Being money-minded

[Lily]

This is embarrassing to admit, but I self-sabotage when it comes to money. I recognise I do this with relationships and food too - I finally start being happy with my body, so I start eating crap, and run away from a man I really like. Now I realise I am doing this with money too. All I long for is some sort of financial security, but because for so long I have been hand-to-mouth, I can't get used to not living like that, much in the same way as I can't stop myself doing stuff because for so long I worked all the hours I could.

We got a small bonus last week and having that money (a few extra hundred pounds) really frightened me. I almost had a panic attack FFS. I was planning on spending a percentage of it and throwing the rest at my c/card. But by the time I'd paid my car tax off, my car repairs off and my holiday, plus new bins and a new top, I have only a couple of hundred left which I've put in my emergency fund account. So then I feel rubbish, and worried about money again, but at least I am used to feeling like this. I'm used to constantly worrying and I feel comfortable being constantly worried.

I have a habit of ordering/buying stuff and then taking it back as if to get that shopping 'high' (in fairness I don't often keep stuff, unless I really like/need it) - so much of the stuff on the clothing thread, for example, has been returned. But I would like to stop that as well.

How do I work my way out of this? I don't get a bad wage and I shouldn't be like this. I work all the time and yet I still wind up skint. I keep a close eye on my finances, using both Excel and a budget planner app to do so. I know in order to move forward I should stop panicking when I have some money, because panicking makes me fritter to get rid of it - the same way that I need to not panic about being less heavy, or if a man appears to like me. But I don't know how to do this.

Now I feel utterly rubbish, despairing about my present and my future, furious at myself and worried about money again - but at least I feel comfortable feeling like this.

Any advice gratefully received, please.

[Derek Nimmo]

I think there's an awful lot to unpick there, far from all of it financially-related. However, sticking to money only, a basic rule of thumb that I was taught (which may or may not help you feel calmer about matters) is that you should have 3-6 months worth of expenses in an emergency/savings fund.

Is that something you could aim for if you don't have it already? I think you're someone who likes having very firm targets in place.

[Lily]

Yes, I know you should have at least 3 months' worth. I was trying to aim for it, but it got frittered paying off stuff. Then I thought I'd try saving up for a deposit for a house so I could get that rabbit :hollow LOL: but only have about £300 in this. Bruv says I should concentrate on paying off my c/card which I pay off at £200 a month, then building up savings. I try to have a slush fund, but dip into this to keep my overdraft at bay (that's a small one - £250). I keep thinking I'm doing well, and then I get stymied by something and I screw it all up again. I'm so ashamed of this - it's completely childish.

I've just cancelled an order for something I didn't need, so that is a start. But I just HATE this. I am practically middle-aged and I am utterly worthless. I don't mean worthless as a person blah blah but I have nothing at all.

[Kenickie]

I agree with Derek, both that a target might help, and also that this is about more than money, if it's a repeating pattern, so it sounds like something a counselor could help with.

Just focusing on the money though, I would try and go cold turkey on discretionary spending (eg clothes) for say three months or more, and then after that just avoid stuff which gives you the feeling you need to buy stuff (magazines, wandering round shops, browsing on websites, sales emails etc). You might find that cuts down the urge a lot.

For example, I could buy new clothes every day, but rationally that's not really where I would get most joy from my money, so I only look a couple of times a year and then order a load of stuff and that's my lot.

[Kenickie]

I'd definitely focus on the credit card over savings.

[Derek Nimmo]

I agree with your brother in that paying off a credit card (if you're being charged interest) should be a priority, and when you've done that you should you then focus on savings.

I know you keep spreadsheets etc, but do you have a little notebook that you could use to make a note of every single thing you spend money on every day? Just the act of writing it down could help you in curbing it.

[smalex]

Yes, there is much to be unpicked, I agree. I also have a absolutely baseline quantity of money in our account (in our case, it's 4k, but we've a house, dependent child and 3 mouths to feed so adjust accordingly), it is just NOT to be touched unless in dire (and I mean, we'll default on the mortgage or go hungry kind of dire) need. Can you work toward having a pot which is not to be touched? In a separate account if required.

I do think you need to break out of the rush you get from spending. To be frank, ordering things to send them back has always struck me as a little counterproductive. I'm a terrible psychologist so i don't really know how, but I think there is an addictive quality to spending the £££ and then feeling shit about it. Highs and lows.

[smalex]

Can you get rid of the credit cards (maybe keep one in a drawer somewhere in case it really is necessary)? And maybe gradually decrease your overdraft. I feel like you need to wean yourself off the things which facilitate a lot of this behaviour, because its a habit.

[Livilla]

Definitely cut down on the stimulus to send money - you may find that helped you to get out of the habit of buying things for the thrill? I have been really cutting down on personal expenditure this year as until J starts school next year we are at peak childcare expense, and have found that not buying magazines, unsubscribing from all the mailing list emails and binning catalogues without looking at them has made it much easier to get myself out of the mindset that buying clothes will make me happy. I still spend money on clothes, but my purchases are far more considered - i.e. buying a direct replacement for a wardrobe staple that needs replacing, or a sale item that I know I will get a lot of wear out of.

This is all far more common than you think though Lily, millions of people struggle to manage their money and avoid temptation the way they'd like.

[Lola]

I must admit, I've never understood the appeal of ordering loads of stuff & then sending it back. I would find that quite depressing plus it enforces the habit of buying stuff. Recently I ordered loads of stuff online from Next, about 10 items, & ended up only keeping 2 items. It just felt completely pointless & there was no high from shopping. I think online shopping is too easy & it's more pleasurable to actually go to the shop & see something nice & buy it knowing you will keep it. So maybe you could try avoiding online shopping for a bit & go out once a month to proper shops with a set budget & treat yourself? Make a day of it, have coffee & cake etc.

I also agree with paying off the credit card before adding to savings. It makes you feel so much better to see the number go down.

[Cerise]

Definitely quit the ordering and sending back. I'll bet you often end up keeping a little something that you don't really need.

[H1ppychick]

I can't really say anything very informed about the psychology of your habits but purely from the money perspective the key things are, in order:

- Reduce expensive debt first (credit cards, overdraft that bears charges). Restructure any such existing debts into personal loan if that secures you a cheaper rate. Once you've done that:
- Establish emergency pot in accessible funds. Once you have this funded, then
- Invest in longer-term savings. If it helps you to keep your hands off the money, lock it away into a notice or fixed term account.

If you've not looked at it, the moneysavingexpert.com website is very useful.

Probably the best page to start with
http://www.moneysavingexpert.com/family/money-help

[Froozy]

I"m sorry it's so tough Lily. Financial stuff is really emotive and it can be hard to take a step back when you feel like you're barely keeping your balls in the air. I imagine most of us feel like this some or a lot of the time and it is shit but manageable.

From your spreadsheet can you see if you earn enough for the expenditures you have? For me, dipping into my overdraft every month would be a warning that something's got to give. I have used Derek's notebook approach when I've been living at my means to justify buying Heat (or whatever). I found writing everything down in infinite detail very helpful in finding where I could make savings.

I would transfer your credit card to an interest only one (if you don't have that), cut up the card and concentrate on paying it off. It's a stretch and not necessarily addressing the underlying issue but could you transfer the thrill of shopping to the thrill of paying off your card?

[Ella77]

Would it help you to stop ordering and returning things if you think about how bad it is for the environment to keep doing that? All that packaging, potential extra trips for delivery vans, etc. etc. Knowing that by stooping that you are making a small positive change in the world could potentially help.

I sympathise, because I grew up with some VERY weird ideas about money, so I lean towards the more fearful end of the spend-save spectrum.

From your spreadsheet can you see if you earn enough for the expenditures you have? For me, dipping into my overdraft every month would be a warning that something's got to give.

This is a really good point.

[Derek Nimmo]

I really like the idea of a dedicated shopping day with budget, and it being a real treat Little L. I might adopt that myself!

Also, can you identify when it is that you do your online shopping and substitute it for another habit that gives you a boost instead? (Like, for eg, reading.) You have such a busy schedule that unless you're doing it at downtime at work, I'm not sure when you're fitting it in.

[Rebel Pebble]

I agree with Derek that this is about more than just simple overspending. I'm not THAT organised with money myself so I can't add to all the spreadsheet advice. But, yes, if you're paying interest on the CC then that needs to take priority in terms of being paid off.

If you're sending most of the clothes back then I'm guessing that's not the only place money is slipping away. My only suggestion to add to the others is to try and cultivate a cynical scepticism when it comes to expensive "health" stuff, especially supplements and things like the mberries you posted about. I know you didn't buy any but I can't think of a better example of an absolutely literal waste of dosh than those things.

[Lily]

Thank you all for your replies (and for not bollocking me as I deserve).

I have just had a coaching session in which we talked about this a lot. I have a mantra now which is "Don't buy it at the bargain amount this year - you'll be able to afford something nicer, at FULL PRICE, next year" and I have to repeat that every day with an action to make it settle in. I don't spend a lot on stuff like supplements and stuff, but I have just cancelled an order for a Laura Mercier lipstick (I'm going to ask for it for my birthday) and £18 eye make up remover (I'm sure I can find something for a fiver which will do the job just as well).

My income v. expenditure actually works out fine, so I SHOULD be fine, even with my little things like a cleaner and PT. It's just I overspend every single bastarding month. I don't get magazines and have subscribed to most emails and stuff, which I found really provoked me into spending! But I think Liv's idea of buying something only to replace something new is a very good one. I did have to do that a couple of months back when my body shape changed, but I have replaced everything apart from a pair of jeans now.

I get stuff on my card, then pay that off, then I'm short of £ so buy stuff on my card to pay off the next month Thinking about it because my card is a 'rewards' one I think I use this as an excuse for spending on it "Oh because it's giving me rewards". When actually I need to not use it at all, and sod the £15 every 3 months I get for using it.

Helping the environment by not ordering stuff is a very good way of helping me curb it as well.

My parents are always very careful with money, mainly because we never had very much at all. So I feel ashamed that I'm rubbish despite having paid off a large debt and getting stuff much more under control. I am terrified that in the future I'm going to have to look after them, but I can only afford a studio in Dodgytown and we'll all be in one bed like the grandparents in Charlie & The Chocolate Factory. When they deserve a lot more.

There is lots of food for thought here; thank you all for your replies. I feel less hopeless a bit. And I think keeping a spending diary is the way to go, too. Like an eating diary, writing down everything that I spend will help.

[Texaco Shirley]

It's interesting that you've compared it to an eating diary Lily as the buying to send back behaviour strikes me as a direct parallel to bulimia.

[Skips]

Lily, I have an air miles card that use in a similar way to you, except I pay if off immediately after I've made the purchase (even if it means I make a payment every day), so if I don't have any money available I don't put it on the card; could you pay the card off and do something similar going forward rather than playing catch up? Even if it means it's a couple of months card free till you clear it and start again?

[Hobbes]

The only other thing that jumped out at me is are you actually budgeting properly, including putting monthly money aside for yearly expenses?

As you said you paid car tax and car repairs with your bonus, that suggests you are paying these things as they come up rather than putting the money in a separate account; and that's where people start using overdrafts and cards.

Yearly categories that people usually forget to put monthly amounts aside for are car stuff, xmas/birthdays, vet bills, holidays etc. Also budget a monthly amount for entertainment & clothing, and when it's gone, it's gone.

Whatever's left goes into savings or to pay off debt, I would focus on paying down debt mainly, but definitely save a small amount monthly for an emergency fund. Pay off your most expensive debt first, probably your overdraft.