Saturday, 23 May 2015

When does a simple routine become more complicated to the point of being obsessive?

Hi peeps.
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.

Hi Ilona,
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.
Thank you.

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.

16 comments:

  1. Long time reader, first rime to comment . I agree with everything you continue to say. I have an age pension and a small emergency fund. A credit card for absolute emergencies.
    I'm 68 and after many years of work and raising three sons on my own into wonderful men I own my own home. I've travelled the world because I've worked,saved hard and paid cash for any holidays I've had. I have always kept a hard copy of my budget and like you have kept a record of accounts to refer to. If you are feeling overwhelmed by a complicated budget simplify . I understand it's not always easy if you have a partner who's not on the same page. But at some stage reality has to set in. From when my children were very young once a week we would sit and have a family meeting and discuss wants and needs. Believe me they are stronger men because they could not always have their wants.

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  2. Anon, I understand your need to simplify your finances. I'm with you on the fact it can be complicated.

    I have one credit card I carry in my wallet and one credit card I leave at home and use mostly for online shopping. When my wallet was stolen last year I was glad I had that second credit card at home.

    I have my rewards cards on my key ring. When I get a voucher or coupon for $ off anything, something like $2 off any item, I keep it in my wallet and try to use it as soon as possible.

    I do a spreadsheet of my spending by category and I agree it is a pain, so I may give it up.

    I do not think you are "obsessive" with trying to be as budget conscious as possible.

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  3. I'm like you Ilona. I try to keep it as simple as possible. One current account, one savings account. I don't have a credit card or any loyalty cards. I can't be doing with the hassle. I usually use cash to pay with. Anything I spend on my card gets checked off in my notebook. It might be crazy to some people but the only debt I have is my mortgage and I've never gone overdrawn. Much to the annoyance of people trying to get me to claim for bank charges. X

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  4. The more you buy, the more complicated things get (ie checking building society statements to see if the figures are right/wrong/gone out on correct or incorrect day. I buy very little. My sole income is less than £100 per week. I have nothing "on tick". I look after everything I have and so don't need to buy much. I have no washing machine/dryer or mobile phone. Would I like these? Yes, I would like a washing machine but I am 53 now and reckon that I will never have one. I have an old box file and drop everything in - they are kept in all the same place. No tricky computer spreadsheets. My bills are super low and they are paid by a friend when he goes into town. No special journeys here! Natalie

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    1. Do you go to the laundry mat....or send to the dry cleaners (expensive here) or buy clothes that are easily hand washed? Just pondering how I could get by without a washing machine...even though mine is water and energy efficient!

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  5. You are brilliant. So helpful. A really good post. I haven't even got a credit card.Although I was asked if I'd like a chip and pin card when I was putting some money into my building society this week. I just said "No thanks". I suppose we will have to all have cards one day though. Till then give me the cash. My purchases never cost a lot. I usually buy second hand. So cash is better.

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  6. Great post. I too am overwhelmed by paperwork.Old statements and the like. Time to get the shredder going methinks.

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  7. Maybe I am incorrect, but when she asked about shopping rewards cards I thought she was talking about the cards that give you discounts and earn points at particular stores, not store credit cards. At least here in the US it is necessary to have the store loyalty card if you want the best price, even if you pay cash. You earn points, also, or $ off anything vouchers (coupons). People who shop at a store regularly and don't sign up for the loyalty card are missing out big time.

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    Replies
    1. That's how I read it as well. Up here in Canada, we have them for the supermarkets, drug stores, pet stores, bookstores. You have to use them to get the lower prices.

      We don't get the price reductions on food that Ilona and other UK based bloggers get. Lucky to see 30% thee days.

      Don't even start me on banks. Pay $2/month to get a paper statement. They honestly make it very complicated to change direct deposits once they are up and running. The husband's pensions go into one bank, my pay goes into another. Credit unions give better interest rates for retirement savings plans.

      We just can't win.

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  8. Makes interesting reading. I try to keep things simple too but was only talking the other day about getting rid of most of my reward/loyalty cards which I lug around in my giant purse!! The total number of these is 10!! As I don't stick to one supermarket I don't really reap any rewards from one certain one. I think I am going to just do it and go back to my tiny purse which will make things a lot easier. (Mrs LH)

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  9. Hello.Great advice on a very interesting topic.We use paper statements, no online financial transactions,and a file box for both documents and revolving bill payment accounts etc.I like to read a statement that records all the monthly transactions.We keep old records for seven years in storage containers.The household accounts are taken care of generally once a month, so really no complicated fussy procedures. I'm the one who does it.I know what comes in and out by opening our mail on the day we get it and attend to it right away.No procrastinating allowed by me.I think if we complicate things it can get overwhelming, so a simple,regular, way works best for us.I always know what's going in, out, and account balance.It's more serene for me that way.So I control it,it doesn't control me.I would like to say that being debt and mortgage free makes this whole process much less painful than it used to be-seriously-used to dread it before.We learned from our foolish financial mistakes, though, thank goodness, and turned it all around to a better way of living.That's how I came upon your blog and am so glad I did.It's a gem.Regards,D.

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  10. KISS (keep it simple silly) is great advice. Listen to Illona, don't spend a lot. That is cheaper than trying to save the last percent, especially if it requires to jump through hoops. Dare to go bare! Good luck anon, don't be afraid.

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  11. Good post Ilona, you speak a lot of sense.
    I empathise with anon, I too think as you get older, its good to have things as simple as possible. I have no need to buy possessions now, I have everything I would ever need. I suppose if the washing machine or fridge broke down, I would get a new/secondhand one if they could not be repaired. My goal is to be as minimal as possible. Everyday I strive to that end.
    Take care, have a great weekend everyone, it is a Memorial Day holiday weekend here in the states. In my part of Texas it is going to rain the whole time.
    Pam in TX.xx

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  12. In Germany, you have to give a direct debit mandate for some payments, e. g. car taxes, water, and electricity. All the other payments I make the old fashioned way by filling out a form. I have one credit card I use maybe once a month. During the last weeks, there was a lot in the media about Denmark, where only about ten percent of all payments are made in cash and they plan to get rid of cash completely. Of course, there are some "experts" here who say that we should do this, too.
    Hilde

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  13. For everyday shopping and budgeting I have several small tins in a cupboard for receipts; groceries, clothes, petrol and misc. Every month I write the total in a little note book. Its like a challenge to get it just a little cheaper each month. It also means I'm keeping track of what I am spending. I clip the receipts together and write a running tally on the back of one. I know if I am spending too much and need to stop. At the end of the year I do an average monthly spend for each category to see if I have done well or need to cut back. I'm a bit nerdy with money. Lol. Debbie.

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