A couple of weeks ago, I shared some of my organisational tips over on Instagram. As a Virgo, I'm all about planning and organising - it brings me such a sense of calm!
One question I received was whether I could share some tips on budgeting. As I've always been the main wage earner in our family, I've always been the one in charge of budgeting and I have certainly developed my own tricks over the years when it comes to keeping on top of things.
Now it's worth mentioning that finances for our family are probably different to most - my partner and I are both self employed in businesses that experience busier periods as well as regular lulls, so our income can vary by thousands of pounds from one month to the next. This of course makes budgeting all the more important, as we need to ensure that we have enough put aside to see us through the low income months.
I make no secret of the fact that money and finances are something we have struggled with greatly over the years. We are both from working class backgrounds with families who earn averagely, and neither of us were given any financial help toward setting up a home. We also didn't go to university as it was more important for us to start working and paying our own way as soon as possible.
This means that, although we were both in full time employment for most of our adult lives, we were never able to save up. Our minimum wage jobs provided only enough to pay for rent and bills, with minimal amounts leftover for leisure and nothing to contribute to savings.
Once my declining health resulted in me being unable to hold down employment any longer, we spent a few years getting to grips with a new way of life. For a while, my other half tried to remain in employment but this didn't work around my health issues and caring for 3 small children.
Luckily, my from-home business took off and now, 5 years later, we are finally starting to get to a point where things have improved. With both of us now working from home - we're able to maintain flexibility around my health issues and caring for the children, and things have been steady enough to allow us to build up a healthy savings account.
I put a lot of this down to better budgeting but also more stability - even with the best budgeting intentions in the world, it's impossible to save money when you're only earning enough to keep your head above water.
But enough of my waffle....for those that are interested, here are some of the ways I manage our household budget.
Keep A Monthly Record
I have a planner with a dedicated budgeting section which I find very useful but any old notebook would do of course!
I keep a list of my regular bills, along with the dates that they're due to be paid - I then make sure I tick them off as they're paid. This enables me to keep track of what's been paid and notice if any issues with direct debits should crop up, to avoid any late fees or bank charges.
I also keep a list of my monthly expenditure to give myself an idea of where I may be overspending - doing this can feel a little tedious at times but there's nothing like seeing how much money you're spending on convenience food to make you reel it in and improve your meal planning!
Separate Outgoings
I find it helpful to keep our money in separate accounts for various things, as it helps me to see it sectioned off.
So each month, I send over our rent money to one account ready to be paid when its due - that way I know I can't accidentally dip into it. I do the same with our monthly food budget - I allocate £400 for food shopping, and I keep it in a separate account with no debit card attached to it.
Then when it's time to do the shopping each week, I transfer £100 out of the account to pay for it. This means I don't go over my £100 weekly budget, and also means that I don't have to worry about running out of money for food no matter what else happens that month!
Pay Myself A Weekly Wage
As a self employed person, my income varies greatly from one week to the next. Some weeks I'll be lucky if I get £100 come in, other weeks I'll get £2000.
I used to just let the money trickle in to my current account in this way, and live accordingly but this was not a good approach. It gave me a "feast or famine" mind set and led to me overspending on the weeks a good wage came in because I was over excited at having money!
Now what I do is send ALL of my income to my savings account. I then pay myself a weekly wage out of my savings account every Friday.
This means that my income is steady and regular, it helps me to budget better and it also allows my savings account to build up bit by bit. Ideal!
Set A Realistic Savings Goal
If you want to save money, then it helps to ensure that the goals you're setting are realistic. From a psychological perspective, we're far less likely to keep going with something like saving money if we're consistently failing to meet our goals - we become demoralised, and we begin to self-sabotage by following the "What's the point, it's never going to happen - might as well spend it!" mindset. It's such an easy trap to fall into.
The best way to try to start saving is to start with a small, achievable figure. I like to use an online savings calculator like this one from Piggly to help determine how much I can realistically afford to save based on my usual average income and expenditure.
I find that once I start hitting my small savings targets, I feel motivated to keep going. This is how we went from absolutely 0 in our savings account for many years, to now having a very healthy amount saved - I have also found that the more money we have in our savings account, the LESS inclined I am to want to spend it. I want to see that figure continue to rise!
Look For Opportunities To Earn & Save Extra
I'm a big fan of finding ways to both save and earn extra cash wherever possible.
My partner has a tendency to look at £2 savings as meaningless, but I like to do the math and work out what that saving will add up to over time - it suddenly seems much more worthwhile! For example, paying £2 to park somewhere when you could walk a few steps further and park for free may not seem like a big deal - he would usually think it's worth the £2 to shorten the walk.
I like to look at not as £2, but as over £100 over the course of the year if we make that saving every week - and wouldn't I be glad of that £100 at Christmas time?!
I do this with everything - I never buy shampoo and toothpaste anywhere other than Home Bargain where it's cheapest by a few pounds.
I also insist on doing weekly car boot sales where we may only earn £30 per week but over the course of a year this means an extra £1,500 into our savings account - so instead of looking at it as an afternoons work for £30, I look it as a decluttering whilst earning enough to pay for a nice family holiday next year!
These small little changes in mindset can really make all the difference.
Use A Savings App
This is something I've only been doing for a few months, but I'm a big fan. The one I use rounds up what I spend each week to the nearest pound, and takes those pennies into a savings account which I can access at any time.
In just a few months I've already managed to save £400 without even noticing the extra money leaving my account - I plan to use this money for Christmas spends, which will be a big help and should mean that I don't need to dip into my main savings account!
I hope these tips have been helpful, if you have any of your own budgeting tips and tricks to share I'd love to hear them in the comments!
If you enjoy my blog, please consider following me on Bloglovin'
