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Friday, November 20, 2009

How to conquer the pre-Christmas budgeting blues

Looking forward to a frugal Christmas?

Who said the world of budgeting could ever be simple? Who said it was an easy task to set your mind to and create good spending and savings habits? Well, actually, that person was me. I plead ‘guilty’ for saying this sort of thing in various articles, reviews and even in my cookery-on-a-budget book (which I saw going for 1 copper penny on Amazon the other week – I was both mortally offended, and highly pleased at the bargain price I subsequently paid for an extra copy).

The truth is, I have never found budgeting easy. Oh, I check my bank statement every day online, and I set up clever direct debit and standing order payments into various savings accounts, so that a little bit goes into my untouchable ISA and into my ‘rainy day’ cash account. So that’s a big tick. Yaay me.

I also make sure that, every month, I pay off a set amount of whatever’s outstanding on the mastercard – you know, the card that you only use ‘for holidays and pay it right back as soon as you get paid’. Which as we all know, is excellent advice and total rubbish. What a ‘for holidays’ mastercard actually means is, I’ve lost my bank card and this will do. Or, I’m going to get AirMiles if I use my mastercard in this store (regardless of the transaction charge I know I’ll get hit with or the high interest rates compared with my bank card).

What actually has happened the past month is that I’ve been shellacked by my own inability to budget and pay attention to anything.

For example, I have several cardinal rules to budgeting:

1) Bring food to the office, don’t buy.
For the past two weeks, I have forgotten each day to bring my lunch with me. I’ve left gorgeous home-made pies and pasta in the fridge, then not eaten when I’ve got home. This is because party season is upon us, and, while I’m scouring the room for canapés at various press parties, I forget that I’ve got a potential, and far healthier, dinner waiting for me next to the milk and cold meats. By the time I get home, it’s too late and I’m too full. And the next morning, I am too tired to remember to bring it in with me. Hence, I have spent a LOT of money on my card popping to prêt-a-minger or Make Mine.

2) Always remember to have some cash in your wallet
FAIL. Why use cash when taxi drivers take cards?

3) Always use public transport
But… the teeteringly high heels… the long nights partying with London’s financial elite… the rain… FAIL

4) Always pay off any online orders immediately
Stupidly, I saw a lot of craft material (cards and beads, not the witchy type) in a 24 Studio magazine, which would be great for the craft fair I am going to do. I estimated that the relatively low prices of these (cheaper than most craft stores) would mean the margins I would get on my products would be higher, and, consequently, the profit would be greater.

Epic fail: I did not read the small print, namely that I had to pay the balance in 14 days from receipt of the letter. I did not READ the letter, as I did not GET the letter until two days after the deadline had passed. Thank you, Post Office. Thus, what had been a £27 bill became a £47 bill – 100% interest in the form of a ‘Failure to pay’ fee. If I hadn’t paid it when I did, it would have gone up to £67.

Of course, in this case, I would advise you all to ring the provider immediately and explain the situation – the postal strike, the promise to pay the original amount at once by phone if they will waive the fee this time… but I’d actually read the letter in disgust, and, having come back from a late-night press party, thrown it down on the bookcase with a nonchalant ‘meh’ and only realised two weeks later that I’d better pay up, and fast.

5) Never admit that you struggle to budget
I have to admit that I’m actually usually very good with money. But there are times when budgeting just seems to go out of the window, and November-January are those times.

I guess my advice to anyone feeling a little blue about their excessive spending and insubstantial saving over these months is – ‘don’t feel guilty’. Guilt will make you feel hopeless about saving, and hopelessness will lead to budget fatigue and any efforts that you have made will go out of the window completely.

I suggest that you make a list of all the ‘extra’ things that you have spent over the three months – things you would not be spending on throughout the rest of the year. Add that all up, and think to yourself: “That’s my one-off spending for the year. It’s not a hole in my budget – it’s my additional expenses budget for these months! I planned this and I can manage it. I’m going to save that much during the other months next year and make myself feel better when Christmas 2010 comes around.”

Then treat yourself to another slab of organic turkey. You’ve earned it.


The Old Tarf said...

Hey, Organic Turkey,

Not you. Yummmmmmm . I best put my other foot in and say Yummmmm.

I mean organic turkey, free range and tasty.

Always pay your bills first then you can pay yourself.

Take cash with you so you do not use your card as much. Unless you are buying something nice for yours truly. Talk to you soon.


El-Kevo said...

You don't see one for ages and they all come along at once ! (bloggers)

I feel that attracting and keeping money is a gift as much as good looks, or personal magnetism.

I earn quite a lot but I'm always broke. It doesn't matter how much overtime I do or how careful I am.

And I wouldn't mind. I don't really spend a lot - certainly not on myself anyway.

It's your karma, Mermaid.

Donn said...

I am still reeling from watching a documentary called the Card Game. Our neighbour to the South allows credit card companies to do whatever the frig they want to..because America is all aboot having it all...
the unbridled lust for riches aka the creation of wealth, is the central ingredient of their manifest destiny which was set in motion by the creator of the universe in the 1600s.

I once felt bad about eating Turkey but I have since found out that they have the smallest brains in our galaxy. I actually know someone who inseminates them.

I figure that any creature which is too dumb to fornicate, deserves to be eaten.

Blue Eyes said...

Another blogger returns!