Budgeting for dummies

I have spent a lot of my time begrudgingly filling out spreadsheets with every penny that I've spent, each day, week, and month. feeling like I'm being punished for paying my bills and buying food. This is how I was taught to budget, at school and at home, and it's how most websites with 'free budget planners' will tell you how to do it.

But it doesn't work for me. If this is how I have to control my finances, I'd rather not do it. I'd rather cross my fingers and hope there'll be some money left for the last week of the month than face the spreadsheet headache. 

There is another way, that works for me, and since I've employed it I seem to be finanically care free and well on my way to debt free. If you've got a calculator, a tiny bit of self control and a fairly good memory and get paid monthly it should work for you too. 

1. Put all your bills on direct debit or standing order. 

2. Set up all your direct debits to collect money immediately after pay day

3. After the first month, check your bank statement and add up the total of direct debits collected. If some of these will be different amounts each month, use a high average of what the payment usually is. Always overestimate!

4. Take the total cost of your outgoings, and deducted from your monthly salary (after tax), then take £100 off the answer. 

5. Divide the left over by the number of days until you get paid again. 

This gives you an amount per day that you have to spend. You may well be surprised at how much this leaves you with, and the best bit is it doesn't have to last all month, it only has to last until tomorrow. If the calculation leaves you with £5 or less, you really need to look at your outgoings and see how you can reduce them. If you spend all day at home one day, the next day you will have double the amount to spend! I find this is a good way to help me save towards things too, because I'm not concentrating on what I am spending, I'm concentrating on what I'm not spending. All in all a lot more rewarding that 'listing' every penny I spend. At the end of the week if I've spent below my allowance each day, I treat myself with the leftovers, or if I'm treated enough I'll chuck it in my savings account. 

Another way to employ this method is to check your bank balance each week and divide what's left by the days until payday, but I feel this doesn't give you much so room for error or unexpected expenses. 

Some other ideas to help you feel richer.....

• Look after the pennies and the pounds will look after themselves. Walk a bit further to the supermarket rather than the convenience store, and you could save an average of £10 per week. 
• Mix up your tender. Wherever possible, pay by cash. One it's gone, it's gone. I use the self-scan checkouts a lot a supermarkets. I pay for almost everything on my debit card. If I have a few low value coins in my purse I always stick these in the machine before my card, just to get rid of them but then less money is coming off my card too. Win, win!
• Stash your cash. At the beginning of the month, I take £100 cash out of the bank. I put this in an envelope and hide it in my house. On days where I need cash depending on where I'm going I take £10 or £20 out and leave my card at home. I only do this when I'm not going anywhere dodgy though. The rest of the time I always carry my card in case of emergencies!