From time to time I get emails asking for tips and advice. I try my best to come up with a constructive reply, but be aware that I don't know everything. I am not Superwoman, I just do my best with the life I have been given. An email dropped in my box this week.
I hope you don't mind me asking for some advice.
I seem to complicate things with a lot of paperwork re. our finances and bank accounts, vouchers, shopping rewards cards etc., do you keep reward cards? We use credit cards for rewards and pay off every month so we don't pay interest. Its not budgeting I need help with, its just a simpler way of doing things. As we get older I'm so overwhelmed now with things. I use a budget software and categorize everything which I want to stop doing! Can you give me any tips please.
Hi Anon. I do have your name but I will not reveal, thanks for contacting me. At first glance you seem to have a lot going on regarding your finances. It will be difficult to make comparisons between how you manage your money and how I manage mine, because of the differences in incomings and outgoings. Maybe it would be a good idea to highlight these differences. I have a state pension and a small top up pension, no savings except for a small emergency fund, that's it. You may have more incomings from different places, stocks, shares, investments, savings. My whole lifestyle is very simple, you may have more going on in yours. Your spending will be different to mine, your priorities will be different. I have no commitments other than to provide for my pets, you may have other family members involved which can complicate things.
You say 'bank accounts plural, I'm wondering how many you do have, and what you use them for? I have one account which everything goes through. I get a statement in the post which I can check. I have minimum direct debits, I never get more than one page because there is not much activity going on there. I withdraw cash from the machine inside the bank as and when I need it, £50 or £100, more if I am going on holiday. I have no problem with cash in my purse, because I have a strong discipline that I don't make impulse purchases. It will be two, three, or four weeks before I need to get some more out.
You ask about shopping rewards cards, I assume you mean store cards. I don't have any, why would I need them. Most of the purchases I make are in shops which don't have cards. You have to remember that store/loyalty cards are only dished out to entice the customer to spend more. I know how much I want to spend, and where I want to spend it, a card is not going to make me spend more. Dump those which you haven't used for a while and never go in their shops again, it makes life more simpler.
I have one credit card, that's all I need. Years ago I used to juggle a few cards with 0% interest, purely to fund large purchases. It worked for me at the time, but as the statements were cleared I cut up the cards and cancelled the contracts. My one credit card earns me points, not many because my spending is controlled. I use it for convenience, mainly for petrol and food shopping, and of course it is cleared every month. I'm wondering how many credit cards you have? And why do you need more than one? How many statements do you get every month? If you are juggling several, can you use just one card, keeping it all in one place? On my one monthly statement I usually have only three or four lines on it at most.
Vouchers. I assume you mean money off vouchers. I know there has been a lot in the press, and some bloggers are really keen on couponing, to the extreme in some cases. I use very few of the vouchers I receive. You have to remember that vouchers are given to encourage you to spend more. If I forget to use a voucher before the date expires, I say, so what, I didn't need it anyway.
A lot of people find budget software a useful tool for keeping track of things. I haven't tried any, I don't need to. It would be like adding an extra layer to my simple way of checking my finances, and would entail sitting in front of the computer longer than I already do. No thanks, I am not a number cruncher. All I need to know is that my pension is going into the bank every week, the few cheques I write are cashed, the withdrawals I make from the machine are entered on the statement, and the two monthly direct debits have gone out.
I used to keep a spending diary when things were really tight, when my income was so low I had to account for every penny to make sure there was enough to pay the mortgage, utilities and council tax. I was sailing close to the wind at times, but my bank balance never dropped below the bottom line. The spending diary I had was a note book, took a couple of minutes to enter figures when I came back from shopping with the receipts.
I have never needed to use a budget software to keep track. I see that as over complicating matters. I keep pieces of paper in different folders in date order. Once checked they are put away and forgot about. I only get them out if I need to go back to something a few months or even a year before, if some query arises and I need to verify something I have the statements.
So, Anon, are there two people in your house? You say, 'as we get older I'm so overwhelmed with things'. Does this mean that all the finances are left up to you? Is that a job you willingly do, or is it that your partner does not want to be involved? Are you perhaps becoming a little bit obsessed with keeping things tidy and in little boxes? Everything in it's place? I'm wondering if this is a reflection of how you tackle your housework, your appointments diary, and your social life? Are you a person who needs to scrutinize every little detail about your life? Of course I am only surmising I only have your short email to go on. But I'm wondering if your complicated paperwork system is part of a bigger picture.
You say, 'categorizing everything which I want to stop doing'. Not sure what you mean by that. I think you have missed a comma out there. You maybe want to stop categorizing. Ok, try this.
You need to declutter your paper/software systems. Give them a good clear out, only hang on to the information you need. Again it's down to 'needs' and 'wants'. Once you have a good understanding in your head of where your money is coming from and how it is spent, and that your budgeting is under control, you can begin to relax a little. I don't need to account for every penny now, my diary is redundant, because I trust myself not to go bananas and spend willynilly.
If you are confident with your budgeting, try letting go of the reigns a little bit. Get rid of cards which you are not using, cut it right down to one or two. The points and rewards you accrue though using them are so piddlingly small it's not worth the hassle of keeping them.
Vouchers. Sort them out as soon as they come into your hands. Do not hang on to any that you definitely won't use, or those that you might use. Chances are that you will forget and they will be out of date. Bin them straight away, banish them from your house. You have more important things to think about rather than rushing off to Tesco to get 10p off a pack of frozen peas. I get the £3 and £4 off a £30 shop at Tesco. I only ever use the £4 off one, the rest get binned.
Close down your budget software, delete it. I know everyone is trying to get their customers on paperless billing, but I love it, and will not change. I have box files, the bills are checked and bills filed. Put away in a box where I don't have to look at them. If you have to stick with your computerized system, and you are confident that you are not overspending, only check things to make sure your cards have not been cloned or your account has not been hacked into.
Personally I am very careful where I give my credit card details. I don't have any financial information on my computer. No internet shopping, no paying bills on line, no banking online. I take great care where I withdraw cash, only at a machine inside a bank, never outside.
Phew, I think I've covered most points. If there is anything more to ask dear Anon, please email me again. It's sunny outside, it's a Saturday morning, and I'm going to get off my backside and get out there.
I hope you have a lovely weekend, whatever you are doing.
Tattybyes and Toodle pip.
PS. Please be aware that if you are reading seconds after I have published, what you see might not be the finished article. I always edit after I publish. Thanks for your patience.
PPS. I've just looked at the title of this post again. I am obsessively simple, ha ha.
5 hours ago