Do you ever feel like your money is a bit of a mess? You’ve a fair idea what’s in your bank account, but you’re still fumbling with cards at the checkout, deciding which one to use? You frustrate yourself by missing a payment on a loan or a utility bill, not because you went mad on ASOS, but because the direct debit came out on a awkward date, or you forgot to transfer funds to a certain account?
Everything comes good each and every pay day, but towards the end of the month, things can get a bit… messy. I was feeling a bit like that and it stressed me out so much. So I did something about it.
This wasn’t about cutting back or saving (on this occasion), it was about becoming more conscious, which in turn took the stress away.
This is definitely not an expert guide, but this is how I got my financial shit together, in case it helps you do the same.
1. Budget, once
Groundbreaking, eh? You might be thinking to yourself, I’m just not that person. I’m never going to sit down at the start of every month with the calculator out, counting the pennies. Me neither. But, done right, you only have to do this once.
Start a spreadsheet and get it ALL down. And I mean everything. From the big things like the mortgage, bills and childcare fees, to every little phone app subscription. Yes, even that iCloud one for €0.99.
Include realistic amounts for grocery shopping. Do you get your hair done every second month? Half the amount goes on to your monthly budget so. Nails? Put it down. A mistake a lot of us make is thinking about that kind of regular expenditure as casual spending, and not accounting for it properly.
Be absolutely realistic about how much you spend, otherwise it’s pointless. The grocery shopping total might make you squirm, but it is what it is. This isn’t an exercise in cutting back (but if you need to, it’s the best place to start for that too ). It’s just about being conscious of it all, and having everything laid out in black and white.
Now you can decide on a monthly ‘spending money’ amount, when all the regular expenditure is covered. That unaccounted for money for random bits the kids want, a Deliveroo lunch when you can’t be arsed making something, or a cheeky online purchase.
Which brings me on to my next point…
2. Separate your spending money
Use Revolut or similar to separate your spending money. If you have a second bank account with another card, that works too.
Transfer your spending money amount to Revolut, when you get paid. Use your Debit card for everything that’s part of your budget — Revolut for anything extra.
It means you always know where you are, financially speaking. It might not stop you overspending occasionally, but it makes you realise you’re doing it, and that’s half the battle.
But don’t transfer this amount yourself, make it automatic…
3. Automate all the things
Standing orders are not just for bills. When all movement of money between accounts happens automatically, nothing gets missed and nothing is late.
If your bills come out of a different account than the one you get paid into, set up an SO to automatically transfer enough to cover them all for the month, the day you get paid. Set one to automatically transfer money into savings, the day you get paid before you can spend it all. And set one up to transfer your ‘spending money’ amount. And so on.
When it comes to any transferring that happens regularly, forget about it and let the bank do the work for you.
4. Timing is everything
Make sure all bills and standing orders to external people come out of your account immediately after you get paid. If they don’t, change them. The bill date is usually whatever date you happened to set up the account, but nobody wants to pay a heating bill that can vary so much month-to-month, three days before pay day.
It sounds like hard work, but I promise you after a couple of quick phone calls it’ll be sorted and it makes such a difference. In fact, if removing ‘pending payments’ from your list of things to feel anxious about is the only thing you take from this article, it’ll be worth your while.