Money Management

[Allen]

I'm about to move into a flat on my own for the first time. I have pretty much worked out that it will be viable (income - outgoings = a positive number), however it's gonna be pretty tight. This means I need to budget.

What do you do to manage your finances? Do you use something like MS Money (if it still even exists, not sure) or Excel with your own special spreadsheet? Do you just write stuff down, or work it out on your head and somehow stick to it? How do you do it?

I would like to use something on the PC, and since I used to do tech support for Quicken I may have a few legal copies lying around somewhere still so could maybe use that, but it's been a long time since I touched an application like this, so am looking for ideas from my "techie" friends.

[LWA]

Hey chief,
Firstly great news, it'll be great for you to have your own place.

As for budgeting I use Microsoft Excel to manage my finances - a single column showing the monthly incomings (+ve) and outgoings (-ve). After I've put my salary in and took off all my utilities, rent etc shows how much is left.

Also can I recommend you get yourself set up for on line banking (if you haven't already). It makes it really easy to keep track of money going in and out of your accounts.

I did use Microsoft Money but I found it a little over complicated for my needs.

[peterb]

+1 for excel. You don't need to log every outgoing - most of your running expenses will be by direct debit and if you get on monthly payment plans for all the utilities, you can predict your monthly outgoings. So one column for each item you are recording/tracking, and one row per month. You know what your monthly income will be, so you just run it ahead for (say) 12 months and see what is left over. Then every month you enter wht your actually earned, and what the actual residual money was, and it updates the following months. So just two entries each month - update predicted income with actual income and predicted bank balance with actual bank balance.

I also used the output from my spreadshee(ts) to demonstrate to a mortgage lender that I would be able to afford the repayments on the loan I was after, although it was outside their normal lending criteria.

I used a similar system with great success a few years ago when tmycircumstances changed. (Got to the stage where I was logging utility meter readings every week so I could influence my power bills and make mre accurate predictions for mymonthly payments.)

However you do it, keep it simple. Too complex and you won't use it. The hardest bit is setting it up with the budget values and deciding when you are going to update it - especially if you get paid at the end of the month.

[Salazaar]

I tried setting a budget, turns out I'm not very good at sticking to it. So I got a new job instead

[santa claus]

+2 for excel. I'd also include a column for expenditure you're committed to but which hasn't yet left your bank account. No nasty surprises then. For all sorts of reasons, a running record of your spending patterns is very useful so well done you for realising that a home of your own comes with financial responsibility.

Enjoy your new flat.

[redddraggon]

I do it all in my head, but then I aim to have a far larger incoming than regular outgoings, which means I don't have to budget down to the £

[1stRaven]

Microsoft Money for me. You can import downloaded files on your online banking (I use HSBC which offer this function - I guess the others do), amend certain monthly direct debit amounts if you know its going to be a high month and it tells you exactly what amount you have each month left.

[rox0r]

Microsoft Money is dead, they stopped selling it in 2009 and after next year it'll no longer support downloading data from/to your bank. It'll still work as a money management program but it has no support whatsoever any more.

[Zak33]

one thing that's worth having, is a small saving's pot. Leave it graphically displayed by your PC so you can see how well you're doing and to remind you why you go to work

If you're having a mortgage, make overpayments when you can (if you're allowed with no penalty) and note those too, as those will save you THOUSANDS of pounds in the long term and it's good to see.

[chuckskull]

Congrats on your flat.

For most stuff, I'm still pretty old fashioned and use cash. For my DD's I have a spreadsheet, got sick of forgetting when they were going out and paying the overdraft fee. I'm worse with dates than money.

A few tips garnered from my own mistakes, on my first go round;

Don't live out of the chippy/local shop, make your own food and do a 'proper' shop, you'll save a fortune.

EASY ON THE BOOZE.

The little stuff builds up faster than you can imagine, so careful on the treats whether it's pop and sweets or sky etc. Whether it's 50p or £20 a month it suddenly seems lot a whole lot of money when you haven't got it. Bear this in mind when it comes to credit too. That's probably one of the easiest traps to fall into. If you can save for it rather than get credit, do it, patience is interest free.

EASY ON THE BOOZE.

Don't spend it, just because it's there, try not to be running down to £0.00 before each payday, ideally, try and have a little more money left at the end of each month, even if it's only £5-10 each time. Eventually you will drop the ball or something will break, and if it happens when you have no money it will drop you right in it. Some emergency funds will save you a world of stress and usually some money too. Also a good reason to keep a few packets of super noodles and tins in.

EASY ON THE BOOZE.

Having your finances properly organised has value in it's own right, as peterb pointed out and for a variety of other things, including your own sanity(seriously). So follow through on this thread it will be worth the hassle.

I know I made a big thing of the booze, but trust me the desire to party will be strong, just be sensible, alcohol can take your money so fast you'll end up stumbling around confused, angry and dribbling. The effect is so profound, many still believe these symptoms are something to do with chemical intoxication... pssh.

[jimbouk]

I'm about to move into a flat on my own for the first time. I have pretty much worked out that it will be viable (income - outgoings = a positive number), however it's gonna be pretty tight. This means I need to budget.

Exactly the same situation in about 6 weeks probably (starting to view places next week). I use a simple open office spreadsheet. Looks a little bit like this:

Thing | Weekly amount | Monthly amount | Annual amount

The two other amounts are calculated from what you know. Gives you a good break down of the different time periods.

As for spending money, I'm hoping to work on a pocket money scheme. £20 a week out the bank in cash and try and cap it at that. It'll get you a reasonable meal out (without wine mind) or a few beers and a pizza or similar. Hopefully this will limit the unnecessary spending whilst still allowing some fun.

[tiggerai]

I use a Google spreadsheet (then it's available wherever I am)

I've got
Date of DD | Thing | Amount August | Amount Sept | Amount oct | etc

minus my salary and I know what I'm left with.

I've got a big piggy bank for all my shrapnel (have a purse / pocket clearout) and also a "Pound pot" for any £1 and £2 coins - this is good for emergencies - like ordering pizza and having no cash!

I try and work on a "pocket money" scheme but I'm too dependent on my cards.

[Steve]

I use GNUCash, but that's useful for tax returns and such. I think in your situation I'd go with the excel option. I used excel when I was a student to manage all the bills for the house. I paid them all, and kept track of what people owed me. It meant that I never lost track of what was owed to me, which can be easy when four other people are involved.

[Lee H]

All this type of financial planning all goes out the window once you've got kids, I can vouch for that

[scaryjim]

There's a lot of great advice here, but I'm going to echo something chuckskull said as perhaps being the most important:

Don't live out of the chippy/local shop, make your own food and do a 'proper' shop, you'll save a fortune.

People underestimate how much money they spend on food. Just imagine, you're in a hurry in the morning, so instead of making some sandwiches to take to work you buy something from the local shop. That's at least: £2 for a sarnie, 50p for some crisps, maybe 60p for chocolate and £1.20 for a bottle of drink. Ooops, £4.30 gone in seconds. Do that once a week and it's £20 out of your budget every month. Do it twice a week.... well, you get the message I'm sure.

Plan your meals. You can spend half the amount when you do a weekly shop if you know what you're planning to buy rather than just wandering around putting interesting things in your trolley. Shop around. Farmfoods is currently the place to go for bread - you can get two Hovis sliced loaves for a pound, which is incredibly cheap. So don't just buy everything in the one supermarket - learn which local shops are best for which products.

I'm also going to take another chance to pimp the very helpful http://www.cheap-family-recipes.org.uk/. While (I assume) you're not a family, the menus there are designed to feed a family of four on only £100 a month, and the advice they give is applicable to everyone, even if you're living as a family of one! You should easily be able to adapt their recipes for smaller numbers - or make the full amounts and then freeze several portions for reheating later.


Sorry, I know that's a bit off the advice topic you were specifically after, but I think it's by far the most important thing for anyone living on their own for the first time. As to technological solutions, don't forget that just keeping a note of what money you are spending doesn't actually help you not spend it! You may have it written down that you've got £200 a month for food, but knowing that you've spent it all in 3 weeks won't actually put food on the table for that last week So working out how much money you can spend and are spending is great, but carefully planning what the money will be spent on is even better

[Kata]

All this type of financial planning all goes out the window once you've got kids, I can vouch for that

So, add a few quid to the budget for condoms