It’s been some time since i’ve written a post. In fact this is the first one this year. 2020 started off really well, and happily included a fabulous trip to New Zealand to see my wonder pal Jackie and her family. It was an amazing trip, full of happy memories and good times, and I am more than lucky to have been able to make the trip as planned this year.
Since then, well, as we all know, 2020 has turned into somewhat of a shitshow! Fires, storms, and now a global pandemic where the entire world is in lockdown and hundreds of thousands are dying from a virus that we still don’t know a whole hell of a lot about. Who would ever have thought we’d get to this point?! Happy days!
There’s nothing I can say about it really that hasn’t been said a million times already all over the internet, so I thought i’d reignite the blog by revisiting something that consumed a lot of my time over the last few years, and the importance if which has been fundamental to getting through this year relatively sane so far: managing my finances.
Last year, after a few years of starts & stops, I finally paid off all my credit card debt. I used to wake up in the night in a panic, worrying how the hell i’d ever get myself out of the debt-hole i’d dug myself into, and gain control over my finances. It took a lot of effort, a lot of saying ‘No thanks’ to invitations, holidays, nights out etc., but it was very much worth it. After i’d cleared the cards, I started saving some money, but in all honesty, most of my spare cash after bills etc. then went on to holidays. I paid in advance for all the holidays I had last year, and that included the trip to New Zealand & Kuala Lumpur that I had this year. I paid the flights on credit card, but then immediately paid those off with the money i’d saved for the expenses. So when I came back in February, I had nothing to pay off. On the other hand, I didn’t have much saved either, but that was the plan for this year.
I’ve been following a budget for the last 3 years, and it’s so consistent that before the end of 2019 i’d already written the entire budget not only for 2020 but also 2021. I have pretty much the same outgoings each month, so all i need to do is budget for the less regular payments such as car insurance, holidays, birthdays etc. etc., and that’s the budget done. I then check it regularly (okay, daily) and adjust for additional spends I need or want to make. Simple. Since the coronavirus nightmare kicked off, i’ve been soooo grateful to have a system that works, and to be in control of my finances. I’m lucky to have a job that pays well, and work for a company that is doing their best to look after their staff at the moment, because it’s a challenging economic environment for sure. So although I know i’m lucky to be in a situation where I still have an income, getting to the point where i’m financially free wasn’t luck, that was achieved through hard work and sacrificing immediate short-term wants and needs for long-term financial security. This year I had planned to save up a 3-6 month emergency fund which would be there just in case I lost my job and had to survive until I found another one. Never has that felt more important! So that’s all I’ve been doing since coming back from NZ. Managing the budget and saving everything that I can to build up that fund, because it was pretty much non existent at the start of the year. Living alone and being a single wage earner means I have to focus on how i’ll manage myself if it all goes Pete Tong.
While I don’t talk about my job in here (and that’s not about to start), I will say that I love my job and I’m really pleased to work for a company that is doing their best to look after the permanent staff at a time that the industry is in turmoil. However, as this global pandemic has shown us, you never know what’s around the corner, and it may get to the point I could lose my job. If so, I want to be in the best position I can to be able to survive until I can find more work. So to do that, i’ve been saving all spare cash as I said, but i’ve gone back to the frugal ways of living that I used when paying off debt. My spending habits are much improved now anyway, but i’ve been tightening the belt again. To that end, I thought i’d share some of the things i’ve been doing. None of this is rocket science, but it all makes a difference.
- if you’re not already, start saving. Even if it’s a fiver a week or a month, anything, just start saving. I thought I was the only person that didn’t save money and just spent it all like it was going out of style. However, it turns out I wasn’t alone, and a shit ton of people only save what’s left at the end of the month, if that. So save first, then worry about the rest of the money.
- If you think you haven’t got any spare money to save, create a budget, look after the main expenses – rent/mortgage, utilities, food, insurances etc. – and then go through all of the rest of your spend and see where you can cut back. Do you need multiple streaming services? Do you pay for subscriptions you no longer even read? What else do you buy regularly that you know you could do without. Even get rid of stuff for a month and if you really miss it, bring it back. Chances are you won’t, and you can save that fiver.
- I use different back accounts for different pots of money. All bills come out of my main account, I transfer money into a separate monthly spending account, and put money for petrol into another, savings into a fourth, and money for haircuts into a fifth. I’ve reduced the amount to petrol because I don’t need any right now, but I will eventually, so putting a small amount in each month. Same with haircuts (despite the fact of course I desperately need one!), I’m putting a tenner in a month which will add up for when they reopen.
- Use spare money that you’d normally spend on petrol or whatever other expense to pay off energy bills from the winter, or other outstanding expenses. My gas heating bill is really high in this flat, and I’d built up a deficit of about £160 (which I NEVER usually have), so I paid that off. Heating is off now, bills are thankfully low again, so that’s all good.
- Call up your mobile/broadband/TV package provider, you car/flat/house insurance providers and whoever else you can think of to see if they can offer you a better deal. It’s worth a shot. A few quid saved here and there adds up quickly.
- If you have any renewals coming in DO NOT just pay them without at least calling up the provider to get a discount, or check on comparisons sites to get the same product for less elsewhere.
- Spend the extra time at home decluttering and identifying items you no longer need for sale. Facebook marketplace, Gumtree, eBay etc. are still being used (subject to managing the transfer of goods safely) and it’s a good time to make a bit of extra cash on the stuff you don’t need.
- Plan your meals for the week ahead and shop only for those meals. Batch cooking saves time and money, and since we’re only supposed to go out for essentials, we’re less likely to be nipping to the shop to pick up bits and pieces, and suddenly spending £50 without thinking. I’m now shopping weekly, and it’s saving me a ton. It’s making me investigate new recipes, and be creative with leftovers. I’ve had some weird and wonderful concoctions lately, but i’ve greatly reduced my food waste, which was pretty low already, but i’m now realising was higher than it should have been.
- Don’t spend hours browsing Amazon or whatever other sites you like for shit you absolutely do not need, but you’re just buying to cheer yourself up. We’ve all been doing it, just aim to do it less. It’s so easy to spend a crazy amount of money without realising and all you’re doing is cluttering up your house with things you don’t really need.
- Look online for local small businesses that are doing veggie boxes or other groceries. Often they’re pretty cheap, they’ll deliver and it saves you battling the queues to get into supermarkets. I do this intermittently to support my local businesses when they have stock (they’re proving popular and sometimes sell out).
- Along with the budget, have a think about what you want to do when this is all over, and start some sinking funds to save up for whatever it is you want to do. Having something to look forward to helps mentally to get through the current situation (at least it does for me), so planning for it now, and squirrelling away little bits of cash for it when you can may help keep you sane (ish).
- If your bank lets your round up spend to the nearest £, collecting the excess in a savings account, think about doing that. I do this with my monthly spend account, and the pennies add up. In the last two months i’ve collected £38.46 without even noticing.
- As a last resort, looking at payment holidays, or speaking to banks about managing loan repayments etc. is something else to bear in mind. I still have a car payment (which may surprise some as I think of myself as debt free, even though the car is technically a debt), and thankfully can manage that at the moment with my salary, but i’d be straight on the phone to the company if that changed. If it all went tits up I could hand the car back, as i’m nearly at the point I either do that anyway, take out another lease or pay it off and keep it. My plan is to save the balance up and buy it at the end, but if I did lose my job i’d be handing the car back and paying the min. I needed to in order to do that. I’d do what I had to.
If anyone has any other hints of tips for managing your money during this crisis, let me know. It’s always good to hear how folk are managing. As I said, I know i’m lucky to be working still and have the ability to squirrel away money for the rainy days to come, so if you’re not in that place, and really struggling to make ends meet, my heart goes out to you. I think all we can do is do our best to get through this however we can, seek help when needed and not be too hard on ourselves when we don’t manage to get everything right.
Stay safe people.