|The wonders of keeping a spending diary.|
My top tip if you want to spend less?
Write it down.
It really is that simple.
Somehow, seeing everything I spend written down in stark black and white makes me much more aware of every purchase, and whether it's worth it.
I first kept a spending diary years ago, when I was working as an au pair in Paris and living on the princely sum of £150 a month.
Scrap the tiny violins though, because it was actually more money to fritter away than I had subsequently as a student, surviving on grants and loans.
The bonus with being an au pair was that the family covered my accommodation, household bills, any meals eaten with them and a travel card.
However, anything else - clothes, books, toiletries, eating out, presents, travel apart from the Metro and buses and any form of social life - had to come out of the £150.
Writing down what I spent helped stop me ending up with too much month and not enough money.
Nowadays, our budget may be bigger, but a spending diary is still a real help with living on less.
So if you started the New Year needing to make your money stretch further, I recommend keeping a spending diary.
And ideally, a spending diary that captures all the the extras and day-to-day drains on your wallet.
The money for non-uniform day / Comic Relief / school trips / sponsorship for one-eyed rabbits running the marathon. The sneaky sandwich or chocolate or coffee or pester power treat that raises morale on a dismal day. The mega-expensive milk from the corner shop when you ran out. All those small purchases that add up to a big black hole of "where on earth did that go?" when you see a £50 cash withdrawal on your bank statement.
Usually, the starting point of any advice about saving money is to suggest that you draw up a budget. Yeah, great. If I knew what I spent, I probably wouldn't need to be making a budget. It's normally fairly easy to see what's coming in, and some of the biggest bills going out, but that leaves a whole world of "other".
So, I suggest a spending diary as a solution, and here are my top 10 tips on what works for me:
1. Give it a whirl.
Don't feel you've shackled yourself to obsessively tracking your spending for ever and ever.
Try it for a month - that's long enough to give you an idea of all the small spending that is zapping your cash.
If you can face keeping it up for longer, you'll capture the less frequent payments like insurance renewals, household repairs and trips to the dentist/hairdresser/optician.
2. Pen and paper are fine...
Don't worry about downloading fancy budgeting software or grappling with apps, unless that really floats your boat.
The important part is to track what you're spending, so jotting it down in a notebook is just fine.
3. ...but spreadsheets are better.
Personally, I love spreadsheets, which remains a source of amusement to my nearest and dearest.
What's not to like about the ability to sum cells, play with percentages, insert extra columns or rows where you've forgotten stuff, and search for items? Maybe best not answer that.
Anyway, I use Excel to keep my spending diary, which is easy for me as I'm usually near my laptop. Anyone with a fancy phone (ie not me) might find that works better for them.
4. Little and often.
A spending diary is much more manageable if you keep it updated every day. That keeps it quick, and there's much more chance of remembering what you spent when, rather than making it a big task that you put off.
5. Pay with plastic.
I know some people prefer to stick with cash if their budget is really tight. Personally, I use cards to pay for as much as possible, so my statement provides a handy record of what got spent where.
6. Ask for receipts.
If the amount is so small I feel embarrassed offering a credit card, I try to grit my teeth and ask for a receipt. And then put it in my wallet, so it doesn't get lost. And then turf out the receipts when I get home, and make sure I've added them to the spending diary.
7. Check your cash.
Every few days, see whether the cash left in your purse matches the cash you reckon you've spent. This tends to throw up the extra impulse purchases I've done my best to ignore.
8. Check your statements.
Jotting down your purchases and adding amounts from any receipts goes a long way, but won't capture all your spending. I also check our bank and credit card statements against the spending diary, and add in the direct debits and internet purchases.
9. Get your partner on board.
If you share the spending with a husband / wife / partner / high-spending dog, there's not much point in accounting for every penny of your own purchases if your other half is flashing the cash like it's going out of fashion.
My husband doesn't track every Mars bar at the petrol station, but he is willing to use the card on our joint account for as many payments as possible, ask for receipts and pass them on, and keep cash withdrawals to a minimum.
10. Think about it.
If you've gone to all the effort of keeping a spending diary, see what it tells you. How much do all the small purchases add up? What else could you do with the money? If you scrapped the takeaway coffee, took packed lunches to work, and cancelled the unused gym / pay TV/ phone insurance direct debit, would that make a big dent in your debt, or add up to enough for a holiday?
Anyone else prepared to admit to keeping a spending diary, or are you just shaking your head thinking "this woman is completely mad"?
If you tried a spending diary, did you find it helpful, or reckon life is too short to be faffing around with receipts?