Welcome to the newest section of my website, finance and lifestyle talk!
Most of my time on a day to day basis is spent looking at figures and working on accounts so I thought why not share a few of my own tips with you all!
Today I'm going to be talking about some basic techniques I use to help me save and keep my money organised.
It's important to prepare for those unexpected expenses and even the regular ones like birthdays, Christmas shopping, getting your hair done and so on...which might take a larger chunk of money than your usual monthly expenditure. What I like to do is keep money separated and organised so I can see how much I have to spend on what. A couple of ways this can be done is by using different bank accounts (I think I have about 6 different bank accounts in total LOL) or the envelope system if you prefer to have cash.
So for example we may get paid £2000 at the end of month, it's useful to split this out right away so you remove any funds needed for your essential monthly expenditure and what you want to save. £600 for bills £500 for saving etc.
SEPARATING YOUR CASH:
#Account 1 Bills - I personally like to have all my direct debits, mortgage and bills coming out of 1 bank account - this way I know I can transfer a lump sum at the beginning of the month then forget about it.
There is nothing more annoying than seeing a large balance of funds in your account, you start spending away then it suddenly drops by half when your direct debits come out throughout the month and you end up with way less than expected.
#Account 2 Savings - I then transfer an amount into saving accounts. This can be as little or as much as you like! Saving around 10% of your income is a good place to start. I have a few savings accounts, one is a 'do not touch this unless there is a major emergency' kind of account, another is for 'general savings for minor works, birthdays etc', another for beauty treatments and so on. If there is something specific you are saving up for such as travelling or buying a house, car, it's a good idea to have a separate account to save for this too.
To get started with your savings organisation, I suggest you work out how much you usually spend on birthdays, Christmas, hair, household fixtures etc each year then divide this by 12 to give yourself a sensible amount to keep aside each month. This can be really useful to avoid having months where you are left with no money and resorting to credit cards or borrowing.
I personally love to have my money in various different places to take from when needed! I think subconsciously we are more careful with our money when we have smaller amounts in different places rather than 1 lump sum. It's also worth researching bonds and other types of savings account for money you will not need anytime soon.
#Account 3 your 'current' spending account - The idea of this system is to remove all the money you know needs to be paid out or you want to save. Leaving only the amount you are happy to spend down to the last penny that month. I think physiologically this makes you be more careful with your money...if you check your current account balance and see only £250 rather than £1500 you can make sure you are being cost effective with each purchase. So in your 'current' account, only leave your free to spend funds for the month!
Envelope system - The envelope system is a similar idea but is done using physical cash rather than transferring between bank accounts. So again you could have an envelope for birthdays, beauty, home maintenance and each month you would draw out a certain amount of cash to put in each envelope. When the time comes you would already have the money ready and waiting, without taking extras from your monthly expenditure!
Of course there will always be times when something happens you didn't budget for, but I think this is definitely a good way to start to keeping your monthly expenditure under control and savings in tact.
I hope this post has been helpful to some of you, I'd love to know your thought on my finance blog? As always thanks you so much for taking the time to read and check out my website.. is it much appreciated!
Welcome to the newest part of my site. Here I will be blogging about finance, interior design, food and other general lifestyle topics!