they didn’t pay to place this post) which is an app and website that allows you to see all of your financial accounts in one place. If you’re anything like us you’ll have a slew of different accounts which can make it a bit daunting to keep track of. This free service has helped us no end. It is essential you reclaim your finances. Don’t leave the bank statements in their envelopes unopened like I used to. Get it sorted, get it into a reasonable order and do it now.