I have always been quite good with money. I always knew how to save up for things that I wanted and how much I could realistically do with the amount of money that I had. So, that being said, I have never been overdrawn or not been able to pay my bills, so today I thought that I would share my tips and explain what I do with my money as I think that it is a topic that not many people really like to bring up, even though it is an important one.
Differentiating between wants and needs
This has been something that I have done mostly in the last few years as I have had a lot more to pay for myself so I had to take a step back and look at what I was paying for each month and whether it was actually needed or not.
Obviously I need things like toothpaste, wipes and deodorant, however the newest perfume or mascara I could probably live without until I had a bit of extra money saved up. This point has helped me to reduce the amount of money that I spent on unnecessary things that I did not actually need at that time.
Birthdays/Christmas
I create my wish lists for Birthdays and Christmas throughout the year as I am always spotting things that I would like (things that I want), which I do not have enough disposable income for at the time that I see it. When this happens, I will add it to my wish list which my friends and family can then look at for present ideas. This means that I am easy to buy for as there are always plenty of things to choose from, and I get the things that I want and haven't actually needed to buy them myself.
Wish Lists
As I just explained, I am always adding to my wish lists due to the fact that I know I don't need that perfume or pair of jeans at that specific time, however I know that I want it so will wait until I can afford it or I will give friends and family the idea for my Birthday or Christmas.
I create these wish lists on my phone, Amazon account and on Pinterest. Amazon and Pinterest are very easy to use as you have direct links to the products. I like to use my notes app on my phone for on-the-go as I am always spotting things that I like the look of when I am out.
My lists are so varied. They aren't always full of expensive items as at the moment I have products ranging from Lush bath bombs to a new laptop. They are just things that I don't need to have right now, so my wish lists are really a way to keep me organised and help me to set goals for my savings.
Budgeting
This is the most important and definitely the most helpful thing for me when it comes to managing my money. All it takes is about an hour to go through your last bank statement and list all of the things that you have to pay for each month so that you can see how much you have left over for yourself. This is called your disposable income; money that is solely for you to enjoy and live on until the next time that you get paid.
I use my Boxclever Press Life Book as it has a dedicated section each month to budgeting. All I do is write my monthly salary at the top, then go through my bank statement to see everything that I have to pay for (phone bill, car, spotify subscription, housekeeping etc) and at the bottom I will have my final figure. I can then decide how much I want to put away in savings depending on what I am doing that month.
I opened a savings account with my bank so that I could put the money aside that I wanted to save to make sure I didn't accidentally dip into it. Saving requires a lot of self-discipline as you need to be able to put this money aside and not touch it until you have reached the goal that you set, so if you think that you would be tempted by the extra money sitting in the easily-accessible savings account, then I would suggest looking into an ISA or something that would not be as easy to get into.
After completing my budgeting pages, I split my final amount (which varies each month depending on what I am doing) and transfer the money that I want to save into my separate account, leaving my actual disposable income for that month. This is the money that I can use to go to the cinema, get takeaways, buy a morning coffee etc. I can enjoy this as I know that all of my expenses are sorted and I have put some money away for other important things.
Bottom Drawer
As this post is about making your money go further, I thought I would include this tip as I think it is a useful one and it will really pay off for me when I am older.
The idea of a 'bottom drawer' is basically to buy things in preparation for when you move out. This term has been around a long time and I don't think it always meant exactly this, but the term has stuck regardless.
About a year ago, I made a huge list of everything that I would need for when I moved out; from cutlery to a toilet brush. Ever since then, me and my Mum have been setting aside a bit of money each month to buy a few things off of that list to put in storage for when the day comes.
Although not everyone does this, I think it will come in really handy for when I do leave home as I will already have everything that I need and I won't be stressing out trying to work out how I am going to afford everything.
So, that is how I manage my money on a monthly basis. Some months are always worse than others (especially September for me as that is when my MOT, service and insurance are due haha); but preparing throughout the year and keeping on top of my spending ensures that I am covered for those grey periods.
This does not mean that I don't enjoy my money. I go on holidays, trips, nights out, shopping sprees and all of those things; I just prepare and make sure that I am covered.
I am definitely no money expert but this is what works for me and maybe one of my points has caught your eye as well.
xx