Early last year my wife and I realised something. We realised that the growing sense of unease and stress we were both feeling was mainly to do with money.
There were a few problems:
- Neither of us knew what was in our accounts at any time.
- Our money was running out way before the end of the month.
- As a result of the above, we were always dipping into savings to pay for the last couple of weeks’ worth of essentials.
- No savings
- Large non-monthly expenses such as MOTs, Kids birthdays, Christmas were hitting us hard.
- Lastly, and this is a biggie, communication about money was non-existent.
There came a point in June last year where we decided that this state of affairs had to stop. We just couldn’t carry on living like that. It was far too stressful.
First thing we did was to get all the cards on the table. We got our laptops and logged into our separate bank accounts so we could both see the situation. No more secrets. No more ‘I don’t want to worry her/him’. Everything from now on out in the open. Just this first step is a massive release of stress.
Next step was to work out what we had coming in each month and what needed to go out. I fired up excel and started adding things in like salary, family credit, bills, mortgage, food, petrol, etc, etc, etc. It became obvious that the Direct Debit things like mortgage were ok because they went out first of the month, but things like the food budget was disappearing because it wasn’t protected in any way. It was just part of the ‘what’s left after bills’ amount. This meant that throughout the month it would be chipped away at for all sorts of other things leaving it low or empty for those last couple of food shops.
So, we took action to protect the food budget. We worked out what the total food budget for the month would be and as soon as we’re paid, we would take that out as cash and split it into each week. The relief of knowing *for sure* that there is money for each week’s shopping is immense.
After deciding that the food shop ‘ring-fencing’ (ugh!) was a good idea I took on the other thing that tended to run out: petrol money. So again, I worked out what my budget for the month would be and then I would take it out as cash and split it into each fill up. Sorted. Stress removed. As an aside, what this part also achieved was highlighting to me the cost of the petrol which in turn has made me think about ways to reduce said cost. Like working from home a couple of days a week, and (this is the main one), driving within the speed limit / more defensively.
So, by talking about money and carefully planning what we are going to spend and protecting that money, we managed to bring our monthly finances back under control.
But, it’s by no means finished, as eagle eyed readers may well have spotted that these solutions don’t address the one-off big expenses such as car stuff (MOT, tax etc) and Christmas. That’s for the next post.
UPDATE: Part 2 here