The Twenty-Something Series: Finance habits I'm changing for 2020

In 2019, I finally found a way to track my spending that works for me, and set budgets for each month. I was actually pretty pleased with how well it worked for me, and how easy it was to keep up the habit for nine months.

(You can read more about how it went here.)

Previously, I'd had an idea of what I was spending each month and didn't generally spend over my salary. (With the occasional exception of forking out for car insurance once a year or buying Christmas presents, for instance.) But, I didn't actually know where my money was going. 

Tracking my spending - and in particular, setting budgets for different 'categories' - really helped me to find out where my money was going. I could see how much I spent on groceries each month, how much I spent in the 'Personal' budget (aka, general crap, new clothes, the occasional coffee at lunchtime), how much I was spending on going out with friends... 

At the end of 2019, I took a look back on eight months' worth of my budget/spending spreadsheet. I looked at what my average spend was for each category each month, if I stayed within budget - and if not, why not. (Was that the month I had to shell out on car insurance? Did I have lots of friends' birthdays to spend on?)

I had a fun hour or so analysing my spreadsheets (nerd alert) and then casting a critical eye over it, ready to think about what my budgets should be for 2020. Thing was, when I started this whole budgeting exercise, I didn't have that much of an idea what my budgets should be. Did I spend £100 on food a month, or was it closer to £200? How much did I spend on a night out, and how often did I go out with friends? Well, now I know the answers to those questions.

In the rest of this post, I'm going to share a few finance habits I plan to change for 2020.

Making a more conscious effort to save

Obviously, I was trying to put away money every month and save up. I could see how much I was spending each month and know what my pay check from the day job looks like, so I could see roughly how much I hadn't spent and could therefore consider a saving.

This year, however, I'm going to actively set savings goals, and have set up my budget spreadsheet to track that properly, too. 

Plus, after looking at eight months of spending, I realised how nice it would've been to see how much I'd saved in that time, too, by comparison. 

Trying to cut back on spending

Like I said, I don't (generally) spend outside of my salary each month, but having looked back over eight months of spending, I know there are certain times when I've definitely gone a bit overboard, and could cut back. I know I'm always a few pounds over budget on my groceries each month, so that's one good starting point for cutting back. And I could definitely not buy clothes so often, so that's something else I want to cut down.

Plus, it'll all help with that monthly savings goal!

Tracking my 'business' finances more closely

When I set up my budget categories, I added one for 'business', for any spending related to my career as an author. I already know that's going to be a massive help when it comes to next tax year, and I've got a much clearer idea of what my expenses are.

I've always had any income from my writing be paid into a separate account to the one I use for my salary and day-to-day spending (also a big help in tax season), and I've got a system so it's relatively low-stress when it comes to sorting out things for my accountant and tax, but I think it could just be better. 

So, I've made another adjustment to my budget spreadsheet to include any writing income, too. (Plus, I've included another line for my salary, so I can actually see in black and white how much I've earned compared to how much I've spent.)

It turns out that having it written out on screen, rather than just 'having a good idea' makes me feel much more accountable and think more closely about my finances, so this just feels like a sensible move to tighten things up, rather than a big change.

If you want to read more about managing your money when you're self-employed, check out this post I wrote for my Writing Wednesdays series.

One big spreadsheet for the year

At the minute, I track my spend over the month, adjusting any budgets if I know there's any other expenses that month (did I mention car insurance yet?) and at the end of the month, I file a copy on my computer, clear the spreadsheet, and start fresh. 

So when it came to looking at everything over the last eight months, it took me a little while to get everything into one central spreadsheet to take a look at averages and totals and compare things properly - and that was the only time I really did any comparison of my budgets or took a more critical look at things.

The plan for 2020 is as simple as copying those 'budget/actual spend' total columns over into another spreadsheet at the end of the month when I file a copy. It'll only take maybe two minutes extra, so it's not exactly a cumbersome task, and I'm hoping it'll mean I can be stricter with myself as the year goes on, and understand my spending habits even better.

(Look, I like a spreadsheet, okay. And as it turns out, I really like to know where my money's going.)



Are you setting any finance goals for 2020, or changing any of your habits when it comes to money? I'd love to know, so let me know in the comments or over on Twitter!

PS. I've really been enjoying The Financial Diet over on Instagram and Twitter lately - it's keeping me motivated when it comes to being more mindful with money, and they have a lot of interesting tips and content! And, I'm also a fan of Girlboss' Scrimp City series.