Hi,

 I have slight issues with discipline and saving money. Does anyone know anything about companies which take your money, sort out your bills and then give you an allowance to live on. I feel this would really help. Does anyone have any information on such companies and how they work or if anyone has had any negative experiences. Any help would be appreciated.

Welcome to Dollar Stretcher - I see you are new to posting. While in theory it may sound like a great idea to have someone hold you to a budget, there are a couple of serious problems. First of all "no company" would be willing to do it for free. And if you have issues with money and discipline, YOU need to keep your money, not PAY someone else to handle it for you. I would recommend that you read and listen to Dave Ramsey and other no-nonsense professionals about how to get your financial life in order. As many of us already know, how we handle money is very connected to our emotional, physical, intellectual and spiritual lives. If you want true control over your finances you have to be willing to GO THERE to find out how and why you have issues to begin with. Secondly, there are too many scammers and con artists who are looking for vulnerable people like you to take advantage of. No matter how good the sales pitch or the promises sound, its too risky. Look how long it took for B. Madoff to be exposed. Please thoroughly check out the Dollar Stretcher website and you will find the resources you need to get started.

 Welcome!

I agree with Toni, but I have a question for you. Why do you want/need to save money? Why are you concerned about it? Maybe answering that will help you sort out your perceived lack of discipline. 

Hi, thanks for your response. I just feel that I am frittering away money that I might need in the future.

0124oconn:

I just feel that I am frittering away money that I might need in the future.

 

It's easier to save money if you set a goal. Just saying, "I need o save money" doesn't do much. Saying "I need to save $1000 by the end of the year" will help you focus and focus is the key word. Discipline will not be developed if you put someone else in control, so if you don't learn that control yourself, you'll always have to rely on someone else and that's not a good thing. 

I'm not a psychologist, but here is how I would tackle it: First, set small goals. Try to put back $5 a week for 10 week, for instance. Tell yourself that when you do that, you can spend the $50 any way you like, but until the 10 weeks are up, you can't touch it. It may take a few tries, but once you've met that goal, go on to the next one. I don't know what your situation is, but maybe one goal could be to pay $10 extra on one debt every month for six months. Eventually you'll find yourself more in control of your spending and can begin to set larger goals. 

Baby steps will get you there. Post your successes (and failures) here and we'll cheer you on. There is a daily dollar stretcher thread where you can check in, and various other challenges and check point types of threads here. Join in. Some are in your shoes, some are working their way out and others have been there at one point. We all need the support of each other to stay on track. 

 

I very much identify with your last sentence!  Its great to have a little bit of money behind you for future goals or present emergencies. I used to be a 'fritterer' too, (Is that a word? If not, it should be!). One way to clearly highlight where you feel you are wasting money is to record your spending for 2-3 months. Its how I started and then a budget gradually evolved when I discovered exactly where my money was going. Even if you don't want to budget in the end, (although I would advise it), writing down all your spending will allow you to save by allowing you to reduce or cut out completely wasting money on none necessities, e.g. spending $40 a week on eating outside the house - maybe cut down to $10 a week or plan and bring food from home.  If you buy lots of magazines and newspapers maybe cut back to one favourite mag and get your news off the net or TV.

I was recording my spending and budgeting so I could pay off the last of my mortgage - $43,000 in 19 months.  Since then I have become a bit slack but the point is, having a goal is very motivating.  Is there anything you want to save for?  You can have short term, medium and long term financial goals.  Paying off the credit cards, a new car, a holiday or redecorating could be short term goals.  Buying a home can be a medium - long term goal.  Saving for retirement may be the ultimate long term goal.  Maybe start with a moderate short term goal to get you motivated and decide to stash away every spare cent so you can achieve it as quickly as possible!

Recording everything you spend sounds like a pain in the bum, but it isn't really - its just a small habit you need to find 2-5 minutes in your day for.  Just keep a dedicated notebook in your purse and write in it every day, (that is if you spend every day).  Cheques and things like utility bills are easy because you have a record of that spending.  Its cash spending where you can come unstuck.  Always ask for and retain receipts until you have written the purchases in your spending book.  I also used to check how much cash I had in my purse each day and write it in the spending book.  If you start off with $100 and spend $40 on groceries, $5 on a magazine and $20 on fuel for the car, when you get back from shopping write your purchases in your spending book and subtract your purchases from the $100 you started with.  If you have less than $35 in your purse you know you have forgotten to record your spending on something.  Its very easy to do!  Before I started to record my spending I would go out with couple of hundred dollars and come home with $20 and not know where half of it was gone!!

Good luck

Jo

 You've already recognized that you have a "slight" problem with spending money, and that's half the problem already solved, waking up to what you haven't been doing right, or well. Dave Ramsey is a good one to read up on for help.

With a little effort you can do for yourself what those companies would do for you and charge you an outrageous fee. Thanks to the internet there is help on just about any subject you can go do a Google search for, like how to identify unnecessary expenditures that you can cut back on, making a budget, tracking expenditures etc. 

My best recommendation is to start recording every expense, and every amount of income for several months. You can do it in a notebook, or buy a columnar pad of forms, which come in tablets of 4, 6, up 13 columns for recording expenses. Or if you have a spreadsheet program in your computer and know how to use it you can make up a budget from there. 

If you use a debit card instead of paying cash for small expenses, that may be making it too easy to spend money.  Try using cash instead and keep a separate journal for those expenditures, label it a cash journal. You can glue an envelope inside the cover to hold receipts. 

If you record every expense like suggested, it may be a reall eye-opener of how the little expenses can add up to big amounts.  Good luck with what you are doing and let us know how it goes.  Edey

There are some really good suggestions here already.  I listen to Dave Ramsey from time to time and followed a modified version of his plan (paid off the higher interest cards first instead of the lowest balance) and am now debt-free except my mortgage.  Keeping track of your spending is essential!  Write it all down- you will be shocked at where you spend your money!  When my husband and I did it we were stunned to discover we were spending $400 a month on booze!!  The odd case of beer or bottle of wine really added up!  It sound like you already have a sense that you are spending unwisely so it may not be as much of an eye-opener for you as it was for us but you never know.  It's worth the exercise to do it.

I'd also recommend trying to pay for things with cash, if possible.  There are several good studies that show that people spend more money when they use plastic (even a debit card) than they do with cash.  Somehow our brains tell us that plastic really isn't money.  If you can't do it with cash, then debit card is the next best thing.  Stop using credit cards, period.  If you don't have the money to pay for a dinner out, why would you want to pay 18% interest on it?  That's literally flushing money down the toilet, isn't it?    We still use one credit card but only for large things and never for disposables like food, gas, etc. and we pay off the balance in full every month.

Start automating some savings as well.  Set up a savings account with your existing bank (or better yet a high interest online account) and have them transfer out a set amount every 2 weeks or every month from your chequing account.  It adds up very quickly and is a good emergency cushion.  If you have discipline problems don't make it to easy to access- for example don't tie it to your ATM or debit card.  We keep $1000 in our savings account for emergencies.  We have automatic withdrawals every two weeks set up on our chequing account into a money market account and into registered retirement savings accounts and tax free savings accounts (IRA's and Roth IRA's are the closest American equivalents to those last two but the TFSA is way better than a Roth).

And set a goal to strive for.  I want to.... pay off a credit card in six months...  go to the Bahamas for a vacation next year... put a down payment on a house in 3 years....  You get the idea.  Then figure out how to make that happen, do the research and come up with a road map to get there.  It can be done!  You recognise that you have a problem and that's half the battle.  Keep us posted.  As Dave says: Live like no one else now so you can live like no one else later."  (Or something like that!)

Good luck,

Penny

Another good resource in addition to http://www.daveramsey.com/ is http://www.iwillteachyoutoberich.com/.  Some pretty good info in his blog articles.

I am bad for saving too.  getting deals and shopping at sales is fine but we don't have hundreds to spare. 

 to be honest it has to be automatic payments from our accounts that go to places we don't think of.   dh has money going to a retirement acct for me and I put money in a ing acct for savings.

MarthaMFI:

 to be honest it has to be automatic payments from our accounts that go to places we don't think of.   dh has money going to a retirement acct for me and I put money in a ing acct for savings.

This ended up being the best way for DH and I to save money. It has to come out of our paychecks immediately before we can see it (or spend it). Retirement is automatic and we have no control over that but we each voluntarily signed up for our employers' credit union accounts (free) and $200 of his paycheck and $200 of my paycheck go automatically into savings accounts. (we are paid once a month) DH has 2 accts: one for emergency things and one for "fun." My savings goes into one account and I use it for emergency savings and for cash for vacations and holiday gifts. Without this automatic option, we were saving less than $20 a month when we had the ability to save so much more--and putting repairs, etc. on credit cards. Out of sight, out of mind! And I declined the debit/ATM card from my credit union. The only way I can get to that money is to take myself physically over to the bank and withdraw it.

Good luck with your savings goal. You can become disciplined but I understand how important it is to have support and tools to make a person successful.