This is what came tumbling out of my purse when we came back from Scarborough last week. Not a pretty sight, but it seems I just can't throw away a receipt without tracking it first.
Do you save your receipts? For a long time I didn't keep track of money at all, partly because I didn't have much and it was quite easy to see what was (or, more often, wasn't) left. Then I ended up with a small but increasing sum on a credit card, and my regular income stopped, and I realised pretty sharpish that I'd have to get a grip.
About nine years ago, I joined the Money Saving Expert (MSE) forums, and the people on there have been a source of much advice and all round cheerfulness over the years. I've learned a lot about money, and one of the most valuable lessons has been how much it misbehaves if you don't keep a close eye on it.
I've always been pretty thrifty, again, mostly due to having very little money for a long time. I don't have expensive tastes. I learned on the MSE forums where I could save more, and how to make a bit extra through completing market research surveys and various other little tips. I no longer do most surveys (I don't need the extra money now and I always found them quite tedious), but if I needed a bit extra I'd pick them up again.
It was MSE folks who encouraged me to keep a spending diary. I'd probably tried to do this on and off over the years, with little success, but they talked me through it, and I finally stuck with it. I created a budget, and wrote down every penny I spent - and it quickly became very obvious that most of my spare money (and some that was allocated for other things) went on cups of tea and cake in cafes. Hmm...
Do you save your receipts? For a long time I didn't keep track of money at all, partly because I didn't have much and it was quite easy to see what was (or, more often, wasn't) left. Then I ended up with a small but increasing sum on a credit card, and my regular income stopped, and I realised pretty sharpish that I'd have to get a grip.
About nine years ago, I joined the Money Saving Expert (MSE) forums, and the people on there have been a source of much advice and all round cheerfulness over the years. I've learned a lot about money, and one of the most valuable lessons has been how much it misbehaves if you don't keep a close eye on it.
I've always been pretty thrifty, again, mostly due to having very little money for a long time. I don't have expensive tastes. I learned on the MSE forums where I could save more, and how to make a bit extra through completing market research surveys and various other little tips. I no longer do most surveys (I don't need the extra money now and I always found them quite tedious), but if I needed a bit extra I'd pick them up again.
It was MSE folks who encouraged me to keep a spending diary. I'd probably tried to do this on and off over the years, with little success, but they talked me through it, and I finally stuck with it. I created a budget, and wrote down every penny I spent - and it quickly became very obvious that most of my spare money (and some that was allocated for other things) went on cups of tea and cake in cafes. Hmm...
These days, things are different. Having shot from being in the bottom 20% of income distribution in the UK to being in the top 20% in just a few short years, I'm well aware of two things:
Privileged is the right word. I feel lucky, but I've worked hard to get where I am, and made some difficult decisions to get too (including living on a very low income and doing multiple jobs for a lot of years while I studied). So it's not just luck, but equally it wasn't all just me - I'm also aware that there was a good degree of circumstance involved. Not everyone has the same opportunities as I did, and by that I mean a decent secondary school education, a family who encouraged (but didn't push) me to learn, no dependants, winning a research grant to pay for my PhD (including living costs), and all manner of other things, without which this might have been achievable, but it would have been a heck of a lot harder. So yes, privileged.
Incidentally, if you'd like to see where your income fits in relation to the rest of the population, this website is interesting.
Anyway, the point is that, while I've been in my new job nearly a year now, I could easily be made redundant tomorrow, as could most of us, and that thought makes me want to keep an eye on what's going on in my bank account.
- how privileged I am, and
- how precarious financial 'stability' can be
Privileged is the right word. I feel lucky, but I've worked hard to get where I am, and made some difficult decisions to get too (including living on a very low income and doing multiple jobs for a lot of years while I studied). So it's not just luck, but equally it wasn't all just me - I'm also aware that there was a good degree of circumstance involved. Not everyone has the same opportunities as I did, and by that I mean a decent secondary school education, a family who encouraged (but didn't push) me to learn, no dependants, winning a research grant to pay for my PhD (including living costs), and all manner of other things, without which this might have been achievable, but it would have been a heck of a lot harder. So yes, privileged.
Incidentally, if you'd like to see where your income fits in relation to the rest of the population, this website is interesting.
Anyway, the point is that, while I've been in my new job nearly a year now, I could easily be made redundant tomorrow, as could most of us, and that thought makes me want to keep an eye on what's going on in my bank account.
These days, I don't use a paper spending diary, I use a programme called You Need A Budget, or YNAB for short, and it turns out that, yes, a fair chunk of what I spend goes on tea and cake in cheery little cafes. YNAB software isn't free, and so I'd never recommend it for anyone who was struggling with money, although you can use the methods without paying for the actual software. I've used it for a couple of years now, and I love it. It forces me to allocate every pound that comes in to a particular 'job' - whether that be 'holiday' or 'emergency' or 'new car' - and doing that means that you don't have a generic 'savings' pot that you mentally allocate to holiday AND emergency AND new car.
It's basically the age old envelope system, but with a fancy-pants app and lots of pretty colours.
When I'm about to spend something, I look on the phone app to see how much money I have in that particular category. If there's not as much as I'm about to spend, I have to decide where I'm going to steal it from. Holiday fund? Christmas? Dentist? Hmm. Makes that cake seem slightly less appealing, knowing I'm stealing from a particular fund, doesn't it? And that's the beauty of it - it forces me to acknowledge that by spending on one thing, I'm taking away my ability to spend on something else.
It's basically the age old envelope system, but with a fancy-pants app and lots of pretty colours.
When I'm about to spend something, I look on the phone app to see how much money I have in that particular category. If there's not as much as I'm about to spend, I have to decide where I'm going to steal it from. Holiday fund? Christmas? Dentist? Hmm. Makes that cake seem slightly less appealing, knowing I'm stealing from a particular fund, doesn't it? And that's the beauty of it - it forces me to acknowledge that by spending on one thing, I'm taking away my ability to spend on something else.
Anyway, the point of all this waffling is that, every couple of days, you'll find me sat with a cuppa, gathering all my receipts and making sure I've entered them all. Not the most exciting activity, but one that I actually find quite satisfying. Being forced to confront my spending decisions every few days does really make me think twice about what I buy.
Of course, I'm not perfect by any means. Just this week, for example, I stole from the Christmas savings pot to top up our holiday fund so we could sneak off to Scarborough for a few days. The 'new car' fund only has £54 in it, so the old car had better keep going for a while. But I'm not kidding myself about what I'm doing. For me, whatever you earn, it's about making sensible decisions, based on the information available. And the better that information is, the better decisions you'll make.
I'm not going to stop spending in cafes any time soon. Most of the ones we go to are small local businesses that I'm happy to support. But there are other things I am willing to compromise on. We only have one car, and it's thirteen years old. We've done most of our house renovating ourselves rather than paying other people. We stock up on things when they're on offer, and rarely buy branded anything. When I have the time and head space, I make bread, jam, soap, and many kinds of soft furnishings and household items. We use things til they run out or break (and sometimes we tape them back together and keep them going for a while longer).
I'm doing a lot of pondering about money at the minute, because at the minute we don't have a mortgage, and pretty soon we're about to take out a rather large one. We won't take on more than we can afford, and we'll try to pay it off as quickly as possible, but it's still quite a commitment. It means I'll be more reliant on my job than I've ever been. Lots to think about...
Of course, I'm not perfect by any means. Just this week, for example, I stole from the Christmas savings pot to top up our holiday fund so we could sneak off to Scarborough for a few days. The 'new car' fund only has £54 in it, so the old car had better keep going for a while. But I'm not kidding myself about what I'm doing. For me, whatever you earn, it's about making sensible decisions, based on the information available. And the better that information is, the better decisions you'll make.
I'm not going to stop spending in cafes any time soon. Most of the ones we go to are small local businesses that I'm happy to support. But there are other things I am willing to compromise on. We only have one car, and it's thirteen years old. We've done most of our house renovating ourselves rather than paying other people. We stock up on things when they're on offer, and rarely buy branded anything. When I have the time and head space, I make bread, jam, soap, and many kinds of soft furnishings and household items. We use things til they run out or break (and sometimes we tape them back together and keep them going for a while longer).
I'm doing a lot of pondering about money at the minute, because at the minute we don't have a mortgage, and pretty soon we're about to take out a rather large one. We won't take on more than we can afford, and we'll try to pay it off as quickly as possible, but it's still quite a commitment. It means I'll be more reliant on my job than I've ever been. Lots to think about...
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