I have always had a finances spreadsheet, as far back as I can remember, but since being on my own I have paid much closer attention to my finances – even more so now that I have left behind a £32k job to work as a care assistant on alternate weeks and to try (no, sorry, not try, to be a writer on the other weeks). I am lucky that I received some redundancy money which has enabled me to be ahead of the game by 2 months (although not sure how long it will stay that way). I can’t be complacent though and currently my money goes on bills and essentials and NOTHING ELSE. Apart from the odd bottle of wine, but I’m even trying to cut that back a bit.
So how do I manage my finances? Let’s start with the monthly stuff. Even though I’m now being paid weekly, I still manage my finances as if I was paid monthly. Most bills come out monthly so I see no reason to change things.
I have a spreadsheet – you can see a template I put together and download a copy – where I list every monthly expense. Most of these amounts stay the same each month, but sometimes they change. I just put in something and when it comes out if its different I just change it. This is what my spreadsheet looks like:
So I have my income at the top, and then I list each monthly outgoing underneath that. As you can see, I have included everything. I also budget for food and general spending money. More on that later. At the beginning of the month, I copy the last month’s sheet or the template sheet and rename it with the current month (actually I usually plan a couple of months ahead so currently I have March, which we’re currently in, and I also have April’s.
As bills come into my bank account, I place a little x in the “come out” column to indicate that it’s been paid. The column to the right of the x’s has a formula in it so that when there is an “x” in the column, the value in the next column goes to zero. This helps me work out what my current versus projected balance is.
At the bottom of the monthly bills section, there is a Total in the purple row, and underneath that, is a figure for what is left.
As you can see below, underneath the usual monthly bills, there is another section called “Spending Plan for this month”. This section is for anything else. It might be a book I’ve bought on Amazon or I might have put some money away into a savings account for a holiday, but if it comes out of my bank account, it goes in that section. Again, it has the same system with the “x” to indicate if it has come out of my account yet.
At the bottom of the Spending Plan bit, there is a total (just for this section) and then under that is the balance (this is income minus both Monthly bills and the Spending Plan (extras) so this is a final total of what I have left after everything.
Finally (we’re nearly done for the monthly stuff), underneath the projected total amount left, there are some other figures. The one I have highlighted in Green shows the balance as it should be (in my bank account – assuming I’ve put an “x” next to everything that has come out of my bank account). The yellow figure is where I type in what my ACTUAL bank balance is (I don’t always bother to do this if the green figure is correct). If there is a difference, the pink highlighted figure will tell me how far out I am. So if that figure was £8 and I know I bought something for £8 but forgot to add it in, that helps me see where I’m going wrong.
Clear as mud probably.
Budgetting for Adhoc Expenses and Food
You may have noticed (if you were looking carefully – I’ll be testing you at the end of this post…. only kidding) that I have an amount for both FOOD MONEY and SPENDING MONEY in the bills section.
I budget £185 per month for food and household items. I transfer this money into a separate savings account at the beginning of each month and then at the beginning of every week, I take out a week’s worth of food money. I do basically the same thing for my “spending” money. I have two compartments in my purse and the cash is kept separate. I check how much money I have in each before I go shopping for food or anything else and I make sure I stick to my budget. I DO NOT EVER use my debit card for random stuff. It always comes out of the cash I have allocated in my purse. I shop in Tesco most of the time (although occasionally I go to Lidl) and I always use the Scan As You Shop scanners so I can tell how much I’ve spent as I go around the shop. The “Spending money” is for anything that isn’t food. This could be for coffees, sweets for the kids, drinks on a night out, anything really.
While food money is a set amount each month, Spending Money varies from month to month, depending on how many days there are in a month. The reason for this is that the spending money is based on a daily rate. To the right of my spreadsheet there is a section for this.
As I’ve said already, I get paid weekly at the moment, but I still act like I’m paid monthly. So each month, when I set up my spreadsheet, I input the day I supposedly get paid (this month 25th February) and the last day of that period – so the day BEFORE I next get paid (24th March). Then the spreadsheet automatically calculates how many days there are in the month.
Under that I enter what my daily spending budget is (it is currently set at £4.50 per day as this gives me approximately £30 per week). Under the daily spending bit, you can see I have Week 1, 2, etc. This is all calculated automatically. So once I have entered in the dates at the top, I don’t need to do anything else. And the weekly spending is calculated. As you can see, if there are only 2 days in the week, my weekly allowance will be lower. This month, as there are 28 days in the month, my spending money for the month is £126. This value is then fed into the Monthly Bills section to the left.
The weekly food budget is also calculated for me based on £185 per month. The reason there are two amounts for food – a budget and an actual – is so that I have a rounded number to go by each week.
Enough on that I think. I don’t want to bore you silly, if I haven’t already.
There is also more on the weekly spending and food money – a place where I can enter what I have taken out of the account each week. Here is what it looks like, but I won’t go into it too much.
There is another aspect to how I manage my finances (sorry if it seems complicated – it works for me) and that is Saving!
As I said, I have the money for March (which is in my current account at the moment) and April (in a savings account marked “April”).
I am saving for my bills every month, but I also save up for things I know which are going to be due, but may only be due once a year or once every 6 months.
These are part of my monthly outgoings, but instead of paying the bill (I can’t pay it until it’s due) I put them in a savings account. I think I must have over 10 different savings accounts, all named after whatever it is I’m saving up for. Some of those things are:
- Ground rent, management charge and landlord’s buildings insurance – all costs related to my flat. Some are 6 monthly, some are yearly.
- Medication. I know it probably seems silly to save up for a prescription charge, but I know I will need to renew my prescription every 2 months and I’d rather not get into the position where I forget about it and then I am £16 down on what I thought I should have.
- Petrol. This is a monthly cost, obviously, but I don’t know how much petrol I’m going to use. So I currently put aside a set amount into a savings account and then when I buy petrol, I quickly go on my phone and transfer the money that I’ve just spent on my card, out of the savings account and into my current account.
So now I’m saving up for paying my bills in May (or on 25th April). So what I’m doing is this:
I have a savings account called “May”. I chuck in there any money I get from my care work. I have another savings account for my child benefit and tax credits. I try to only spend that on the children but if it comes down to it and I have to use that money to pay the bills, so be it.
I have a My Rewards account with Nat West. It costs me £3 per month but I make over that in rewards so it is worth my while.
And I have a jar in the kitchen where I put money from selling stuff on Facebook.
Another thing I do to try to save money is: at the end of the week, on a Sunday or Monday morning, when I know I won’t be going out or buying anything else for that week, I go through my purse and have a look what I have left. Any notes or pound coins get thrown in the jar. In fact any money. I leave myself enough coins in my purse to pay for parking.
I have another sheet for all this in my spreadsheet (of course you do, I hear you say) which looks like this:
The total shows me how much I have, the orange bit shows me how much I still need. I’m currently about half way there.
I think I will leave it there for now. I may write another post on finances at some point, assuming I haven’t bored all my readers to death.
If you found this interesting, or deathly boring, do let me know in the comments.