If you had mentioned the idea of doing a post about money on my blog just a couple of years ago, I probably would have laughed in your face. Me and T have never been overly careful with money. We lived month by month and had credit cards and store cards. A few years ago, just after we had Spike in fact, we started talking about saving for a house. But it seemed so unrealistic at the time. Managing money wasn’t even in our vocabulary!
Our situation when we started saving
Renting our house, paying off old debt and spending more than we made. They are all traps that get you into the situation where you can’t save for the things you care about. T had an old loan with a high interest. I had both a credit card and an overdraft. Paying the minimum off both each month. I also had store cards. Thankfully because I always met the terms set out on the agreements, I had a good credit rating. But the banks often see that as a reason to put your credit limits up, which tempts you to spend more on them.
As I started to look into saving, I wanted to be clear where my money was going each month. So I looked into ways I could work this out. I tried checking my accounts regularly but still couldn’t work out where my money was going. I had a decent job, and I knew my direct debits, but it seemed every month, my money was just disappearing. So I looked at apps that I could forecast the month with, and found MoneyWiz.
Forecasting with MoneyWiz 3
At the time MoneyWiz was on its 2nd version, MoneyWiz 2. The app was exactly what I needed. An easy way to input my account balances, schedule payments and even see into the future. It allowed me to see exactly how much money I had left after all my outgoings. So I wasn’t spending all my wages right at the start of the month and wondering where it had all gone by the start of week 3.
MoneyWiz is now on version 3, with MoneyWiz 4 on its way later this year. The app has honestly been a lifesaver for me. Its easy to monitor and with the paid for features of Moneywiz 3 you can actually get the app to sync with the information from your bank. Meaning you don’t even have to manually input transactions! You can categorise everything so that you can see where your money is being spent too. I love it because I can track everything and cut back on spending in certain areas if needed. I can also pull reports over a time period to see whats going on with all my accounts. Managing money has never been easier for us.
Realising my debt
When I started using MoneyWiz, I instantly saw that so much of my money was being fed into paying off debt. I didn’t think I had much, but I soon realised I did. Not only did I have store cards, a credit card and an overdraft, I had two phone bills (one for my phone and another for my network plan), car payment, car insurance and road tax. Amongst other things that I can’t even remember now.
Tackling my debt slowly
Once I saw all of these outgoings spread into my month on the MoneyWiz app, I could see where most of my money went. I quickly looked at the actual debts (the cards and overdrafts) and the interest on them. I worked out which had the highest and prioritised that one. It happened to be the store cards, followed by the overdraft. Thankfully there wasn’t loads on the store cards so a month or so of paying the minimum on my credit card and overdraft cleared those. Then I worked on the overdraft, again while paying the minimum off my credit card. Whilst doing this I also swapped banks. I chose one that offered a reward scheme on its current account and a better interest rate on its credit card. Then I started paying off the credit card.
I have been able to stay out of too much debt with pure willpower since I made these changes. I knew that I wanted to be debt free within 3 years. Also, I knew that I wanted to start saving properly for a house. I figured this was the way to clear everything and have enough to save. With a 3 year plan ahead I had the willpower not to go on a spending spree. I removed the option for an overdraft on my current account. And my credit card limit was reduced right down. It’s there for emergencies only now. I also use it for items I want security on payment wise, but only when I know that I have enough in my current account to pay it straight away.
Managing money by seeing into the future…
MoneyWiz 3 has helped me forecast so much that I have got into the habit of ignoring my current account balance. If I want to buy something I open MoneyWiz 3, not my banking app. I also don’t look at today’s balance. I look at the balance I will have on the 20th of the month in the calendar area. This shows me my ‘leftover’ balance. After every planned outgoing. With that in mind I know how much I have to spend and I can see how long it is til the 20th. I use the 20th as my forecast date as T gets paid on the 21st and puts money in my account for certain things that do still go out through the month. Managing money in this way has stopped me overspending in a huge way.
Ways to start saving
If you are looking to make changes and start saving I definitely recommend forecasting your spend. Start by putting your wage into an app like MoneyWiz 3, then your forced outgoings. These are the ones you can’t go without not paying. Then put in your chosen outgoings. Remember to factor in things like money to get to work, either petrol or public transport costs. Then factor in any other money that isn’t necessarily set up, but you would like to spend. I have my hoop classes set up as, although I choose to re-enrol every 5 weeks, I don’t want to miss the opportunity to re-enrol. Once you have any idea of your outgoings and you can see what you’ve got left at the end of the moth factor in your savings. Set these up as an outgoing too.
Only save what you can afford
Remember to save what you can afford. If you have £120 left over each month, don’t set it up to save the whole amount. You will want a coffee one day when you are out in town. Or want to take the kids somewhere a little more exciting than the local play area. Make a ‘fun money’ pot to pay for things like this which is separate from your savings. Set realistic goals when setting out managing money and they will be easier to stick to.
Don’t forget the date…
You also have to consider what one off spends you will have each month and factor them into your forecast. If May is a big birthday month for you like it is us, schedule a payment for the start of the month for the amount you want to spend on gifts. Or even better, schedule a savings pot transfer for a few months before May and have an allocated amount in your pot for May’s birthday presents already.
Save the Change
Another thing that has helped me is the Save the Change option from my bank. The bank I swapped to a year or so back offers this, but so do many others now. Its the chance to round your transactions up to the next pound. If I buy something that costs £12.56, then the bank automatically transfers 44p to my savings account. Its only small amounts, but they add up and I never really miss them. I signed up for this last June and I’ve saved over £105 by doing it. It might not sound a lot, but its money that otherwise I wouldn’t have saved at all.
Stop living month by month
Once you have set up your savings, think about what they are for. Also consider what big things my come up between now and the end goal which might make you dip into those savings. I have a savings account set up for our trip to Mexico next year. But between setting that up and the payment date for the holiday, I had two Christmases, Spike’s birthday, T’s birthday and more in between. I knew these would be high cost events and set up the pots early to factor them in. Once you do this, you will discover that a lot of your spends are already factored in and you will in fact have money left over each month. Budgeting and forecasting is the key to managing money.
Disclaimer: This post was sponsored by MoneyWiz. However all thoughts and opinions are my own. There are other money management/forecasting apps out there but I personally use MoneyWiz 3.