Last week Friday marked the beginning of the new financial year and for those of us in the UK, the introduction of the incumbent government’s ‘austerity’ plans for our economy – changes that will radically affect our way of life. I had planned to blog about these changes but this evening came across a recent video from one of my favourite YouTuber, Shirley of Meek n’ Mild(Blog) / Shirleybeniang (YouTube) called “...my finances & My top 5 Budgeting Tips” and thought that it was a sign.
Check out the ever wise Shirley and her approach to her finances.
I am a regular viewer of YouTube and avid readers of blogs; over the last eighteen months I have noticed an increasing trend for people to post ‘hauls’ and without throwing any shade, I am often astounded at the sheer volume of items particular people purchase. Now I do not claim to know the financial affairs of anyone (and nor do I wish to), but a quick check this evening and I have found at least three different vlogger(s) /blogger(s) over the last month who have posted goods I calculated at totalling well over £220 each on items. Now I’m sure these ladies can afford these goods but Shirley’s video got me thinking about a particular phenomena I keep coming across, 'I see it, therefore I want it’ or for those of us born pre 1990, ‘keeping up with the Joneses’.
We are constantly bombarded by adverting on different platforms of TV and magazines, we are now entering a world where our searches are logged and adverts on the internet (Google plus, Facebook) / Supermarket (Tesco’s club card, Boots Advantage card) are tailored to our perceived preferences. No longer content with selling us products; companies now sell us ideas of how our lifestyle should be, creating particular brands and associated tribes. Whilst I could blog all day on the psychology behind this and this disturbing, emerging phenomenon, I accept that for today’s consumer being able to ‘live within one’s means’ is no easy feat and so have complied a few points below that I hope will help.
When I was a university I got a great big overdraft and developed a habit for all things DKNY / Jimmy Choo (they were the brands of the moment). My room in halls became known as the yellow room as it was always covered with the distinctive yellow Selfridges bags as Oxford ST was a hop skip and a flash of my Oyster card away. I never had cash on me and swiped my cards (yes cards – plural) so hard that I had to order replacements every six months. I battered them – hard! So please understand me when I write that living within one’s means for many is not easy. It’s not. I should also confess at this point that I came from a household where my parents didn’t mess with credit and as a working-class first generation child, I should have known better. I strongly feel I got caught up in the hype of being an ‘adult’ away from home and lost myself to the world of shopping, raving and flossing. Things got so bad that in my final year of uni I used to go ‘shopping’ back home, raiding my mother’s fridge and cupboards for food with my Waitrose plastic bags to keep up appearances. So please take what I have written as advice from a friend, not someone looking down on anyone as I am not that way inclined (and apologises if you feel that I am). I merely wish to save someone else from the mess I got myself in.
That dreaded B word............. (Budgeting)
Budgeting isn’t hard. If you think about it, we all budget on some level – ultimately, when it’s gone, it’s gone. What I am referring to is setting an amount and sticking to it.
1. Know how much you have coming in (Income)
Know what date each payment hits your account and where from, just in case things go wrong).
2. Know how much is going out (Expenditure / debtors)
The amount; the day it leaves your account and the name of the organisation it goes to. As I said in my comment on Shirley’s video, in the UK everyone’s primary concern is their rent / mortgage and Council Tax. I cannot stress enough that what ever happens these two bills MUST be paid before all others. I cannot sleep until I have paid my rent and don’t F*** with the Council. Non payment of council tax can (and often does) can land you before a magistrate who in turn can issue you with a County Court Judgement (CCJ), prison stay and with a criminal record– it’s taken that seriously. The Council will often send in bailiffs and trust me, having a grown person come through your front door / window (they are legally allowed to enter through any open point) to take away your TV or tow away your car can never look good to the neighbours.
All other bills should be listed next; using your last three bank statements should help you see who takes money and when monies are deposited into your account.
3. Set an amount
A weekly budget is often the easiest. Find out how much your net (the amount that is physically paid into your account after tax and other deductions) each month and add it up so that is appears weekly. I tend to follow the Citizen’s advice Bureau (CAB) method as it was the first method I actually understood.
Monthly amounts (Salary / Benefits) X 12 (the mount of months in a year) then divide this by the 52 weeks of the year.
If I wrote it as a formula it would look like this:
(Net Monthly amount X 12)
----------------------------------------- = weekly budget amount
52 (No. of weeks in a year)
Once you have this you can then divide it further by seven to find out how much you have each day. Don’t worry if you’re not a maths wiz, a simple search on the internet will reveal a range of sites that have free software that will help you. If this doesn’t work for you, don’t worry, the most important (initial) outcome is you find out the total of what comes in and what goes out.
4. Stick to it / Cash is King
Get your bank to set up a standing order to pay bills each week or month. Contact companies to change direct debit dates to when you get paid or to spread payments throughout the month –what ever is easiest for you. I know it’s easier said than done, but keep trying. If all else fails, take out cash and you will quickly slow down.
5. Get YouTube / Bloggers to work for you
If I see a product I usually investigate it first before deciding to make a purchase. I will read reviews, check out videos and if possible, look in store before making a commitment. It has taken me a while to get to this point, but after much training, I am Zen. It helps that I’m not an avid follower of a particular beauty brand.
6. Expensive isn’t always best
Trust me, as someone who was raised in a household on Marks & Spencer’s, Clark shoes and C&A (really showing my age today) it has taken me a while to come to the realisation that expensive isn’t always the best. In this age of Primark and Supermarket clothing I know that there is always a tribute (copy) out there. That said, there are some exceptions to this.
7. Know your Level
There are some things I choose to splurge on and other I couldn’t care less. I have eczema and so will not mess with my body lotions. When I first started out wearing make up I refused to spend over £30 on foundation as I knew I wouldn’t wear it that much; but as a black women, I was fully aware that the colour choice wasn’t really there. I waited and saved up for my purchase and used every last drop of that bottle! When it comes to mascara’s I am proud to say that I have never spent more than £10 on one. Brands such as MaxFactor / Maybelline produce excellent ranges and I can change the tube each month without denting my account. (Check out Clumps of Mascara as Brittany’s blog really helped me).
That’s all for now.
I will no doubt add to my blog over the upcoming months but hopefully this has helped someone.
Check out the video see if you agree with Shirley’s approach.
I would love to know what your experiences have been.
* Without going into too much detail my day job involves working with people who are often fairly removed from traditional financial intuitions / products in the UK. I should like to state that I am not blogging as a financial adviser and so will not and do not provide advice to anyone on the state of their financial affairs.