budget Archives - My Debt Diary

Decorate for Christmas without Breaking the Bank

December 5, 2018

As someone who absolutely adores Christmas and everything that comes with it I completely understand the urge to go over board with decorations come December. As a result this can of course mean spending a lot of money, but it doesn’t have to. From affordable trees to simple touches that give your home a festive feel, here are ways to decorate for Christmas without breaking the bank.

Find an affordable tree

The centre of most homes at Christmas is the Christmas tree. There are two options when finding one of course, real or fake. Buying a real tree can often be the cheaper option however it will only last the month before needing to be thrown away. Fake trees, whilst not quite as realistic, can be stored away and kept for years to come. This is where it’s best to do a bit of research and figure out which is the best for you.

After taking a quick look around I have noticed that Home Bargains are selling real trees this year for £9.99. They may not be the bushiest, however they are a fantastic option if you are on a tight budget. You can also find very affordable artificial options in many shops and online. I’ve found this one on Amazon for just £19.99 and it is 6ft tall!

Add finishing touches to budget items

Often I’ll spot cheap wreaths and garlands in the shops which are a great price, but look a bit bare. There is such an easy trick to solve this. Instead of leaving it as is, buy a few extra finishing touches to add to your decorations that will really bring them to life.

As an example, last year I bought a plain wreath from a budget shop. I then purchased some pine cones, berries and ribbon at £1 each along with some wire. It only took me around twenty minutes to add these to the wreath, fluff out the foliage and then finish it with a bow. I had only spent around £10 in total, which was still a lot less than the more expensive shops were charging and now I have a beautiful wreath for my front door that I can use year after year.

You can do this with essentially any decorations and it makes such a difference. If you’re not naturally creative, have a quick nosey on places like Pinterest and Youtube. You can find some great ideas and “how to” tutorials.

Stick to a colour scheme

There are two big benefits to choosing one colour scheme that you love. Firstly, having one or two colours throughout all of your decorations will pull them together and really make your room or home look more full and complete. I always stick to green foliage with red and gold accents in the form of baubles, berries and lights. Many of the shops even do large sets of baubles like this one here which should be enough to cover an entire tree.

Secondly, if you stick with the same colours year after year you won’t have to buy new decorations each December. Having spent around £150 in 2017 on our decorations I was worried about our potential spends this year. In fact, we have only spent £6 on a couple of baubles from trips we have taken. If you look after your decorations well and store them properly throughout the rest of the year they will last you a long time.

Never underestimate the impact of a few candles

The flicker of a candle flame can have such a huge impact on a room. So much so that the Danes have a name for it; Hygge. A candle brings so much cosiness and, paired with a few simple decorations, can bring a real feeling of Christmas into your home. If you choose to opt for a scented candle, you will add that extra layer of warmth. My favourite has to be apple and cinnamon. Of course, some people prefer not to have an open flame in their home. In this case faux candles like these ones, paired with a room diffuser would give the same cosy effect.

Hang up your Christmas cards

Before decorating my own home for the first time last year I worried how I was going to fill one particularly blank space of wall in our living room. As our Christmas cards began to arrive however, it occurred to me that they would be the perfect solution. I found some twine that I had been using to wrap presents with and a couple of pins and strung them up in two rows. The room felt more and more complete as they dropped through the letterbox each day. As a bonus, I wasn’t getting annoyed with them all falling off the shelves and sideboard as I normally would!

Make your own

Last but not least, home crafting is another fantastic way to decorate without spending a lot of money. You might in fact have many of the things you need to decorate in your own back garden. Take a moment to go outside and see what you can forage. Sprigs of holly and berries could be added to a flower arrangement, whilst pine and conifer might be the perfect foliage to create a fireplace garland. Inside the home you might even have some spare paper to make paper chains, a simple but classic touch to add to your living room.

As I have mentioned before in my other Christmas posts, this is a wonderful time of year but it is not worth causing yourself financial problems over. There are always budget friendly solutions and often the items that we have worked on ourselves are the ones we hold on to most fondly for years to come.

What are Cash Envelopes?

November 5, 2018

You have heard me speak about budgeting many times before on My Debt Diary. Today I want to talk about one specific method. Whilst many people choose to set up and manage their budget digitally, myself included, cash envelopes are also a popular choice. But what are cash envelopes?

What are cash envelopes?

Put very simply they are envelopes with cash in. They are a physical form of a budget with each envelope holding a designated category. Most importantly they each hold a set amount of money. You may choose to use them for items such as shopping/groceries, petrol and takeaways for example. Everyone has their own priorities and their own expenses of course.

Each month you decide how much money you will allocate to each category. You withdraw the total amount you need from the bank and place the right amount in each envelope. You might choose to hold on to enough money for just a week or the whole month. Just choose the one that feels comfortable for you. To help keep things in order it’s important to mark the category on each envelope, so they don’t get mixed up.

There are two great benefits to using cash envelopes as your budgeting method. Firstly, handing over physical money makes you think more about your spending. You watch a certain amount leave your envelope and your remaining budget diminish. It forces you to consider whether a purchase is required or if you would rather save that money for something else.

Secondly, once the money is gone it is gone. Unlike using your bank account where everything is held together there is no chipping into other areas of the budget without actually taking money from another envelope. This highlights how quickly you use up certain areas of your budget. It can also help you to budget more accurately in the coming weeks and months as you gain a better grasp on your spending habits.

What’s better, if you have money left in your envelope at the end of the month it will feel incredible. Now you can make a choice. Do you spend more on your shopping that month? Do you put it in savings? If you have debt that is the obvious choice! Even if it is only £1.50 that is left, put it somewhere. If you follow me on Instagram you’ll know how much I believe in throwing even the smallest amounts at your debt total. The point is, taking control of your money like this will give you more choices.

The cash envelope system is a great method to use if you are new to budgeting or really struggle with limiting your spending online or with a bank card. Sometimes, in order to come to terms with a completely new way of handling your finances, a new way of spending can be the perfect approach.

How to save £100 on your heating bills!

September 3, 2018

Although Autumn does not officially begin until the end of the month the days are definitely cooling down. It was almost cold enough in my house to put the heating on the other day. It felt ridiculous considering the warm weather we’ve had this summer. I opted for a jumper instead, but there must be some other ways to keep my heating costs low! After doing some reading I have come up with some ideas that will help you to save £100 on your heating bills.

Turn your heating on in every room.

This first tip might seem a little bit backwards. Put heating on in ALL the rooms to keep costs down? Surely that will cost more! It actually helps your house to stay warm if you keep your heating on at a low level throughout instead of having it turned up high in just one space. Your home is insulated around the walls and the roof. Any heat within the house will dissipate through thinner walls anyway. Keeping your heating on lower for longer is more efficient on your heating bills than short blasts of high temperatures.

Use a timer.

This is something that many boilers have built in but you may need to purchase a remote timer for your boiler if you don’t already have one. Set your boiler to turn on at a time that suits your routine. Say you get up at 7am for example, have your boiler turn on at 6am for two hours so that your house is nice and toasty when you get up. If in the evenings you normally notice the house getting cold around 6, have your boiler set to come on again at 5 so that it helps to combat the heat loss.

The important thing is that you get to know your house and it’s cooling habits. Then you can adjust your timer to suit. It is said to be cheaper to heat your house on a low temperature for longer than to have your boiler on for a short time at a high temperature. In other words, having your thermostat at 3 for three hours is better than having it at 5 for two hours.

Close your curtains and blinds.

It might not seem possible to save much energy with a piece of fabric but closing your curtains and blinds can in fact make a big difference in your home. That small extra layer between your room and the outside cold will help to reduce heat loss. If you have thicker curtains, these will help you to keep the heat in even more. We have lovely thick ones in our living room that make all the difference in winter. It is not necessary to change your decor for this reason alone, but if you are planning to redecorate a room it might be a good idea to take this into consideration.

Try Bulb.

I’m excited about this one! I want to share Bulb with you for two reasons. Firstly, my fiance and I switched to them recently when we realised we could save a massive £177 per year. We had only switched to a new supplier a couple of months ago and wouldn’t normally bother looking into anything new so soon, but after doing a quick quote check we decided to go for it. The switch was done in a just couple of minutes online.

The second reason I’m excited to share Bulb with you is because on top of the saving you could potentially make I have a referral code that will give us both £50 if you choose to switch. We used a friends referral code and the £50 was credited to our count, saving us even more on our heating bills. That means a total of £227! I’m really chuffed with that. This is the referral code here where you can get your quote from Bulb quickly. If you do choose to use it, thank you!

You can of course then share your own referral code with friends and family. Bulb have written their own blog post explaining why this is a good idea. You can read it here.

Every penny counts for me right now as I try and pay off my debt as quickly as possible. Heating bills are of course only a small part of our outgoings each month, but every small amount that can be put towards becoming debt free is worth it. Of course old classics like putting on a jumper and cosy socks, or sitting with a blanket over my knees will always remain my firm favourites. I do love a cosy day in the house after all!

Beginning a Budget – When you have an irregular income

July 13, 2018

Two weeks ago I shared this post, You Need a Budget, and discussed the difficulties I was having as someone who has an irregular income. After some research and trial and error I have come up with a method that seems to be suiting me well. It is basic and very flexible as you will see, but it works. I imagine it will change over time but it is definitely a good start. These are my thoughts on beginning a budget.

Beginning a Budget

To get the ball rolling I did a lot of reading on different methods used by bloggers, authors and other financial advisers. For those of you who, like me, have an irregular income you will find that trial and error is the only way to discover what really works for you personally. You need an adjustable budget that shifts with good and bad months of income.

Some months will naturally pay better than others. This can make even the simple act of writing a standard income figure nearly impossible. A good place to start would be to find your income average from the last 12 months. This will give you a fair guideline amount to work with.

As a starting point, no matter your income type, I would highly recommend the Total Money Makeover by Dave Ramsey and more specifically his app called Every Dollar. This app allows you to set up your budget as well as keeping track of your baby steps. This is ideal if you’re on a debt free journey!

Tracking my Income

Most of my freelance clients pay within a couple of days to one week of an invoice being sent. It is therefore possible for me to plan for my income around one or two weeks in advance of payment. I simply keep a running note of work in progress or work due to arrive and an estimate of the payment date for that project. All of my invoices are stored in one place, meaning that I always have an idea of what’s due.

As an example, in one week I might invoice for three different projects which come to a total of £450. I know they will be paid into my account in three days time as this is the agreement with my client. This total is now an income value that I can use to handle my outgoings.

There is always a risk of payment problems and delays can happen. As I work with such a short window, numbers can rise and fall quickly. This is why I recommend having an emergency fund in place. If a bad month happens, I’m not in a panic.

My method of keeping track of my income is very basic and lacking in sophistication, but it seems to work.

Tracking my Outgoings

My budget is split into two types of outgoings that I need to keep track of. There are the set outgoings such as bills, my car insurance, my phone and my loan payments which are defined amounts withdrawn on certain dates. These don’t change and so they are straightforward to track.

I always have a note of these payments in my diary to ensure I never forget them. I also keep a note on my phone of the next payment due, which I update each time a payment is made. This is just an extra measure I take to make sure that I am always on top of things and nothing takes me by surprise.

Collectively, my personal set monthly outgoings come to just short of £450. As part of my budget strategy I therefore always keep £500 available in my account. This gives me piece of mind knowing that everything is covered. When some money goes to a bill and the total drops, I top it back up to £500.

For the not so regular outgoings, my approach is very simple. I think before I do. These outgoings are normally made up of things like nights at the pub, popping to the shops and trips home to Glasgow. Budgeting money for these is all about staying in control and planning ahead.

Take a trip home to Glasgow for example. I normally plan these a month or so in advance. I know that petrol for my drive normally comes to £60 for a round trip. This can be a lot of money when it has been a slow month. Planning ahead makes it manageable as I can prepare for it and set the money aside.

For the smaller things, I look at my expected income and upcoming payments and decide if I want to and more importantly NEED to spend that money. Would it be more sensible to keep it back for another day? If the answer is yes, that’s what I do.

Telling each penny where to go.

So where does everything else end up? This is the stage in a budget where many people falter. They know their outgoings are covered so what more is there to worry about? In fact, this is a key point that Dave Ramsey highlights over and over. If you don’t tell your money where to go it will disappear.

If you are looking to save, use this “extra money” to save, if you are looking to pay off debt this is where to place your focus!

Once my account reaches £500 I have to tell the rest of my income where to go. For me, a small amount goes to savings. Currently, at time of writing, I am building my emergency fund so this is my focus right now. When this is complete this money will go straight to debt payments. For this I will use the debt snowball method, which is a topic for another post.

I’m incredibly excited for the day when I can change my budget entirely, moving from debt payments to investment and savings. It’s a long way off at the moment but I will be sure to share that change with you when it happens!

Budgeting can be overwhelming when you are first beginning your financial journey. The best first step to take is to note down as much as you can and open your eyes to what is going on with your money. Where is it coming from and where is it all going?! When beginning a budget use a simple system that suits you to get started and make your way towards financial freedom!

You can find a fantastic in depth guide with more advice on writing a budget over on themoneyfreak.co.uk.

I’m taking part in the Monday Money linky with Lynn from Mrs Mummy Penny and Faith from Much More With Less

You Need a Budget

June 27, 2018

You need a budget!

It seems to be the start of so many plans, guides and books when it comes to getting rid of debt or living frugally. You need a budget. It makes sense to me, but I have one major hurdle. I’m self employed and don’t have a regular income.

As I shared in my welcome post here, my work is all freelance and my income varies dramatically from £500 some months to £2000 in others. This means that there are days when I’m going to be able to throw entire invoices at my debt and some where I’ll be scraping together the pennies just to make sure I have a tenner in my pocket.

How does a budget work?

From what I understand so far, the classic and most common way to use a budget is to begin by noting down your total household income for one month. You then note down all of the outgoings you expect to have. Mortgage or rent, bills, utilities, food shopping, travel expenses should all be included here. If you’re being very good you will note down every single possible spend down to the odd coffee you might pick up at the weekend.

The aim of writing everything down is to show you exactly where your money is going. This then allows you to adjust spending and of course reduce spending if necessary.

If you’re on a debt payment journey like I am you might adopt an even stricter approach. Dave Ramsey speaks about telling every single dollar (or pound) where to go. Your finishing balance should be £0 once you have completed your budget. This means that all outgoings are accounted for. The remainder of your money is then going straight into repayments on your debts.

It sounds so straight forward!

It really does sound straightforward. It’s a very simple and sensible method to begin to get your finances in order. I definitely know it in principle. It’s the application of it to my own form of income that I’m currently having difficulty with. My focus this week is to get all of my numbers into order and find a system that works for me. My income may be variable but my bills are always the same. That’s my starting point.

Take a deep breath. You need a budget, and it doesn’t have to be impossible to tackle.

For a fantastic, in-depth look at what to do next jump over to Managing Your Monthly Budget by Sue Foster