Thursday, 29 December 2011

What will your New Year's Resolution be?

As the year draws to an end, it is natural to see the calendar shift as a time to change something in your life and make improvements.  If you would like 2012 to be a year where you get your debts under control, here are my two suggestions that are really working for me.

Number One:
I write down everything I spend in a pocket notebook, from the 50p chocolate bar, to the £800 mortgage payment.  And once a week I spend 5-10 minutes transferring those figures into a spreadsheet of spending (I do mine, first thing on a Monday morning).

The picture on the left shows my notebook in action.  I score off a section for each day's spending.  A great day for me, is now a no-spend day where I write nothing down in my book!

And you don't have to buy a notebook either.  I made mine using a piece of cardboard from an old box and decorated it with magazine clippings.  The pad inside is used printer paper and letter heads which were going to be recycled. I cut the paper to size, hole punched and tied it in with a ribbon fastening.  Total cost: £0.00.

I find that tallying my spending up each week into my spreadsheet is a very effective way of stopping the spending urge from taking over.  It gives the thrifty urge more of a chance to survive.  The harsh reality of the black and white figures makes that new pair of winter boots far less tempting!

I have a variety of columns, each with an annual,  monthly and weekly budget attached, which helps me quickly see how on target my spending is. 

Number Two:
Using my bank's smart phone app, I check my bank balance every morning, tracking direct debits and payments to ensure we don't go overdrawn.  Smart phone apps are much quicker than online banking to log into, meaning I can check my bank account in seconds.  It also saves any embarrasment at the supermarket tills!

And by the way, just in case you are wondering, I didn't buy my smart phone, I waited for my husband to get a free upgrade from his pay monthly deal and I got his old phone.  I just put in my old sim card and continued to top-up the phone with about £10 a month.  We have wifi at home, so I don't get any internet charges (I don't use this function when I am out and about), so it is just as cheap to run as my old phone!

Being in control of my money has really made a difference to how much I spend.  Ignorance may be blissful, but with money, it quickly comes back to bite you on the backside.  It is much better to be 100% knowledgable about how much money you have and where it is going.

There is really good advice on the Money Saving Expert website about setting up an effective budget, if you would like further information, take a peak there.

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