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Monthly Archives: November 2014

Budgeting Score – September


As these posts are all going up with short gaps between, there’s not much pre-amble to go through.  So here’s the figures:

Essentials Lifestyle Savings
Target score: 50% 30% 20%
Actual score: 70.6% 30.5% -1.1%

Last month was pretty bad, but somehow I managed to make things worse.  The biggest event from this month was mine and my wife’s birthday, but while that made it more expensive than the typical month, it wasn’t responsible for making it as bad as it was.  In general I think the main cause was the same thing that’s been responsible for my bad months in the past, I stopped paying attention to my budget.  There’s definitely a theme here, and if I want to get my budgeting back on track and keep it there, then I’m going to need to make sure I’m always paying attention to what my bank balance is like and how much I have in each piggybank, even when other major events are going on around me.

Another problem if I’ve noticed from leaving my budgeting spreadsheets for too long is that it gets harder to figure out what some of the items on your bank statement are for.  For most of them it’s easy to thing out which budget group they belong to (food shopping, restaurants, etc) but a couple are a bit harder.  I’ve got one item that’s appeared twice in my statements from July through to October, and I’ve got idea what it’s for.  It’s got the town I live in as part of the name, so I know it’s somewhere local, but that’s as much as I can figure out.  Since it’s local I don’t think that it’s a result of someone stealing my details, but I’m going to have to keep a close eye on my account in the near future to see if I can figure it out.

September’s final score:

0/10 – Double Fail

Past scores:
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Posted by on November 26, 2014 in Budgeting, Self-Improvement

 

Budgeting score – August


As these posts are all going up with short gaps between, there’s not much pre-amble to go through.  So here’s the figures:

Essentials Lifestyle Savings
Target score: 50% 30% 20%
Actual score: 65.6% 33.2% 1.2%

Yeah, that’s looking pretty bad, especially compared to the success I had during the last couple of months.  As you’ll see in the upcoming posts, this is a trend that didn’t really go away until mid-October, which is when I finally got around to writing up these reports again.  Essentially what happened at the very start of August is I received some quite worrying news.  What the news was isn’t relevant any more, but what is important is what happened next.  As part of my reaction I spent some money on several things which seemed very important at the time, but I hadn’t budgeted for in any way.  At this point it seemed so important that I put my budget on the back-burner for a while so I could focus on this new task, which resulted in me not keeping an eye on my bank statement and not paying any attention at all to how much was left in my piggybanks.  In the end, I went back to my bad habits of spending almost every penny I earned.

Those things I bought ended up not being quite as important as they should have been, and while they weren’t bad purchases as such I didn’t approach them in the sort of rational mindset I should have done.  If I’d spent more time looking, I could have gotten some of these items for far less than I ended up paying for them.  One of these items was an exam with a fixed price that I couldn’t get cheaper anywhere, but did have a lot of studying that I hadn’t yet done, but I was determined to try to fit in while in the remaining time I had.  Unfortunately while you can make plans to study for X hours a day and cover a certain amount of material by certain dates, this doesn’t always work out.  In the end I came pretty close, but just fell short of the passing mark.  If I’d left this until I’d already studied a significant amount of the material I’d have had a more realistic idea of how long it would take and how ready I was, which would have ideally resulted in a passed exam, but could have also ended with me re-evaluating how likely I was to pass it and putting it off until a later date.  Definitely some hard lessons learnt here, and it’s unfortunate that they took my attention away from my budgeting to the point where it took me nearly 3 months before I started to get back on track.

August’s final score:

0/10 – Fail

Past scores:
 
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Posted by on November 19, 2014 in Budgeting, Self-Improvement

 

Budgeting score – July


This one’s going up ridiculously late.  It was mostly finished before August hit, but then some pretty big life events popped up at the very end of July, which took priority until late September.  At that point I had 2 months worth of budgeting spreadsheets to fill out, and 3 blog posts to write up, and so I pushed it back.  I eventually forced myself to get back on track with this in mid October, and now that I’ve sorted out the number crunching side of things I’m ready to get on with writing up the blog posts again.  I’m aiming for around 1 a week, which should let me all of them out before the end of the month.  So let’s start with July’s post:

Essentials Lifestyle Savings
Target score: 50% 30% 20%
Actual score: 63% 21.4% 15.6%

Slightly worse than last month, but not bad all things considered.  I only just climbed out of my overdraft though, so that’s one big milestone reached (hooray!).  Now begins the slow, hard process of continuing to stay out of it while I save up for a mortgage.

In my last post I mentioned that I’d talk a little about what I was going to do with my savings once I have them again, so let’s get into that.  Right now there seems to be 3 main options that are worth doing:

The first is a cash ISA, which offers slightly better interest rates than your standard savings account and doesn’t build up tax.  It’s not the best option, but barring the bank shutting down your money’s not at risk, and it’s easy enough to transfer money to and from without paying extra fees.

Secondly there’s the classic stocks and shares.  Over time these tend to have one of the highest rates of interest and are relatively stable, so long as we’re not hit by a recession…  If you’re handy enough with the numbers to do this yourself you can make a real killing, but for everyone else (like me) you can just put the money into a stocks and shares ISA.  The best bet here is to make sure you spread your money into a number of different options just in case, and even if you choose only low risk options you’ll still receive a higher interest rate than any other bank account out though.  They do carry some fees for investing and withdrawing your money, so it’s best to do this only for longterm savings.  If you take the ISA option it’s also tax free, which is another perk to consider.

The last option is relatively new and is called peer to peer lending.  Essentially you put your money into a pot to be loaned out to businesses and individuals, depending on who you choose to back with.  It sounds like a risky concept at a glance until you realise that this is exactly what happens with your money held in your bank account, you’re just not involved in the process unless it goes disastrously wrong.  Like the stocks and shares option, you can choose what level of risk you’re willing to take, but there’s far less fees involved.  Another difference is that your money’s not loaned out straight away, so if you suddenly drop a large amount of cash into this option you won’t start reaping the benefits until they find someone wanting to borrow that matches your preferences.  Right now this isn’t tax free, but as of next year you should be able to include any interest gained in your ISA.

Out of these options the stocks and shares seems to be the best long-term saving option, but the added costs doesn’t make it very worthwhile unless you’re investing a lot of money in it at a time.  Peer to peer lending sounds like a good alternative, but for now I’d like to take advantage of my ISA allowance.  So for the rest of this financial year I’m going to be putting money into my cash ISA, then when April starts closing in I’ll transfer it to either a stocks and shares ISA, or a peer to peer lending service depending on how it’s shaping up.

July’s final score:

7/10 – Not bad

Past scores:
 
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Posted by on November 4, 2014 in Budgeting, Self-Improvement