How to control personal spending: two-week update

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The regulated spending is going well. I have not crashed my budget nor ‘borrowed from tomorrow’, and there is always money in my pocket for trivial everyday purchases. The £4 daily limit makes it easy to say ‘no’ to even the smallest purchases because I know that if I don’t spend it then it will be still in my pocket tomorrow – a very important point!

However, I am becoming mindful of the need to plan ahead, even when dealing with these small amounts of money and trying to think just a few days ahead. If I know I am going to need, say, £20 to help someone celebrate their birthday with a few drinks then I need to make sure I save £4 a day for five days, which means no trivial purchases for five days. This is perfectly doable with a little effort but what happens when such things happen on impulse: birthday drinks are tomorrow, or the family decides they want fish and chips tonight? These unplanned-for expenses are impossible to fund on £4 a day without a few days’ warning. However, I am beginning to understand where the peaks are and wonder if a weekly budget might work better because it would allow for slightly larger spends but at the risk of blowing the budget – a double-edged sword perhaps.

I am determined to stick to with the current method for the rest of the month before deciding if any tweaks are needed. It doesn’t stop me thinking about possible changes, though. For example, instead of dividing my £120 into 30 x £4, I could put £60 aside for larger impulse spending (a slush fund), such as going to the pub or having fish and chips, and then divide the remaining £60 into 30 x £2. So that would be £2 in my pocket every day, but there would be this other amount of money for larger expenses. This slush fund would still be intended for monthly personal spending and so could be used for anything, or if unused then the remainder could be rolled over to the following month or used for something else, e.g. debt reduction. Hmmm, good idea.

Main points so far:

  • Spending is being regulated, i.e. no overspending so far
    (this is the most important thing)
  • Most days, £4 is more than enough
  • Some days, £4 is nowhere near enough and so planning is required, but this is not always possible so…
  • Consider putting half of monthly budget into a slush fund for larger spends and reduce daily amount to £2.

Trivialities:

  • Obtaining change in £1 or £2 coins is not always easy unless spending.
  • After a few days of not spending, pocket can get quite full of change. Need a system for changing coins into notes, but wary of adding complexity.

I will post a full report at the end of the month together with any changes I want to make for next month. Feel free to add your ideas and comments below. It would be good to hear from anyone who has successfully (or unsuccessfully!) tried something like this to limit their personal spending.

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