Budget is not a dirty word. So why is it that, when we think of budgeting, we immediately feel restricted and deprived?
Everyone can benefit from embracing a budget, no matter how much money they may or may not have. Because, as we know, life has a habit of throwing us scary curve balls, such as a pandemic, a cost-of-living crisis, the threat of war, soaring interest rates and energy bills — not to mention the difficult personal battles that may affect us, too.
Which is why being responsible for things within our power is a vital and — believe it or not — fun process.
I want to show you how to be in control of your spending, rather than it being in control of you.
This is not about how to make more money. I’m not trying to do that. This is a straightforward strategy to help you make the most of what you already have, written by someone who has learned the hard way.
I want to show you how to be in control of your spending, rather than it being in control of you
Everyone can benefit from embracing a budget, no matter how much money they may or may not have (stock image)
I had a toxic money mindset for the first 40-ish years of my life until I discovered the practice of ‘cash stuffing’, a simple method where you pay for everything you can with cash you’ve put aside, rather than relying on credit cards or mindlessly tapping your debit card whenever you need something without ever totting up how much you have spent.
I posted a video of my first ‘cash-stuffing’ exercise on TikTok to keep myself accountable, calling myself Mum Who Budgets, and then began to share weekly updates.
How to be supermarket savvy
- Write a weekly menu: After I began cash stuffing I wrote a menu list each week and gave myself time to check dates and labels as I went around the aisles. It may sound obvious, but don’t forget to pick items with the longest shelf life. Or the items that are reduced and could fit in your freezer.
- Bring bags: If I added up the number of ‘bags for life’ I have bought and then left in the car boot, I bet it would be enough to pay for me to have my hair done, twice.
- Don’t spend it all at once: I do a food shop on Monday and only take two-thirds of my cash food budget with me. Then, at the end of the week, I have the final third to spend on a top-up shop for necessities we may have run out of such as bread and milk. I also buy the meat for the Sunday roast.
- Do not take your bank card: I cannot stress this enough. If you take your card with you, it will be all too easy to use it.
What happened next was mind-blowing! Not only did I find a money-saving formula that worked for me, but my followers multiplied from 1,000 to more than 172,000 (and counting) in a matter of months. It was clear it wasn’t just me who needed a financial kick up the backside.
There are always excuses and reasons not to address the overdraft elephant in the room and I have probably heard them all. Some say they don’t have time to budget with cash, which tickles me because it only takes five minutes of my day.
Others are keen to start but want to wait until after their holiday, Christmas or some time never.
But, as I have discovered, it’s well worth taking the time to budget and here, in the first extract from my new book, Budget Happy, I want to share my simple strategy to give you the confidence to take control of your own finances.
As somebody who had always been hopeless with money, I was intrigued when I came across a post on TikTok by an American woman who said she had saved $30,000 (£25,000) and paid off her debt.
She mentioned a method I had never heard of before called ‘cash stuffing’, which involved using a ring binder containing pockets into which she divvied out her dollars. It seemed so simple. Each week, she would set herself a cash budget for all her expenses — from the food shop to fuel and so on — stuffing a pocket with the cash she would need for each one.
Then she would religiously stick to her limit, always paying with cash and never with a card, making sure never to spend a penny more — and often spending quite a bit less. Money which then went back into the pocket for the next week.
‘Yes, OK, Lisa,’ I hear you say at this point, ‘so far, so 1970s. Who has cash these days?’
I’m often asked how I pay for everything by cash and the answer is, I don’t. I have never said I did. I just pay for as much as I can using cash and avoid online transactions for those things I am able to.
We have to pay our mortgage, rent, council tax and energy bills via our bank account. So, too, our TV licence, broadband and mobile phone bills. These are set in stone (although it is always worth checking with your provider/landlord etc just to be sure) and non-negotiable.
Each week, she would set herself a cash budget for all her expenses — from the food shop to fuel and so on — stuffing a pocket with the cash she would need for each one
I’m often asked how I pay for everything by cash and the answer is, I don’t. I have never said I did. I just pay for as much as I can using cash and avoid online transactions for those things I am able to
There are other costs that may be on your direct debit list, such as tax bills, childcare and pension payments. Anyway, my point isn’t to pay for every single thing with notes and coins, but where you can, do.
A case in point is the water bill. Many people opt for the direct debit plan, but I don’t. The bill comes in twice a year and is based on our meter reading. While you can pay over the phone, I go straight to the post office with cash. I used to pay for it online but, since introducing my binder budget, I now put away £35 a month ready for the bill to arrive.
The amount I save is exactly what I need to cover the debt. It should be acceptable to pay for things with real money and yet we have been thrust into a cashless society where we rely on cards, online orders and home deliveries.
We are so conditioned not to use cash any more that cashiers often assume I will pay by card and are almost indignant when I don’t, particularly in the supermarket. There is generally a bit of tutting and head-shaking and I feel like a curious circus oddity.
Anyway, I had made up my mind to give ‘cash stuffing’ a go. With no clear plan of action in mind, I went ahead and ordered a binder.
The first thing I did, once it arrived, was to print out three random but consecutive months’ bank statements, as I wanted to see my pattern of spending.
I steered clear of October, November and December because that would be full of Christmas costs and plumped for a more forgiving April, May and June.
Armed with highlighters, I sat down and marked food bills in yellow, direct debits in pink and miscellaneous spending in green. I was deeply ashamed by the results.
I was spending more than £800 a month in supermarkets and, more to the point, I was throwing away food every week. So how much of my money was ending up in the bin?
It was so obvious — I couldn’t believe I hadn’t noticed it before. I had never used a shopping list, exercised self-control or had any strategy for spending. I just gravitated towards random bargains and promotions and fooled myself into thinking I was saving money.
Yet I never seemed to have all the right ingredients for a particular meal. I’m a mum of three and when I picked up my daughters from school, we would walk home past the local shops and I would buy them a sweet treat and something for dinner, even though I had plenty of food at home. Not only was I overspending in the supermarket, I was then popping into a homeware store to buy more things we didn’t need.
It was so obvious — I couldn’t believe I hadn’t noticed it before. I had never used a shopping list, exercised self-control or had any strategy for spending. I just gravitated towards random bargains and promotions and fooled myself into thinking I was saving money
Totting up my bills like this also made me realise I hadn’t addressed the impact on our finances of going from a family of four to one of five.
Since our third daughter was born, I had only worked part-time so that my work could fit around the family, but I had not adjusted my spending habits accordingly.
My husband Nick, a mechanic, was working all hours to build his business, so it made sense for me to take a step back. It was the right thing for us then and it still is today.
You can keep cash flowing!
Can you imagine what life would be like without actual, physical money?! This could be what happens if we continue to rely on making virtual and digital purchases.
Tapping away may be easy, but it won’t help when you want to assist the tooth fairy or contribute your change to the charity pot on the shop counter. We need to keep using cash when we can.
Let’s not be responsible for a cashless society and all the issues that come with that.
It was only now, though, that it finally dawned on me that the best contribution I could make to the family finances was not to earn more money — if I worked full-time, much of it would go on childcare anyway — but to spend less and budget effectively. It was time for a total money makeover.
Nick was cautiously optimistic about the ‘new me’. He is very organised with money, so we’d had the occasional heated conversation about my spending habits in the past.
I would get cross and dig my heels in. I wasn’t buying things for me, I would argue, I was making necessary family and home purchases, but now I could see he was right — did we really need yet another cushion?
I had no idea where to start, either, but I decided to take the big direct debit bills out of the planning, and focus on my costs for things such as food, petrol, birthdays and holidays.
Once I had worked out which categories I was going to put money aside for, I labelled the plastic pouches in the new binder in readiness for my first cash stuffing. My first folders were: food, fuel, day trips, date nights, Christmas, home decor and school.
Then I went to the cashpoint and returned home to stuff the money I’d allocated for each category into the relevant pockets in my binder for the first time.
From that very first month I felt more in control of my spending, but I didn’t have the proof it would actually make a difference to our finances until two or three months in when I could see real-life savings accumulating in my plastic pouches.
Don’t believe it will work for you? Well, one of the things that happened when I started planning what meals we would have each week and what ingredients I would need is that I cut my supermarket bill from around £200 a week to £90. What’s more, I don’t always spend the entire amount.
So, once I had done my weekly food shop (and a second trip later in the week to top-up on essentials such as milk and bread), I would be left with a small amount from my £90 budget
When I first started my cash-stuffing journey, I wasn’t comfortable committing to a certain amount for a savings challenge, but I felt something put aside was far better than nothing. So, once I had done my weekly food shop (and a second trip later in the week to top-up on essentials such as milk and bread), I would be left with a small amount from my £90 budget. I decided to stick whatever was remaining into a separate envelope each week and open it up once I had been doing this for 45 weeks.
It wasn’t a set amount so there was no pressure and whatever was left each week was a bonus. It quickly became an incentive to try to save £1,100 with a plan to buy my husband a watch. After seven months, I had an incredible £940, which was more than enough for what I needed.
The remaining food budget money was then added to a Christmas saving envelope.
Cash stuffing has changed my life. And it could do the same for you.
So let’s get started.
The first step is to look, like I did, at your bank statements.
I would recommend physically printing out several consecutive months of statements which include all standing orders and direct debits.
Make a list of: mortgage/rent; utilities; insurances; pension; childcare; loan repayments/credit cards; memberships. You may have others. Add these costs up to find the total amount you need in your bank every month to cover these outgoings.
Take the figure off your monthly income. What you have left is what will pay for necessities such as: food; petrol; bills that you don’t pay by direct debit — e.g. home maintenance; clothes; school trips; any other extras.
The remaining food budget money was then added to a Christmas saving envelope
Then there are the recreational activities such as: birthdays; Christmas; festivals/celebrations; special events; holidays; clubs; hobbies.
You now have a good picture of where your money goes. But how do you set a budget and implement it practically?
To keep it simple, I would suggest picking two or three savings categories from your ‘necessities’ and ‘recreational’ lists so that you are not overwhelmed — for example, food, petrol and Christmas. As your confidence grows, you can incorporate more categories into your binder.
Go through your highlighted statements. Can you reduce or delete any of your payments? At this point, I could see how much I was spending at the supermarket and knew I would be able to significantly cut my spending there.
I also looked at any direct debits that could be cancelled. Do you have a rogue gym membership, insurance you aren’t sure why you pay or a satellite TV service you never watch? Make sure every payment is interrogated and found to be important.
Once you have decided which categories you are going to include in your cash-stuffing exercise and how much money you can assign to each, withdraw the cash amount.
Yes, you heard me. Once you are in the swing of this, any bills and other payments that can be paid for in actual, real money — notes and coins — should be. Using the binder, divide the cash between each of your chosen categories.
When you buy food or petrol, remember to take the money with you and keep within your budget, buying only what you can afford rather than using your bank card to make up any shortfall. Repeat this process the following week. And the week after that.
This is a great start. Do not feel you need to rush on to the next stage immediately. It is more important to get comfortable with the idea of budgeting and cash stuffing in specific areas of your life before you move on.
Tapping away may be easy, but it won’t help when you want to assist the tooth fairy or contribute your change to the charity pot on the shop counter. We need to keep using cash when we can
If you would prefer not to spend the money on a binder, use paper envelopes instead and store them safely in a plastic folder. I know there are various different methods that people use, but I don’t get swayed, because the binder works for me.
It is good to keep it out of my sight line, too, well out of temptation’s way.
And that’s it. It couldn’t be simpler. On Monday, I will share more of my cash-stuffing secrets — including the vital importance of your mid-monthly ‘stock-taking’ day.
- Adapted from Budget Happy: The Win-Win Secret To Saving And Spending Money by Lisa Woodley, to be published by Quercus on February 28 at £14.99. © Lisa Woodley 2023. To order a copy for £12.74 (offer valid until March 11, 2023; UK P&P free on orders over £20), visit mailshop.co.uk/books or call 020 3176 2937.
How to make a £50 shop last all week
I am often asked to share my weekly shopping haul and I receive lots of questions about how I manage to stay on budget and make sure nobody goes hungry.
A food budget is one of my biggest successes since taking control of my money. If I stick to a routine of menu planning, strict ingredient shopping and pre-organised meals, I can stay within my budget and even have money left over at the end of each week.
I will admit I am not the most exciting cook, but my family enjoys simple meals such as pasta bakes, toad in the hole, roast dinners and spaghetti bolognese. It helps if you cut down on ready meals and branded items. I write the seven meals we will eat that week and ensure I have almost everything I need when I return from my Monday food shopping trip.
am often asked to share my weekly shopping haul and I receive lots of questions about how I manage to stay on budget and make sure nobody goes hungry
Each day I cook a meal we all like, knowing I have everything to hand. Some meal ingredients can be altered slightly to create a different dish, without the need to go out and purchase more food.
Take sausages, for example, which can be transformed into a toad in the hole, served with mash, added into a pasta bake or popped into a casserole.
Here is a typical week’s shop showing seven main meals and lunchbox items based on a budget of £90. The supermarket I use can remain anonymous and prices are constantly subject to change. There are a few larder items missing from the list because I will already have them in the kitchen.
Monday: Toad in the hole
Tuesday: Spaghetti bolognese
Wednesday: Meatballs and pasta
Thursday: Chicken fajitas
Friday: Crispy duck with home-cooked chips
Saturday: Chilli-loaded fries
Sunday: Roast dinner
- Meatballs £2.39
- Lean mince 500g £2.89 (for bolognese and chilli fries)
- Pack British pork sausages £1.49
- Crispy duck with pancakes £6.49
Fruit & veg
- Baby button mushrooms £0.89 (for bolognese and meatballs)
- Parsnips £0.62 (for the roast)
- Carrots £0.49 (for toad in the hole and the roast)
- Potatoes 2.5kg £1.09 (for chips with the crispy duck, mash for toad in the hole and fries with the chilli)
- Cucumber £0.69 (crispy duck, lunchboxes, snack for the tortoise!)
- Cauliflower/broccoli £1.19 (for toad in the hole and the roast)
- Red onions £0.72 (for bolognese, chilli fries, meatballs and fajitas)
- Curly kale £0.79 (for the tortoise)
- Mixed chillies £0.49 (for meatballs, bolognese, chilli fries, fajitas)
- Red grapes £1.75 (lunchboxes, snacks)
- Bananas £0.71 (lunchboxes, snacks)
DAIRY & EGGS
- A dozen eggs £1.49 (for toad in the hole and Yorkshire pudding for the roast)
- Semi-skimmed milk, 6 pints £2.15
- Olive spread £1.09
- Herb cheese spread £0.85 (sandwich filling for lunchboxes)
- Mature Cheddar £2.65 (to grate over fajitas, bolognese, meatballs and chilli fries)
- Yoghurts £1.19 (lunchboxes)
- Cherry yoghurts £1.47 (snack)
BREAD & PASTA l Medium loaf £0.39
- Garlic baguette £0.32 (for meatballs)
- Plain bagels £0.79 (lunchboxes)
- Plain tortilla wraps £0.55 (lunchboxes)
- Cheese-topped rolls x 3 £0.87 (lunchboxes)
- Fusilli pasta £1.25
- Spaghetti pasta £0.75
- Fajita dinner kit £1.69 (use a chicken breast from the freezer)
- Worcestershire sauce £0.69
- Diet orange cans £1.49
- Tropical juice £1.39
- Spanish tomato sauce £0.99
- Onion/garlic pasta sauce 0.69
- Stuffing mix £0.39
- Dog food £1.64 biscuits (tinned meat when needed)
- Toilet tissue £2.29
- KitKats £1.09
Grand total = £50.85
I put the remaining £39.15 in my binder for meat for Sunday’s roast and food shopping top-up towards the end of the week. This covers another pint of milk, more bread and anything that needs replenishing in the store cupboard.