This post was in response to a Facebook question on how much we’ve saved since starting rationing and how we do it…
Living frugally since December 2011/ January 2012 has saved us nearly £3000 so far. As we have drastically reduced our food consumption… or rather food waste… we can now save 30%- 40% of our weekly income in an online saver. Allot of banks now have an online banking facility. We bank with Lloyds TSB and opened up 3 online savers (free of charge and takes less than a minute to set up).
Heres what we’ve set up so far…
- Currant account – money goes (weekly), bills go out (monthly by Direct debit… all on the 1st of the month)…. MrC and I both have a Debit card for this account BUT… its used rarely as working with cash really DOES give you a better idea of exactly what you’re spending and how often you’re letting it go.
- The holiday saver – this does what it says on the tin… we save 30-40% of each weeks income in here for our holiday next year (august 2013)… this money IS NOT TOUCHED and is only accessible via the internet (i.e. moving it into the current account) or over the counter at our local bank.
- The bills account – technically it’s an online saver like the holiday account…. But hang on this is where we get crafty, in a logical sort of way. We sat down and worked out how much we need to pay out each month (rounded up) in bills (not groceries… utilities, TV, internet, landline, mobile phones, rent, council tax etc). We divided this into weekly payments we make from our currant account to the ‘bills saver’ account EVERY WEEK WITHOUT FAIL. Soooo… this UNTOUCHED amount of money sits there as the weeks roll on (direct debit) and on the last day of the month, magically moves (via internet banking transfer) into the current account so that the direct debit bills can come out the next day. This is a foolproof way of making sure we ALWAYS have enough to pay the bills… and so we are never in debt.
- The floater account – this is a floating bit of money that comes in useful if we REALLY need something. The day before MrC and I get paid we may discover we have a bit extra we didn’t … well… spend. So this gets shifted into the floater account for those ‘JUST IN CASE’ moments, which came in useful a few months ago when our fridge packed up. We had the luxury of just waltzing in store and buying a new one. Sometimes, on the 2nd of the month, the bills come out and we have some money left over. For example we may use the internet less, or the kids may order fewer movies that month or I may keep my international calls to under 10 minutes…lol #AsIf. This money also goes to the floater.
This may seem like a faff about, BUT this is how we cleared over £7000 worth of debt in fewer than 2 years! It’s second nature to us now. We’ve effectively idiot proofed our finances and are still debt free. What we like about this system is that what is left after bills and savings is there to either spend or float. Of course we don’t go mad… as that floating money REALLY does come in useful.
Next year we hope to have this off to even more of an art…we don’t want to be caught out with the kids birthdays, Christmas and school uniforms (which only get pricier year after year). An account for Christmas/ Birthdays and an account for school uniforms/ school shoes will be ready for the 1st January 2013 with a small direct debit being sent to each account every week.
This small amount isn’t missed on a weekly basis, BUT adds up over the year and helps ALLOT!
The school uniform for out 3 children cost £100 for the 3 uniforms (2 of everything and new underwear), £65 for 2 jumpers each (so 6 in total) and £150 for 3 pairs of school shoes and 3 pairs of plimsolls. The GRAND total there was £315. This over a 52-week year is £6 a week.
Birthdays and Christmas… If we say wanted to spend £50 on each of the kids for their birthdays (3 kids remember)… that’s £3 a week to the saver. Obviously Christmas is a hard thing to estimate in advance. Some years you spend sensibly and other you buy larger items… it’s a year-by-year thing. BUT… Basic maths will tell you that if you save £10 a week over 50 weeks of the year… you’ll have £500 to play with at Christmas time… simples [squeak].