Couples finances are a minefield. From who buys the loo roll, to the best approach to saving for a deposit – it’s pretty easy to come to some spectacular disagreements over money.

Early in my relationship with my now wife Ellyn, I became aware that one of the biggest issues was going to be the discrepancy between what her and I earn.

It’s not a massive gap, but (hopefully she won’t mind me saying) I do earn more than she does. A lot of this has to do with the fact that she’s a woefully underpaid nurse – but that is a story for another day.

If I look back to when our finances began to mesh together as a couple, it was almost certainly when we moved in together.

From that moment, we have saved for holidays together, bought cars, bought a house, got married, got a dog and now have a son. These are all big financial commitments or outlays.

So when our finances merged, my solution to that was to do my favourite thing – make a spreadsheet.

Big enough nerd about money that I am, I created a spreadsheet with a specific algorithm. Here’s how it works.

The spreadsheet is based on the 50/20/30 budgeting method (50% of income goes on fixed costs, 20% on debt or savings and 30% on discretionary spending).

The first step is to input our individual earnings. The algorithm totals this up to a combined figure. It then calculates what each percentage of this overall income our individual earnings represent.

Currently, of our total earnings, I earn 64% and she earns 36% of the total. So what does this mean? Once calculated, it takes into account our fixed costs and apportions how much we each pay towards this, based on our relative earnings.

In other words, I’m on the hook for 64% of the bills and she pays 36%.

Beyond that, individual subscriptions that we don’t share are portioned out, as are debt costs like credit cards etc. We don’t share credit card spending so we’re individually on the hook for what we owe.

Once this is all calculated, we are both roughly left with the same discretionary spending money each month.

It works well because neither of us is left feeling like we’ve been treated unfairly. If we were to split everything 50/50 Ellyn would be in dire financial straits constantly and it simply wouldn’t be fair.

More from Edmund Greaves

Modern couples

This is what struck me in this week’s Mouthy Money podcast – and my co-host Chris Tuite highlighted to me – our finances are, well, redistributive. One might say…socialist! Not something I’m know for, truth be told.

We were having this discussion with Charlie Richardson, one of the co-founders of a money app for couples called Lumio. Do check out the episode.

What I was struck by was two things:

1. Most people are not as fanatical about budgeting as me. Charlie did point this out, and I won’t disagree

2. These kinds of big financial questions for couples tend only to really take effect when big life events such as moving in together or getting married happen.

This is what makes Lumio’s idea compelling – it caters to couples at all stages of their relationships (ok, probably not with the nice person you’ve been on two Tinder dates with, but you get the idea).

Money is capable of derailing even the most budding of romances. How do you manage saving for that first holiday together? What if you want to move in, but you’re worried about how the bills will be split?

These are significant issues, which often we’re not equipped to deal with – especially when you’re in your 20s and you’re probably battling to manage money even just as a single person. Adding in a second just makes it all the more complicated.

So the good news is there’s now an app for that! I’m not being paid to say this, but Lumio seems like it might actually be a decent idea.

If you do happen to try it, let us know – we’d love to hear your experiences. The email to contact us is editors@mouthymoney.co.uk. Good luck out there!

Photo credits: Pexels

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Regrets, I have a few, but unlike Frank Sinatra I often mention mine. When it comes to my finances, there are certainly things I have had to learn the hard way. There are common money mistakes you can easily avoid with awareness and planning, and here are eight of the biggest.

Not paying into your pension 

When you are younger, particularly if you are feeling the pinch, it may be tempting to opt out of paying into an employment pension scheme. But this is a huge money mistake. Many people aren’t saving enough to have a comfortable retirement, meaning they will have to work much longer and have a lower standard of living.

By opting out, you are turning down free money, and what sane person does that? Your employer is obliged to contribute towards your pension fund, but most won’t if you choose to opt out. You also get tax relief on your pension contributions, helping to build your pension pot further.

For more information on pensions, check out this article from Money Helper.

Not having an emergency fund

Putting away money each month into an emergency fund provides a reassuring cushion. Having, say, £1000, tucked away can make those rainy days feel less wet.

Unexpected car repairs, a dentist’s bill, or a washing machine breakdown can all be dealt with without having to use a credit card or take on debt.

Not saving

Once you are paying into your pension pot and emergency fund, having regular savings can provide an even bigger safety net and financial security for unexpected events like illness or redundancy.

Savings can allow you to reach life goals such as buying a home, travelling or putting money towards university costs for your children.

Over time, saving regularly will help you to grow your money too. Do some research to make sure you are getting the best interest rate possible.

Read more from Shoestring Jane
on Mouthy Money

Not budgeting

Creating a written budget of the money you have coming in and what will be going out is the first step to taking control of your finances.

If you don’t make a budget and track your spending, it is hard to know when you need to rein it in and where you can save. It also allows you to work out how much you can afford to put away in sinking funds for things like Christmas, birthdays, car repairs, etc., as well as in longer term savings.

If you don’t know where to start, you can use the free budget planner from Money Helper.

Overspending 

In a world when we are constantly bombarded with marketing, it can be hard to prevent impulse spending. But overspending regularly can make a serious dent in your bank balance and potentially lead to debt.

Tracking every bit of spending you do for a few months will make you super aware of all the occasions when you buy stuff you don’t really need.

You can go old-school and keep a spending book with you, but nowadays it’s easier to do this on your smart phone. Many banking apps have a tracker facility or you can download spending tracker apps.

Not doing your research

When you do need to buy something, a common money mistake is to rush into your purchase without doing some research beforehand to find the best price and any potential discounts.

Shopping around will invariably find you a better price. It takes time and effort, but the savings, particularly on expensive items, make this a good habit to get into.

Not buying insurance

Some things in our lives are too precious not to insure. Your home, for one; there is a reason mortgage providers insist you take out buildings insurance. But what about the contents? If you had a major event like a fire or flood could you afford to replace them? 

Personally, I think it is a mistake not to have home buildings and contents cover. I always add the accidental damage option as well.

Having worked on an insurance claims line in my youth, I know that these are some of the most common events. When my then two-year-old daughter decided to draw on our brand new stair carpet with indelible ink, I was glad I had it!

If you regularly carry items like smart phones, jewellery or laptops away from home, or have an expensive bicycle, you should consider getting insurance for them as well. Make sure you shop around to get the best deal.

I also insure my pets. They are precious to me, and I would hate to be in a situation where I couldn’t afford treatment for a serious or life-long health condition.

However, once you have insurance, never allow the policy to auto renew and shop around every year. 

Being a loyal customer

As well as not allowing your insurance policies to auto renew, it pays to question your loyalty to other businesses. Just because you have always shopped somewhere, it doesn’t mean you are getting the best value for money. Your utility provider may not be giving you the best value for money, nor your bank. 

In fact, you may be offered incentives as well as a better deal for switching banks, broadband providers, insurers and phone providers. This is another area where doing your research can pay dividends.

By avoiding these common money mistakes, you will make the best of your financial situation, increase your wealth and avoid wasting your hard-earned cash.

Have you made any money mistakes which you’ve learned from? Get in touch and tell us about your experiences

Photo credits: Pexels

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Graduation days beautifully celebrate your hard work as a student, marking the beginning of a new chapter in your life. Then comes the post-graduation transition – which is difficult because no one really prepares you with money lessons for embracing the changes brought by adulthood.

As someone who very recently underwent this transition, I realised that we (students) know much more about quadratic equations than we know about personal finance. 

Being a business graduate, I presumed (wrongfully!) that I knew enough about money management, investments and savings. It wasn’t until I started earning and managing my own money that I realised that the most crucial personal finance aspects were never taught to us. Instead, you are expected to know it all right from the beginning of your career!

So, here are some of the many money lessons I wish I learned in school.

Read more from Richa Ved on Mouthy Money

Budgeting

While budgeting is introduced as a concept at a basic level in school, it gets far more complicated when you’re trying to spend appropriately, pay off debts, and save more – all at the same time.

And while most budgeting skills are taught for when you HAVE money, not much is taught about how it works when you don’t have a lot of it.

Budgeting at a personal level is step 1 of learning how to manage our money. We must calculate our respective disposable incomes, understand our spending patterns, and learn to prioritise our needs (rent, utilities, food, transport) over our wants (luxuries, travel, gifts, entertainment and other activities).

The 50/30/20 Budget Rule is a good thumb rule I started with – allocating 50% of my disposable income towards my needs, 30% towards my wants and 20% towards saving.

The taxation system

The taxation system was certainly an eye-opener for me in my adult years. Growing up I always understood what ‘tax’ meant but as I navigated through the entire tax system, I realised I didn’t know much about it.

From learning how to calculate my taxes and understanding the various tax bands to accounting for my personal allowance (or other benefits) and learning how to file year-end tax returns – it was a whole different world.

How to save right

Yes, savings are important and yes, we need to save some of the money we earn – But how? What’s the right amount? Where do I save? And why?

Sometimes it’s too late till we realise we should not just be saving towards our short-term pleasures (like Christmas gifts, a new gaming console, or a swanky car) but also towards long-term goals such as childcare and retirement.

A good tip is to automate your savings for your various financial goals to prevent yourself from overspending it right now.

The basics of individual investing

While saving your money is crucial, it’s most important to learn how to multiply it from the very beginning. Remember, the earlier you start investing, the larger your pot will grow.

Set a realistic timeline to achieve your financial milestones – like building your career, becoming financially independent, buying a house etc. – and find the best avenues for investing and growing your money as per your requirements.

Avoid any quick money-making scams and frauds and be sure to do your due diligence before putting your money anywhere.

The ins and outs of credit and debt

Loans and credit cards are wired into the system as common earning and spending methods. 

But the term ‘debt spiral’ isn’t heard as often. No one teaches you what it is, how to prevent it, or (god forbid!) how to deal with it. The same goes for student loans. So many students get into these without having a clear idea of the repercussions and potential impact. 

All these credit methods eventually count towards your credit score – an important indicator of your creditworthiness (ability to repay your debts) that companies use to offer you a mortgage, insurance, credit cards, or business loan.

Photo credits: Pexels

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Frugal Summer fun is not impossible. We may have had record levels of rain over the winter here in the UK, but there is no denying the weather is improving.

As Ella Fitzgerald sang, ‘Summertime, and the living is easy’.  It certainly feels easier to save money in the Summer. Here are some ideas to make the best of the season and have some frugal Summer fun.

Save money on TV

Better weather means more time outdoors and less huddled in front of the TV. Use this as an opportunity to review the amount you spend on cable, satellite and streaming services. Even if you just pause your subscriptions to Netflix or Disney for a few months you will save some cash.

Plan a frugal getaway

If you can afford a holiday, check out my post How to Find a Cheap Holiday That Still Fulfills Your Dreams here. Sometimes, it’s not about finding the best deal, it’s about being creative and doing things differently.

Instead of a package holiday abroad, consider camping, house-swapping or youth hostelling for a budget break in the UK.

Read more from Shoestring Jane
on Mouthy Money

Holiday at home

If your budget is super tight, have a staycation. Stay home and plan a series of days out in your local area. We often ignore the sights and tourist destinations just under our noses, and there is usually loads to do.

Start with your nearest tourist information centre. Failing that, libraries usually have leaflets and posters for local events.

Find free activities and events

Finding free local events and venues is a great way to save money in the summer. There is usually a lot going on when the sun is shining.

An internet search will produce a range of potential free activities. For example in my area, googling ‘free things to do in Essex’ tells me I can visit the Essex Police Museum, Hadleigh Castle, Maldon Promenade Park, Clacton Pier and Pets Corner in Harlow.

There are also free activities for children in my local library, historical trails, bandstand concerts and music in the park, summer fetes and nature walks.

Pack a picnic

Wherever you choose to go, take your food and drink and you will save a ton of money. This has the added benefit of less time spent queuing.

Pack a picnic, make a flask and take along a few treats. If you want a day off food prep, buy a cheap supermarket meal deal. You can usually purchase a sandwich, drink and snack for around £4 a person.

Eat from the pantry

Save money by setting yourself a pantry challenge. Instead of looking at the random ingredients in your cupboards and declaring there is nothing to eat, write a thorough inventory of all the food you have.

As you go along, certain meal ideas will occur to you, so make a note. Use recipe sites to research meals using the ingredients you find. For example, how can you use that half pot of mustard lurking in your fridge? Be bold and try new things.

Write a meal plan for breakfast, lunch and dinner for the coming week. You may still have to shop for a few fresh supplies but stick to your list and think of all the money you are saving.

Preserve seasonal produce

Now is the time to take advantage of cheaper prices on seasonal produce and buy in bulk. You can freeze some, make pickles or try your hand at jam-making.

If you grow some of your own food over the summer, even better.

Dry outdoors

Plan your washing around the weather forecast. On a fine, breezy day, your laundry will dry quickly and much more economically than putting your dryer on. The sun will also have a natural bleaching effect on sheets, towels and nappies. 

I have even put an airer in the greenhouse on damp sunny days!

Have cooler showers

Now that the weather is warmer, save energy and water by showering instead of bathing. Keep your showers short and turn the temperature gauge down a little.

Organise a garage sale

If, like me, you like to have a good declutter in the spring, why not make some extra money hosting a garage sale?

Advertise your sale on local Facebook groups, pin flyers on public noticeboards and let all of your neighbours know.

Set up trestle tables to display your goods, hang clothing and don’t forget to get a float together.

Host a potluck garden party

Get friends and family together for a potluck party in your garden or local park. The idea is that everyone brings a dish and some drinks to share, along with some outdoor games and activities. It’s a very cheap way to have fun.

Eat lots of salads

Save on energy and make the most of eating outdoors by preparing lots of salad meals. Combine various raw vegetables, pickles and croutons with cold meat or cured fish, cheeses and hard-boiled eggs.

Who wants to slave over a stove on a hot day?

Budget for the school holidays

It can be expensive when the children are off school over the summer. They want to be entertained, and you are likely to have more family excursions.

Make sure you write a budget and consider your spending limits in advance. Look out for deals on local attractions, such as those you can purchase with your Tesco Clubcard. When you go out, make sure you take some refreshments to help cut costs.

Set up fun things to do at home. Water play is a good idea. My kids loved to make a water slide with a large piece of tarpaulin and the garden hose. Pick up cheap craft supplies from the pound shop for dull days, and make a dressing up box with items like hats, feather boas, frilly nighties, etc. These can often be picked up in charity shops.

Careful planning will give you plenty of frugal ways to save money in the summer. What are yours?

Photo credits: Pexels

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Financial goals are really important. Without them we have no plan. We’re just nihilistic beings floating around with bank accounts in disarray.

But the problem with financial goals is they are daunting. So let’s make it easy. Instead of thinking “what are my financial goals?” just say to yourself instead: “what are my goals?”

Everyone has goals. If you don’t then…well, I can’t help you. But if you do, you’ve come to the right place. 

My own goals used to be really clear. I wanted to settle down and get married to my girlfriend Ellyn. I wanted to own a home to start a family. None of these are financial things.

But figuring out the financial requirements inside those plans was key to making them happen. 

To achieve them, it required budgeting, saving and some careful cash flow planning (God knows I love a Google spreadie). 

I know I’m making it sound like it was easy as pie but it wasn’t. But what made it possible was having clear outcomes in our minds, putting a number on achieving those outcomes, and using that focus to motivate our discipline.

Read more from Edmund Greaves
on Mouthy Money

Unlocking financial goals

Unlocking these financial goals means peeling back all of the complexity and starting from the very beginning.

Everyone has their own goals in life and this is totally fine. Want to travel the world? Awesome. Planning on buying a rambling country cottage in the Yorkshire Dales? Go for it.

First figure out where your finances are now, and where you think they need to go to get to that dream. Then make a plan for how to get there.

This is of course not easy either, but we are blessed with such a mad array of tools, guides, budgeting apps and whatever else to help you make that plan that the only thing stopping you getting there is your own enthusiasm to do it. 

And yeah this does sound trite coming from someone who has bagged his goals, but I have new ones that include paying off lingering debt (that I should have paid off first but didn’t) and making a better effort to save for my long-term future other than just with my workplace pension. 

No one in the world has neat and tidy finances. Money is messy, but you just have to stay on top of it the best you can. If you don’t stay on top of it, it will get on top of you. That’s life.

Want to hear more about financial goals and how to achieve them? Listen to the latest Mouthy Money podcast with hosts Edmund Greaves and interactive investor’s Myron Jobson. 

Photo by Bich Tran

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After a long, dreary Winter, the arrival of spring always gets me in the mood to tidy and reorganise my life.

It’s the perfect time to reevaluate and spring-clean your finances, too.

Here are some tips for a money reset for the spring.

Make a budget

If you don’t already have a budget, this is the perfect time to create one. A budget will allow you to plan and stay in control of your spending.

It also helps you to direct resources towards debt management, savings or investments. If you don’t know where to begin, Money Helper has a useful budget planner tool here. 

Knowledge is power, and writing a budget tells you exactly what is coming in and going out of your bank account.

Check where your money goes

Go through your last three month’s bank statements and categorise your discretionary spending into subject headings such as groceries, eating out, entertainment, clothing, etc.

Are there any areas that seem especially high? Can you reduce your spending in certain areas?

Check that you aren’t paying for any under-used subscriptions or memberships, and make sure you cancel any that you can no longer justify.

Going through your spending with a fine-tooth comb reveals how a lot of seemingly insignificant purchases for things like coffee, makeup, apps, music, books, etc can add up to a significant sum.

If you tend to make many impulse purchases, this post will help curb your impulse spending.

Identify where you can save on bills

A financial spring clean is a good time to review your household bills. Can you save money by switching suppliers or haggle down the price by threatening to move?

If you are locked into a deal, be sure to mark your calendar when insurance policies, phone and broadband contracts, etc are due to renew to give yourself time to shop around for a better deal.

You can save hundreds each year by taking half an hour to do this task.

Tackle debt

If you have debts, make sure you have a plan to pay them off. Check the interest rate you are paying on store or credit cards and investigate the possibility of a balance transfer to a card with a low or 0% interest deal.

Read this article from Money Helper on the pros and cons of doing this first to ensure it will work in your favour.

If your debt is giving you anxiety, don’t ignore it. As part of your plan to spring-clean your finances, you can make an appointment to see a debt advisor who will guide you through your options.

This article from Debt Camel contains a wealth of advice to get you started.

Spring-clean and declutter your home

You may wonder how decluttering your home can save money. If you are disorganised and have cupboards full of stuff, it is easy to buy duplicates of things you already have.

For example, a recent declutter of my cupboards revealed batteries and lightbulbs stored randomly all over the house. We kept buying more because we didn’t know where to find them!

Set yourself the task of going through every drawer and cupboard and organising your stuff. You don’t have to do it all in one go. Aim for one or two cupboards a week to break down what can feel like a daunting job.

This gives you the opportunity to shop from your own cupboards. You will locate things you forgot you had. Use them! This is likely to give you the same buzz as shopping for new things. In my case, secondhand clothing and books are a weakness and I don’t need to purchase more of either for some time!

Remember to declutter your kitchen cupboards as part of the process. It is really important to stock-take your food stores regularly so that you don’t waste groceries and can rotate them to use those with the shortest shelf life first.

Sell your old stuff

To help spring-clean your finances, your next step could be to sell some of the unwanted items you have decluttered. The extra money could boost your savings, be put towards an emergency fund or used to pay off debt.

Car boot sale season kicks off in the spring, so you could book yourself a pitch (there is a guide to making money selling at a car boot here).

Vinted is a good place to sell unwanted clothing, as there are no selling fees. However, if you have more upmarket designer pieces, you are likely to command a better price on eBay. 

To shift bulky items, Facebook Marketplace can be good. However, be aware of potential scams before you start.

Spring time is a season of renewal and optimism. Once you have spring-cleaned your finances, you will feel lighter and more in control.

You have to opportunity to shop around for the best deals, tackle debt and direct your financial resources so you get the best from your money.

Photo credits: Pexels

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Ramit Sethi, the author of bestseller I Will Teach You to Be Rich is a little different from the finance gurus of the past.

Although he believes in the age old principles of budgeting, or as he likes to call it “a conscious spending plan”, getting out of debt, and putting away for the future, he really focuses on this idea of building your “rich life”.

And he actually puts his money where his mouth is.

When it comes to how you should divvy up your money to live this rich life he talks about, he recommends staying somewhere close to the following guidelines¹:

1. 50-60% of one’s income to go on fixed costs. These are all the essentials to live, such as your rent/mortgage, household bills, groceries, transport, or any debts you may have that need tackling.
2. 10% of one’s income to go towards investments. This could be in the form of putting into a pension or an investment account such as a stocks and shares ISA in the UK.
3. 5-10% of one’s income to go towards savings. Saving for that emergency fund. Towards the house deposit. The car you need. Those sorts of things.
4. And last but certainly not least, a whooping 20-35% of one’s income to go on guilt-free spending. Essentially, spend it on whatever your little heart desires.

Although these guidelines aren’t too dissimilar from the well-known 50-30-20 rule (50% needs, 30% wants, 20% debts/savings) I think it may be how he has phrased the fourth budget category, and how he talks about it in his podcast and Netflix show, that feels a little scandalous for the likes of me who spends less than 15% of my income “guilt-free”. But that’s a topic for another article.

After the initial shock and some time to really digest, I can’t help but think maybe this is the kind of guideline that will actually work for the vast majority of millennials and Gen Z’s who both desire and are accustomed to a certain type of lifestyle. Often a much more expensive one than our parents and grandparents.

With any budgeting guidelines, they are just that, guidelines! Everyone’s circumstances are unique and it’ll be almost impossible to have a one size fits all approach to budgeting.

But budgeting guidelines are a useful way to help you categorise your spending to see where your money priorities lie and if they align with where you want to be.

With Ramit’s guidelines, it puts into place some securities for the future by squaring away 15% into savings and investments (maybe a bit low for those who want to be more aggressive savers), but crucially it allows for up to 30% of your budget to be guilt-free. No strings attached. No questions asked.

So what do you think of the idea of 30% guilt-free spending? Does it make you a little uncomfortable – if so, why? Or do you think it’s the right amount to give you the feeling of that infamous “rich life”?

References

1. https://www.iwillteachyoutoberich.com/conscious-spending-basics/

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If I asked you what your biggest fear with money is, what would you say? 

A lot of people say “my biggest fear is not having enough money.” 

Now this looks different for everyone, but it can cause you to overspend… counterproductive right? If we are scared of not having enough money in the first place, why do we keep spending it? Why don’t we just hold onto it?!

First, what we need to understand is that the brain’s job is to keep you safe, not happy.

Back in caveman days, your brain evolved to make sure you didn’t get eaten by a lion or didn’t die from starvation… it would help predict the future using past events and experiences. 

Because the brain likes what it can predict. It HATES the unknown. 

It feels comfortable and safe in the familirity of what you know or what you have already experienced. 

THIS is why we repeat the same self-sabotaging behaviors… because it keeps us in the familiarity and safety of the known! 

If you overspend, it means you have less money to manage and hold onto. And even though it is painful, you don’t have to deal with the unknown… the unknown being having loads of money. 

Your brain doesn’t have to deal with the stressful scenario of… what happens if we have loads of money? What do we do with it? And what happens if we then lose it all? 

Overspending is helping you to feel safe. 

CRAZY. 

So what is the solution? 

You have to help your brain and body feel safe in the feeling of holding onto money. 

You have to feel and know you are worthy of having money. 

You have to build the trust that having money is safe. 

You can use practical solution to solve the issues of overspending, you can automate your finances to move money into your savings, you can have apps that help you stay on top of your spending, you can set budgets or spend in cash. 

All of these things are amazing BUT you need to go deeper than that. And change your relationship with money on a subconscious level. 

Create a money mantra – pick an affirmation that helps you feel comfortable with holding onto money and reminding yourself you are capable of looking after and growing your money

Keep a vision board – visual imagery is so powerful and strong for the brain. Use visual aids like images and words (that you look at everyday) to  literally help yourself feel excited and safe and calm around having more money. 

Practice gratitude – remind yourself on a daily basis of all the amazing things you already have, you do not need to spend money to feel happy or to change your state of being. You can find that energy and joy within your first. 

Overspending is something personal to you and will show up in different ways but working on your relationship with money and yourself, will have a huge impact on growing your money!

Photo Credits: Pexels

The post ONE reason you might struggle with overspending appeared first on Mouthy Money.

We all develop unhealthy financial habits from time to time. However, with the cost of living increasingly on the up, many of us need to take a long, cold look at where our money is going.

Here are six habits to conquer if you need to save money.

1# Stop making excuses & write a budget

There comes a time when you are struggling with money and debt when you need to look your situation squarely in the eye and stop making excuses. Taking a hard look at your financial position and writing a budget will give you back control and help you deal with debt.

Budgeting isn’t thrilling, and it is tempting to say, ‘I will start next month’ or ‘I haven’t got time to budget’. But consider your end goal. Do you want to save money and take the pressure off your finances? MoneyHelper has a helpful budgeting tool to get you started here.

2# Stop digging your head in the sand

Many people with debts make only the minimum required monthly payments or pretend their debts don’t exist and stop paying them altogether. Your debts will catch up with you eventually, so sticking your head in the sand isn’t an option.

Start by making a list of all of your debts, such as rent arrears, catalogue and store card payments, credit cards, etc. Consider contacting your creditors to see what help they can offer. Read this step-by-step guide to dealing with debt from Citizen’s Advice first. It will help you make a plan to start dealing with debt.

Sometimes it’s easy to feel overwhelmed by money worries, so you put off finding a way out of the mire. But you can get help to find a way forward. Check out StepChange, MoneyHelper,  or Citizen’s Advice for more advice.

3# Stop trying to keep up with the Joneses

As Dave Ramsey says: “We buy things we don’t need with money we don’t have to impress people we don’t like.”

If that’s what you do and you can’t afford your current lifestyle, you need to make changes. Stop comparing yourself to other people and definitely give up keeping up with the Joneses. 

There are many ways to live well for less. You can get some great ideas about how to live more frugally and make the best of your money on my blog Shoestring Cottage.

4# Stop buying so many takeaways 

When I was a kid money was tight. Takeaways were a very rare treat. We might go to get Chinese food on someone’s birthday or buy fish and chips on holiday. There weren’t really that many options!

Now you can order a takeout via various apps from a huge selection of cuisines and get it delivered too, so there is a lot more temptation. It is easy to order takeaway food when you are tired or pushed for time, but the cost of doing this regularly can quickly run in hundreds of pounds each month.

This is one spending habit to conquer if you need to save money. Start by deleting apps like Just Eat and Deliveroo and make sure you unsubscribe from marketing emails. You can still have takeout food, but stick to what you can afford and add this to your budget. 

I find that having easy things in the freezer helps for those times when you might be tempted by a takeaway, so stock up on a few treats. They will be much cheaper.

5# Stop being aimless with your money

I have already covered the importance of writing a budget, and this will definitely help you to be more organised. 

Another way to keep you on track is to feel you are working towards a goal. It might be that paying down debts has to be your number one priority, or you might want to start saving for a home deposit, drop a day at work, buy a new car or top up your pension. 

Taking time to think about some financial goals and making a plan to achieve them will focus your attention and stop you frittering your hard-earned cash.

6# Stop impulse shopping

There are so many opportunities to shop nowadays. You don’t even have to leave the comfort of your armchair!

I used to advise impulse shoppers to avoid window shopping and not use shopping as a means of entertainment. Now you don’t need to physically be in a shop. You can buy literally anything on your smart phone. The worst times for me are when I am scrolling social media in bed – ads pop up everywhere. It is so tempting! I can purchase a new set of cushions before I have even properly woken up.

Notice what your habits are so that you can be aware of when you are most likely to aimlessly spend. Evaluate each purchase you make. Ask yourself if you really need what you are buying. Do you even really want it? Could you get it cheaper if you shopped around? Could you find it second-hand?

Once you have a product in your virtual shopping basket, try leaving it there for a few hours. You may forget about it altogether or decide you don’t need it after all.

When you do make an online purchase it is easy to find you have signed up for promotional emails and newsletters too. Unsubscribe when this happens to avoid yet more temptation. 

Once you get into good financial habits, you will find your attitude towards your money begin to change as you question how you spend, how much you can save and what your goals are for your cash. What habits do you want to conquer to save money?

Photo Credits: Pexels

The post Six habits to conquer if you need to save money appeared first on Mouthy Money.

You get paid, you put some money into your savings, but by the end of the month it is out again and feels like you have made no progress at all. Does this sound like you?

This tiresome cycle is making it so hard to actually grow your savings. 

Know that you are not alone though, because according to savings stats from the FCA, up to a third (34%) of UK adults had either no savings, or less than £1,000 in a savings account.

Every time you dip into your savings, you are stealing money from your future self. 

And there might be a number of reasons why this is happening… 

• Maybe you are putting too much in there and have so little to survive off of, that is becomes unrealistic you won’t dip in
• Maybe you don’t feel excited by your financial goals
• Maybe you keep getting FOMO and dipping into your savings to pay for things all of your friends are doing…

So let’s explore the different ways to stop dipping into your savings… 

Be realistic with your savings goal

Very commonly, people will try to save a really large portion of their income in the hope they can grow their savings quickly but they are setting themselves up for a loss. 

Whilst it would be amazing to be able to save 50% of your pay, it can leave you with so little money for the rest of the month you have no choice but to dip into your savings. 

You are better off saving a much smaller amount and building it up over time for consistency, then large amounts of money you keep taking back from. 

Connect with your goals and your WHY

If you are saving for something big and exciting like a trip or a house or a business venture… get excited by it! Tap into the emotional reason for saving this money. 

Connect with that future version of yourself and the life you are creating for them. The more you can feel emotionally connected to this goal and your reason for saving, the less likely you are to take from your future self. 

Have a guilt-free spending pot

If you find yourself dipping into your savings so you can buy random things, put a small amount of money in your monthly budget for a random impulse purchase so that you still allow yourself the fun and freedom to make random purchases but without it affecting your goals. 

Money is there to be enjoyed in the now as well as saved for the future. So find that happy balance for you!

Lock away your savings

Sounds like a drastic measure, but if you really struggle with touching your savings and sabotaging your financial progress then put friction between you and your money. 

Save it in an account that you don’t have easy access to. Take the app off of your phone. Save your money in an account that is not attached to yourmain bank account so its not so easy to transfer money around. 

Or maybe even give your savings to a friend to look after….

Photo Credits: Pexels

The post How to stop dipping into your savings appeared first on Mouthy Money.