What are your top tips for managing your money?

You're all a fairly sensible lot, it seems, so I thought it might be interesting to see what advice would you give in these strange times for managing your wealth?

A couple of years ago, I struggled with my money. I was asset rich, but cash poor and it bit me hard. It's taken a couple of years, but I have managed to turn it around somewhat.

My top tips would be:-

(1) Adjust your lifestyle and really think about what you are buying

Whatever I earned, the proportion I spent seemed to match, so I wasn't really any better off at the end of it. The 'investments' I made in spending in my high earning times wasn't really worth it -- e.g. some posh high fashion boots that I now don't wear (and cost me probably what I spend now in a month on food). I sold them on eBay for a fraction of what they cost, but the net spend still left me worse off.

(2) If you can, sell what you don't want or need any more
This last year, I have sold (to mates):- 3 mountain bikes, a dartboard, a TFT screen, several bags and pairs of shoes, clothes still with tags on that I never wore, some household stuff (juicer, unused duvet covers, vases etc). Sure I don't have that stuff any more, but I never really wanted it anyway and I've limited my losses from buying them.

(3) Get on the property ladder
Yeah, seems to fly in the face of the current market, but if you view it long term, over say 25 years, the oscillations in property values should take you to having some equity at the end. And, unlike rent, at least you get something back. There are some proper bargains at the moment -- if you have some deposit to put down.

(4) Pay yourself
Every month I pay a modest amount into my ISA, and treat it like a bill. Even small contributions add up over time.

(5) Review your bills regularly
Simply cut out what you don't really need to pay. I chopped off, each month, £35 in mobile expenses, £70 in various insurances (for electrical stuff) and £80 in credit/store card bills (by using savings to pay them off)

(6) Don't use the car so much
I've started biking to anything under 10 miles ... not sure how that will play out in winter, but still -- saved me £xx

Yeah, probably more, but it's a start...

It makes sense to me. For example, my raw calculations for my own cicumstance are:-

I have a home worth (at forced sale) £160,000, and also an approximate 1/7th share in a home worth (at forced sale) £172,000. On these two properties, I have capital repayment mortgages for £115,000; which leaves me with current equity at around £90,000. But current equity isn't important as it is academic until I sell

My mortgage terms are for over 18 years. So, at interest rates at a mahoosive 18%, I could be feasibly be paying back a total £390,000 for the 2 properties (base repayments + interest). In 18 years time, one would hope that the two properties would sell at more than £390,000 (they're currently £332,000 at forced sale). I'd own the house outright and a share in the other, plus any left over equity if I sold.

If I was to rent the same, not taking into account any rent rises, each would probably let for about £700pcm. 18 years x 12 months x £700 = £151,200 with no return whatsoever for when I'm 48 years old.

I hope that made sense. To me, the gamble seems worth it.

I really like your ideas. They make a lot of sense. I didn't quite understand the property one but then I've never owned any and probably won't for another 5-10 years.

Perhaps ... I dunno. Last I heard, using stats taken from 1975 to date, a £200k house sold in July 2007 (UK price peak) should have been, if following the proportionate rise and taking into account all economics-y stuff, £150k. It should have been 75% of its value.

So yours, if sold at £230,000 in July 2007, should have really been £172,500 to fall in with the average.

There was lots of overvaluing and people putting asking prices way above the norm going on last year. To slash sale prices by over half would take the figures below what it should be, though. That isn't a correction, that's being over zealous IMHO.

The problem is, people would rather cram against each other like sardines than spread out. Hence, more demand for 'convenient' property = higher prices. Of course, just the raw materials themselves are not all that much.

I am pretty sure Summerteeth is right though, about property being a solid investment over the long term. The west, i.e. N. America, Europe, etc. is still considered very stable countries, and N. America in particular is still the 'new world'. People from other countries want to move HERE. And unless that changes in the next few decades, demand will increase as population increases and demand for convenient property increases. Therefore, your house value increases.

1. Part of what you earn is yours to keep.

Rates better not go to 18%!! I moved to a tracker late last year and have watched my repayments drop!

I really should be saving the difference, but beer tokens are more appealing!

18 bottles of Carling for £5 at Tesco! Max of 6 crates per person!

It was like Supermarket Sweep when I was there this morning. I kept an eye out for Dale Winton.

18% interest is one of the reasons why the Bible calls usury a sin. <wow>

We bought a new house about 6 years ago and got a fixed rate of 6%.

I have a fixed 5.375

You. Dirty. Capitalist. Scum. You. Bock.

Good job!

Not as dirty as gul, obviously!

Gul is a democrat, he probably got one of those Chris Dodd deals.

Heh, yeah it would be nice if things worked that way. I timed the market well. Even more good news, my neighborhood is likely to be very desirable if the shit really hits the fan. I have a two minute walk to a train station, stores, restaurants, and am easy biking distance to downtown. When people need to sell their cars and such, they will want to live in my neighborhood. I bet housing prices have already bottomed out -- I see houses that have been on the block starting to move.

Rates temporarily hit 18% during the whole ERM debacle. But I remember them being in low double figures for some considerable time - that's why I quit working on local newspapers and switched to the international business press.
Daughter still isn't looking to buy just yet - we all think prices will continue to fall, and it's not as if she needs somewhere ATM. The one thing she has decided is that she won't be buying a flat, whatever happens. She'll probably start with a two-bed house and get a lodger in to help pay the bills. If the market really plummets, she might start with a 3-bed. But that's unlikely, as I doubt she'd be able to find a lender willing to let her borrow enough for that...

Housing prices may have bottomed out in your location, but the suburbs' prices are going to continue to plummet, with prices on the glut of existing homes dropping well below the cost to build new.

Well I live pretty close to the bone as it is. But I'm going to have all my credit cards paid off shortly, and I've cut down on a few luxuries. My car is in good shape and will be paid off soon as well, and it gets good gas mileage.

I tend to shop at one of the local salvage stores and find bargains there that help spread my money out. Plus I like to stock up on sales at the grocery store when they run specials. Things like tuna fish, pork and beans, crackers, etc. They last a long time, plus they don't go bad if the power goes out.

And I have a bike that I can ride if I really need to get somewhere.

Yes, I think you are right. I was focusing just on my neighborhood. Suburan life might become much less comfortable as people face the prospect of heating larger houses this winter, the need to drive long distances, etc. I think this is not just tied to this crisis but a long term trend. Areas within 5 to 10 miles of the urban core are becoming far more desirable.

I live in a pretty small town, anyway. Most of the things I need to get to are pretty close. Then again, there's always my mother giving me grief for not coming to visit her more often.

They're pretty good ideas!

Another thing I've started doing is repairing stuff. Things like washing machines and other white goods were so cheap at one point I'd just buy another. Now I'm a bit more cautious and get them looked at to see if they're beyond economical repair. Gawd... I'm turning into my mother.

Made sure the BBQ has a full gas tank too in case the shit really does hit the fan and we get rolling blackouts or some other funny stuff happens.

Going to cancel my sky tv as i never watch it, so that will save a few bob over the coming months.

My technique for successfully managing our money is simple: Let Mary Do it.

If I got anywhere near the finances, we'd be living in a cardboard box within a month.

Get out of debt, stop buying things you don't need to survive, learn to kill and skin your own food.

I'm trying to set aside more money. But with inflation looming I'm really thinking about investing into something more substantial. Like another house or something.

Or guns and drugs

Depends on the property. I used to like city-centre apartments, but the oversupply and current economic state makes me think loads of them are going to be brought under council control. Plus I'm well aware a significant number are pretty shoddy.

Having spent the 90's and 00's demolishing the high-rise follies, we've gone and repeated it... Labour do keep trying to take us back to the 70's, don't they

Part-buys aren't too bad at the moment - saw a 3 bedroomed detached in a so-so area for £48k. Didn't mention the percentage, but at that I reckon 25%... 50% would be too much to hope for

They are desperate to get some off their hands though, and you can get the first years mortgage paid for in several cases. If you can pony up the cash, they'll come up with any number of incentives to part it from you.