A {Simple} Guide to Money Management

Money is a subject we often brush over in everyday conversation yet it is so often one of the number one things that plays on our minds. Whether you’re a spend it Sally or save it Stacey money is something we all have to think about and manage in our lives.

I don’t know about you but I don’t recall being specifically taught about money management and I hold my hands up to the fact it’s not something I’ve ever been partcularly good at {even having worked in finance!} I’d much rather spend than save and in a world where we can get {seemingly} endless credit, “get out of jail free” loans and everything next day delivery it’s easy to see how people get stuck down the rabbit hole of debt and living pay cheque to pay cheque.

To give a bit of context we’ve had times where we’ve had both cash to spare in the bank and then also been through some really tough times with money. Mr H and I both come from “working class” families and have earnt our own money from our mid-teens. I went to Uni when I was and ended up taking out a post-graduate loan after my degree to pay for another 2 years of education. This loan {and it’s high interest/monthly repayments} was the begining of what felt like a downward spiral with finances and would end up hanging over me for the best part of 10 years following graduation.

Add to this stints of unemployment, reducing working hours after having children and generally poor financial management money has been more of a stress in our lives than a comfort and in many ways something we avoided dealing with. Even when we had savings and “disposable” income we didn’t {in my opinion} manage it in a way which would serve our lives beneficially.

About a year ago I stumbled across a YouTube video by Jordon Page {from funcheaporfree.com} called The Simplest Budgeting Method Ever. And it changed the way I managed our everday money FOREVER. Jordon’s “the simpler you make it, then the more realistic it is to implement into your life permanently” methodology is {literally} fool-proof.

In a nutshell, Jordon uses an envelope to split your month into weeks then split your everyday spending {outside of bills} into 2 budgets – groceries {including household items such as washing powder, loo roll etc.} and other {which includes any other everday expenditure from coffee, to clothes, haircuts, to birthday gifts}. You then workout your monthly budget {which may change depending on the month – i.e, kids’ birthdays, Christmas etc.} and split this into the number of weeks in that month. You then write down all your expenditure into the appropriate column, minus the amount from your budget and save your receipts into the envelope. Genius!

{The Envelope Budget System in Practice}

Jordon’s only rule is that you can “borrow” from the next week in the SAME column but not from between olumns. E.g, if your weekly grocery shop budget is £100 but one week you spend £120 then you can reduce next week’s budget to £80 rather than using £20 from your Other budget.

Every time you spend you work out how much you have left so that you’re always keeping an eye on your budget. Keep the envelope in your handbag and try to get into the habit of keeping it up to date on a regular basis. Just imagine at the end of the year having a neat stack of 12 envelopes containing all your receipts – an organisers dream! Make sure you check out Jordon’s video for more information.

To help you get started I’ve also created some super easy to use FREE downloadable resources {including an Excel version with formulas already in place} to work out your monthly budget, track income and expenditure and a monthly bills tracker so you know exactly when to expect bills to be paid out of your account{s} – all available on my Resources page.

{Free Budgeting Resources Available}

To finish off – here are some of my top tips for {simple} money management:

  • Be honest: It’s easy to bury your head in the sand when it comes to debt {trust me I’ve been there} but it’s something you have to face and accept in order to start making a plan to do something about it.
  • Look out for autorenewing subscriptions and end of free period payments: We’ve all been caught out by these!
  • Simplify your bank accounts: Do you really need 6 different bank accounts?!
  • Delete shopping apps: If {like me} you’re a habitual impulse buyer sometimes the best thing to do is to simply delete apps like Amazon or eBay to stop any random scrolling/searching. {If you’re desperate to buy something you can always log in through your browser}.
  • Set a pocket money budget: This is something a lot of people will leave out of their budget thinking the only way to save money is to not spend ANYTHING additional. Be realistic and give yourself some breathing space to buy a coffee/lunch/top.
  • Build money management into your daily/weekly/monthly routine: Try not to leave big gaps in between checking your bank balances and budget – the bigger the gap, the bigger the overwhelm and potential for getting off track.
  • Think “want, love, need” when making new purchases: Change your mentality to really consider purchases to help stop impluse buying.
  • Borrow not buy: Do you really need to buy that drill piece for a one off project or can you see if a neighbour has one? Need something for an event, see if a friend can lend it to you.
  • Don’t be afraid to say no to things which are outside your budget or finanical goals: Don’t cause yourself financial stress to make someone else happy and some people may even be relieved to have the suggestion of a cheap and cheerful catch up.
{I Love This Money Tracker from Fox and Moon}

Published by Ellie Hully

Business Health & Home

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