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I’m not going to lie, I started 2019 with some serious money anxiety.
I’d gone really over budget for Christmas: partly because I was still used to only having to buy for two people (my parents) and I had Chris’s rather large family to contribute to.
But also because I allowed myself to get caught up in the guilt mentality that I hadn’t bought everyone enough presents.
Even up until a few days before Christmas Day, I was looking on Amazon for a few extra last-minute stocking fillers that I could order!
As such, I didn’t stick to my usual budget at all or even keep a spreadsheet to track my budget as I have done in the past.
The knock-on effect was that because I’d spent so much more than normal at Christmas, come January I was left worrying about how I was going to pay the bills I had coming up.
This was the first time this had ever really happened to me, as growing up with very little money made me extremely mindful about what I spent my money on, and it’s not something I ever want to experience again.
It gave me a serious kick up the butt to get myself back into that mindset, really pay attention to what I was buying, and think about if it was something I would actually use regularly.
I’m happy to say 2020 has started completely differently, with a lot less money anxiety!
I set my budget and made a spreadsheet in early November, working out what I could afford to spend and how much I wanted to spend per person.
The spreadsheet had different sections for each person I was buying for, plus a section for the total amount I’d spent per person, as well as the amount I’d spent overall.
I also put the amount of money I’d set aside for Christmas in a separate savings pot, and made sure I only used that money for presents.
Having the money in a separate pot was one of the best decisions I’ve made, as it lets me see at a glance how much money I had left to spend, and meant I wasn’t distracted by the rest of the money in my bank account, which stopped me spending more than planned.
While 2020 has started off with less anxiety, I’m still sticking to the tips and techniques I used last year to help get my financials under control.
It lessens my anxiety, although I don’t think I’ll be free from money worries for a long time, as not having a stable income to work from is one of the biggest downsides of being self-employed!
Open a Monzo account
This has been a game-changer for me, and I recommend them to everyone – I even got Chris to switch over once he saw how good it is!
I’ve had a Halifax account since I was about 6 years old, and while I never had a problem with it, the app and website are horrible to use.
The interface isn’t particularly user-friendly, the tracking features for how much you’ve spent versus how much you’ve put in isn’t very clear or intuitive, and you can’t set and monitor a monthly budget.
I never wanted to check my account as it was a pain to log in, so I just used to keep a rough estimate of how much I had spent and what I should have left in my head.
While I was never too far off, it wasn’t the best technique to use and it meant I never knew exactly how much money I had in my account.
Monzo is so much better!
They have so many useful features to help you keep an eye on how much money you’re spending, what you’re spending it on, and you can even choose to get paid a day earlier if you have a regular job.
They let you set a monthly budget of how much you want to spend, and then break that budget down even more to categories such as Travel, Groceries, Personal Care, Eating Out, and Entertainment.
So if you want to limit how much you eat out, you could set a budget of say 20 for the month, and then when you get close to that amount it will send you a notification to warn you.
Plus the app loads smoothly, looks fantastic (which makes the designer in me very happy) and you can see all the information you need at a glance!
Even if you don’t want to move over completely to Monzo, I would still recommend setting up an account and maybe using it for your extra savings, or paying yourself a set amount each month which you can use to treat yourself.
Keep track of your spending
I do this quite a few different ways, which is probably overkill but it works for me.
As I’ve already mentioned, I use the category section of Monzo to keep an eye on not only how much I spend each month, but on what.
This has been an eye-opener for me, as I never realised before just how much I spend each month on eating out!
I’ve since been able to cut back on that and it’s saved me quite a bit of money.
I also have a budget tracker journal which I use to keep track of any random purchases I make during the month.
I don’t include reoccurring payments like Netflix or my Giffgaff goodie bag as those are already budgeted for, but if I decide to buy a new book or tote bag I’ll write it down.
I also go back after a few months had passed and “grade” each purchase from 1 to 5, depending on how much use I got out of it and if I felt it had been money well spent or not.
For example, if I bought a book, really loved it, and could see myself re-reading it on a regular basis, I would rate it as a 4/5.
However, if I picked up a new lipstick and then realised I’d only used it once in the past three months, I would rate is a 1/2.
Doing this helps me see where I’m wasting money, and I’ve noticed I’ve been a lot more copious about the things I’m buying since I started rating them.
Also having a physical journal on my desk really helped keep me accountable and made sure I actually filled it in.
As much as I love my spreadsheets, they’re quite easy to ignore as you don’t see them unless you have the tab open.
But that’s a lot harder to do with a physical journal that is sat on top of your daily planner, which you have to move every time you need to check something!
The final way I keep track of my spending is, surprise surprise, to use a spreadsheet.
I know I’ve just said that I prefer my physical journal, but a digital spreadsheet has some advantages over it, which is why I go a bit over the top and use both.
Mainly the fact that it automatically calculated the totals for you, which is a lifesaver if you’re anything like me and math isn’t your strong suit!
I made mine myself and it has a page for each month, then on that page, there is a section for each individual purchase, with a total spend for the month at the end.
Then on the first page, there is a column that shows the total for each month, with a second section that shows the total spend for the year.
That one is a scary column, and I’ll admit I don’t like to look at!
However, that leads me nicely on to the next point…
Don’t bury your head in the sand
It can be really tempting to bury your head in the sand and hide away from your financial situation, especially after Christmas when you’ve probably spent more than you would in an average month.
However, no matter how tempting it is, ignoring your bank account and hoping everything will work out okay isn’t going to help anything.
In fact, it will probably make the situation worse!
Take the plunge and see what you’ve got left in your bank account, then you can work out a plan from there:
- How much do you have coming in every month?
- How much do you need to cover bills, food, travel, and other essential costs?
- How much do you want to add to your savings?
- How much do you want to set aside to spend on yourself?
Work out the answers to those questions and then set yourself some budgets and goals. Write them down somewhere that you’ll see them on a regular basis, and try your best to stick to them each month.
It can be hard to do at first, but eventually, it will become a habit and something you won’t need to think about as much, as you’ll do it automatically!
Enforce Late Payment Fees
This one is specifically for fellow business owners, but one thing I’ve seen a lot on Instastories at the moment is business owners talking about not having been paid overdue invoices.
Some of which have been due since the end of November/beginning of December!
Running your own business can come with a certain amount of money anxiety, especially if you don’t have regular clients or you’re going through a slow period, but late-paying clients and the stress and uncertainty it causes you makes the anxiety even worse.
I could rant about how ridiculously unfair this for days, but unfortunately, this post isn’t about that. So instead I want to highlight something that not all freelancers know about: Late Payment Fees.
Under the Late Payment of Commercial Debts 1988 Act, you have the legal right to charge late payment fees on overdue invoices.
If you don’t have a section on your invoices or in your terms and conditions related to late payment fees, it might be a good idea to add it in.
The wording I use on mine is:
Payment is due no later than 28 days from the date of this invoice. Failure to pay by (the date it’s due) will result in a charge of £40 per week that the payment is late. Each subsequent week that payment is late, a new invoice with the charge added will be re-issued.
However don’t panic if you don’t have anything on your invoices at the moment and some of them are outstanding, as you’re still entitled to claim Late Payment Fees regardless!
I am by no means an expert on this, so I would definitely recommend doing some research yourself and maybe joining some freelance/business groups or memberships for support.
Grow and Glow* or Independent Girls Collective are two memberships I would highly recommend joining, as I’ve personally found them so helpful for answering questions and growing my business – especially when filling in my tax return for the first time!
What advice do you have for dealing with money anxiety, especially after the Christmas period?