This episode of the Your Recipe for Financial Success podcast was published on 30th July 2020. You can listen again by heading to our Episodes page, or on your favourite podcast player.

In this episode, the team slice up and share their favourite budgeting tips, sprinkled with an anecdote or two. Which ideas are you going to pour into your mixing bowl?

 

Episode Highlights

 

Top 5 Budgeting Tips

  1. Put money into your savings account on the day you are paid, or just after.
    Putting money aside at the beginning of the month means you can’t accidentally spend the money you were supposed to save!
  2. Look back over your bank statements to see exactly where your money goes.
    What do all your transactions relate to and did you really need to make them all?
  3. Check your direct debits.
    If you have money going out monthly but you don’t know what it’s for, or if you are paying a subscription for something you no longer use, cancel them!
  4.  Set up a separate account for your bills.
    This is especially handy if you are living with your partner. You can both put money in for bills, rent and food whilst keeping your own money for personal bills and spending separate. Pay into your joint account when you get paid so you know the monthly outgoings are covered.
  5. Check to see if your bank account has a ‘save the change’ feature.
    Some accounts will allow you to round up your transactions to the nearest whole pound by saving the extra pennies.

So, money bakers, hopefully our 5 top tips for budgeting have given you a little food for thought. There could be an ingredient in there which you will take away and put into practice, or maybe you already put in to practice some of our ideas, in which case – good for you!

Bonus Tips

  • Take on the penny challenge.
    On day one you save 1p, on day two you save 2p on day three its 3p, day four is 4p, and so on, so forth. By the last day of the year you will save £3.65. If you stick to this pattern every day you should have £667.95 saved up – not bad, hey?
  • Don’t pay full price.
    If you are looking to buy yourself something new, try to avoid paying full price. Check for discount codes and use cashback websites when ordering online.
  • Save your coins.
    Fill a good old fashioned money box with coins and see how much it can hold.
  • Download apps like Emma, Yolt and Money Dashboard to keep track of your money.
    They are really useful for keeping tabs on your cash by seeing all of your accounts in one place, keeping on track with your savings and avoiding overdrafts, for example.

If you have any other tips or tricks for budgeting and saving you would like to share, why not head to our Facebook page and join the discussion?

 

Rediscover the conversation

 

Becky Campion 
So I’ve been looking through my bank statements and I don’t know about you ladies. But since lockdown started, I have saved a fortune.

 

Emma Knights
I agree completely

 

Julie Hunt 
Same here, well, I just don’t know where it’s all come from to be honest.

 

Becky Campion 
I’ve been thinking about all the things that I haven’t been able to do and I think that is what makes the difference. So just to name a few I haven’t been out to eat anywhere since March, which is a long time for me.

 

Julie Hunt
I went 18 weeks without a haircut so that was a that was a big increase as well I’ve not had my nails done either. No morning coffee on the way to work.

 

Emma Knights 
I’ve noticed that when normally when we’re out and about, we’re always stopping for a coffee so I’ve saved a lot there.

 

Julie Hunt
And lunches as well. I mean, I’m bringing my own lunch every day, which has meant I’ve not had to go out every day to get lunch so that’s made a difference.

 

Emma Knights
What have you been doing then with all this extra money? And obviously extra time? What have you actually been doing?

 

Becky Campion
Well, it sounds quite sad actually. But because I have had more time to spend at home I have actually had more time to have a look through my bank statements and credit card statements and actually have a look at how much money I do spend in a normal month when we’re not in lockdown against what I’ve spent since we have been in lockdown.

So, it’s been quite scary shall we say, to see just how much money I spend every month.

So, you’re going to be impressed now, I actually did some research into lockdown, budgeting and saving thinking that we can’t be the only ones that have managed to do so well. And I actually found a statistic that says that the typical UK households are potentially spending up to 29% less since lockdown,

 

Julie Hunt 
That’s actually quite good news because even those were furloughed on 80% so earning 20% less that still leaves 9% there, that they are still hopefully saving.

 

Becky Campion
Exactly. I’ve come up with my top four tips, since we’ve been in lockdown to help save and budget moving forwards, which I thought we could share with you all today.

 

Julie Hunt
Oh, that sounds really good, Becky. So, what’s tip number one?

 

Becky Campion 
The first tip is save the day you’re paid or if that’s not possible, then just after.

So, this is something that I’m very good at doing already. I have to blow my own trumpet here. At Face to Face Finance, I get paid by the fifth working day of the month. I’ve got a direct debit set up to pay money from my current account to my savings account on the 10th of every month. So that means I would definitely have been paid by then. And it’s still at the start of the month after I’ve been paid. So that money’s gone straight out of my account. I don’t even have to think about it. I don’t have to remember to move that over manually because it’s gone every month without fail.

And the thought behind this, I think which is why it works well for me, is basically you don’t miss what you don’t have sitting in your current account. If you see that extra, say, hundred pounds in in your account, you might think “Oh, that’s a nice pair of trainers. I’ll have them because I’ve got that hundred pounds sitting there”. If you don’t have 100 pounds sitting in your account, guess what? You can’t have the trainers.

 

Julie Hunt 
Some sad looking faces there Becky when you’re looking round the shop.

 

Becky Campion 
I know. I know. By waiting until the end of the month can mean that the money that you were planning on saving is gone. Going back to the trainer analogy, you walked into the shop, saw the trainers, and you brought them and that means you didn’t save that money for that month.

 

Julie Hunt 
That sounds like a really good tip, Becky, I think that we all probably realise that we will live to our means.

When we first started out in our careers, and we were earning a lot less money we used to live to that to that. We didn’t have not enough money, we just managed as we were and as we earn more over the years, we then spend more. So we can afford to have a more expensive haircuts, have our nails done, go for a massage and go for cocktails with the girls and not be thinking oh, we need to go somewhere in happy hour. We can actually go and have nice drinks.

Definitely. It makes a lot of sense to make sure you’re getting that money out of your out of your way really.

 

Becky Campion 
Yeah, out of harm’s way, out of sight out of mind. So my next tip is to look back over your own bank statements. And I’m sure but I can’t be the only person that finds satisfaction in doing this.

 

Julie Hunt
I’m a bit concerned at what you get up to on the weekends Becky.

 

Becky Campion 
I have a wild life, Julie.

The reason that I’ve added this to my top tips is basically to scare yourself into saving. I looked at my March bank statement pre lockdown and compared it to my April post lock down bank statement. And I was shocked at how much money I saved. Just little transactions here and there, sort of almost like frittering money away on the odd coffee or a treat. A chocolate bar when I pop to the supermarket just because I was there and because I fancied it, but if I do that every time, I go shopping, then it all adds up over the space of a month.

 

Julie Hunt 
Certainly, those morning coffees. I mean, I’m not sure how much coffee costs for one of the high street chains, but it certainly would build up over time. If you’re not buying that not spending that money every morning.

 

Becky Campion 
Especially if you’re me and you have to have two or three every morning to get you going.

 

Julie Hunt 
Nine years of working with you, I should not ask you any questions before you’ve had your two morning coffees.

 

Becky Campion 
So, I think that the key thing as well when you’re looking for your bank statement, is to ask yourself what does that transaction relate to? What did I buy? And think did I actually really need that? So maybe you went and impulse bought a top in a sale, and it’s sat in your wardrobe since the day you bought it. Think, do I actually need to spend that money?

 

Julie Hunt 
Very valuable lesson there. I’m sure that Emma will agree. We’ve all got clothes in our wardrobe that have only ever seen one outing or have never seen an outing at all, or probably in your case Emma its shoes.

 

Emma Knights 
I’ve definitely got several dresses that I’ve bought for a special occasion and that special occasions never quite come.

 

Julie Hunt 
Becky, what’s our top tip number three?

 

Becky Campion 
My next tip sort of links back to my second tip, but it actually relates more to direct debits.

Check what direct debits you have set up for every month that go out every month. And if there’s some that you you’re subscribed up to, but you don’t know what they are, or perhaps you don’t use them, then cancel them. One thing that I’m awful at doing is signing up for a free trial of something and then forgetting to unsubscribe at the end of the trial. And then I get charged from my account for a year of something that I have no intention of using.

 

Julie Hunt 
I’ve been saying quite recently, actually, I did a similar exercise and I was paying for a book group where I got a book sent to me every sort of six weeks and I realised that I didn’t like any of the books that I was receiving. I did actually cancel my direct debit for that.

Another thing I think is with your apps on your phones. There’s lots of times where you suddenly think, hang about what’s that £6.99 come from? And it’s not always easy to find where you can control your subscriptions on your phone. So that’s a really good thing to go through every now and again. Look at what apps I bought and am I actually using them and do they add value to my life or can I just remove them and use the money for something else?

 

Becky Campion 
Exactly. It’s very therapeutic to save money without even realising you’re saving it.

 

Emma Knights 
The other one that I always forget about is PayPal reoccurring payments. I went through that the other day and there’s hundreds of things in there that I didn’t even realise were there that are authorised to take money at any time. So it’s really good to go through and cancel those too.

 

Becky Campion 
I didn’t actually know that was a thing. Perhaps you can show me on my PayPal account how to do that.

 

Julie Hunt
I’ve only started my first PayPal account last week because Becky got sick of me using hers so I’m hopefully I’m okay on that one.

 

Emma Knights
I’ll definitely show you that when we’re finished, I’ll show you where it is.

 

Becky Campion 
Thanks Emma.

 

Emma Knights
What’s your last tip then Becky?

 

Becky Campion
My last tip is, again, it’s something that I actually already do. And that’s to set up a separate bills account. So, like for your savings, set up a separate account for your bill money to go into. After you get paid every month, the money is taken out of your current account and it’s put into a separate account where it will only be used to pay your bills.

Maybe you can take your food shopping out of that money, but it is out of your current account and you know what that money is going to be used for.

 

Julie Hunt 
I guess that’d be quite good if you’re in a relationship like living with someone quite early on as well. It would be really good to be able to see that you’re both putting an equal amount of money towards, for example, rent and for bills.

 

Becky Campion
Exactly.

 

Julie Hunt
I’m guessing that’s where you started from before you got married, Becky is it?

 

Becky Campion 
Yes. Me and my husband now still do the same thing. We each get paid into our own current accounts. And then we move our own money into our joint bills account and then all of our household bills and expenses come out of that account. We still have our own money in our own current accounts.

 

Julie Hunt
I guess that means you can give Matt a surprise every now and again, without him knowing it’s come out of the bank account that way.

 

Becky Campion 
Yeah, if he’s been good.

And the money that I’ve got in my own current account, I know is my money and I am not going to have any unexpected utility bills coming out of my current account money because it will come out of the bills money.

Another reason that I like running our money that way is because it’s easy to keep track of a separate bills account and of all of the direct debits, again going back to direct debits, when utility providers like to add a sneaky little increase on what they’re charging you it’s easy to see “well, last week or last month even I paid £50 for my electric bill this month they’ve charged me £70 for my electricity bill” and then I can do some digging as to why that may be.

 

Julie Hunt
I bet they wish they hadn’t put the bill up after up after you’ve been on the phone to them?

 

Becky Campion
You wouldn’t believe it, they’re bleeding! And with the bill account as well, after all of our direct debits have come out any money that we have left in the account, we actually save it up.

So if we have months like we’ve had recently, where were we have been saving quite a lot, we’ve kept that money in the account. So perhaps in the future, we’ll put it towards something nice for the house or whatever we want to do with it so we’ve got the extra funds sitting there.

 

Julie Hunt 
That sounds like a really good plan.

 

Becky Campion 
Julie, I think you’re telling me the other day about how your Mum used to use a very similar system, but with envelopes?

 

Julie Hunt 
Yes back in the day where everyone got paid cash before all the money was going into bank accounts, Mum used to have a tin in the bedroom and in the tin was different envelopes each with something different written on. So, it might be like electricity, and it had like £3 pounds per week, water £2 a week.  I think there was a holiday envelope in there as well. So that was £3 per week. Each week when my Mum or my Dad got paid my Mum would take the money and put an amount in each envelope.

When the bills did come in, because back then they used to get quarterly bills or six-monthly bills it wasn’t like we’re now we have direct debits, which I think makes us so much more organised. But it could be a case of getting a six-month bill for the water and if you haven’t saved that money that could be quite a big lump out of your income.

I always remember the tin in the bedroom, it was black with gold and red square on the lid.

 

Becky Campion 
Excellent.

I’ve actually just thought of one final tip to add. I’m not sure if everyone else’s bank account has this, but mine has a thing called a ‘save the change’ feature. So each time I spend money on my debit card, when I go into my banking app on my phone, it will prompt me if the transaction wasn’t to a full round pound, to save the change and round that transaction up to a full pound that move the difference into a separate savings account.

 

Julie Hunt
That’s very clever

 

Emma Knights 
I’ve never heard of it, it is really clever.

 

Becky Campion 
It’s also quite addictive as well. To give you an example, say I brought a coffee, because that’s what we’ve been talking about, for £2.50 on my debit card. The next time I go into my app it will ask me if I want to save 50p which is the difference between the full pound and the £2.50 that I’ve spent into my separate savings account that I have.

 

Julie Hunt
I guess that adds up after a while as well. It reminds me a little bit of when I was younger and I had a part time job as well as my full-time job. I used to put that money aside for holidays, I thought that was quite a nice way of doing it. It was money that I wouldn’t have had normally and it would be nice to save that for something nice so I used to save it up for a holiday.

Which also reminds me of when the new £5 note came out Becky.

 

Becky Campion
Yes, indeed Julie, do you want to tell everyone what we did with the new £5 notes?

 

Julie Hunt
Ok. Becky and I decided that we would save the new £5 notes for a holiday. We agreed the last weekend in the January after they’ve come out was going to be holiday time. Becky was so excited we were going to go to New York. When we came to like the middle of December, we thought we should add up and see how much we’ve got. I called up my friend who’s a travel agent and said, we’ve got this much money. There’s four of us, can we get to New York? She sort of had to break it to us that probably with, well, less than £200 each that it wasn’t really going to happen. But we did manage a long weekend in Alicante, which was very pleasant.

 

Becky Campion
We did indeed, we even made it to Poland the following year.

 

Julie Hunt 
We did, so save up those £5 notes and we’ll see where we get to next year!

 

Becky Campion 
I was actually thinking about our £5 note trips, and I did again do some research into different fun ways of saving money without realising you’re saving money. I don’t know if either of you have heard of the 1p challenge?

 

Emma Knights 
No, what is it Becky?

 

Becky Campion 
Funnily enough, it involves saving pennies. You start by saving 1p each day. So on day one you save 1p, surprise, surprise, on the second day you save 2p and then so on. So day three is 3p, day four is 4p, and so on, so forth.

 

Julie Hunt 
So basically, over the year, you build up to saving £3.65 per day then?

 

Becky Campion
Exactly. Do you want to have a guess at how much you’d save over the whole year?

 

Julie Hunt  
Oh, blimey that’s a hard one, what do you think Emma?

 

Emma Knights 
I’m going to take a random guess. £450?

 

Julie Hunt 
I’ll go £520?

 

Becky Campion
You’re both wrong and it’s actually higher than both of you thought. It actually works out to be £667.95 in the year.

 

Julie Hunt
Well, that would work out towards pretty good holiday.

 

Becky Campion 
That almost would get me to New York, I think!

Another different way that I found to save, is basically to set yourself a mandate where you don’t pay full price for anything.

 

Emma Knights 
Well, how do you manage that?

 

Becky Campion 
So, you make a rule that if you’re going to treat yourself, you can only treat yourself if what you’re going to buy isn’t full price. Say you wanted to treat yourself to a new dress for going out. You could only buy the dress if it was in the sale, or you could get money off code for it.

 

Julie Hunt 
Wow, Emma how would you manage that? That seems a bit harsh for you.

 

Emma Knights 
I’m not sure how I feel about that one.

 

Becky Campion 
Sorry, Emma.

 

Julie Hunt 
But you’re right there’s lots of websites out there who do some really good bargains, and there’s lots of offers out there. We’ve just got to find them for Emma.

 

Becky Campion
I know my husband is a bit of a cashback website fiend. So, if he can save some pennies on the old cashback website then he’s logging in and doing that.

 

Emma Knights 
I must admit I have done it before where you type into a search engine, discount code for whatever you happen to be looking for. And it does often come up with lots of different discount codes. You sometimes have to try a few first, but they do work eventually.

 

Julie Hunt 
I’ve also found as well, if I’m looking at something on a website and I then get distracted and go away and then come back to it later. I then discover that they’ve emailed me with a discount code because I’ve been on their website or even put something in the basket once.

I remember a few years ago I was buying a birthday present for a friend got distracted, came back and it was almost like please buy our product, it has £10 off, so it was a bit of a win win then.

 

Becky Campion 
It’s a bit of the Big Brother thing. Everyone’s watching you.

 

Emma Knights
I’ve actually just thought of another way that I’m a little bit OCD about saving sometimes

 

Becky Campion 
Go on Emma, you can share your tips.

 

Emma Knights 
Now. I actually can’t physically spend the £2 coin anymore.

 

Becky Campion 
Go on….

 

Emma Knights 
I have one of those jars that you have to smash to get into. And I put all my £2 coins in the jar, and the jar I’ve got is meant to hold £1000 in total. I can’t spend them anymore. I just have to put them in the jar because I want to know if it’ll hold £1,000!

 

Becky Campion 
I was going to ask you how much have you saved so far but I guess you don’t know. Do you know?

 

Emma Knights
No, but it will be a nice surprise when I do get in there. It’s quite heavy now.

 

Julie Hunt 
My husband’s got his £2 coins in a jar as well. We’ll see who fills up their jar first to see what’s inside them!

 

Becky Campion 
There are actually some apps out there to help you keep track of your spending. If you’re technologically advanced, (I’m not sure if that’s the right phrase) there are some apps out there to help you keep track of what you’re spending.

Just to name a few, one of them is Emma. And it’s not the Emma that’s sitting right next to me. It’s an app called Emma!

 

Emma Knights 
I wish it was named after me.

 

Julie Hunt 
I’d just like to say that it’s a socially distanced ‘sit next to’ of course.

 

Becky Campion
Another one is called Yolt. And the other one that I found is called Money Dashboard. If you’re interested after listening to this episode, there are different methods other than those that we’ve mentioned to help you keep track of your spending.