How To Be Careful With Money


Updated on 10 July 2018

Peppery Potato Soup

Most people have a trickle of money coming in, and a stream of money going out. If it was one of those maths questions from school, with water coming in from the tap and going out through the drain, the answer is that the bath is always empty.

The closest I have come to hunger was the night before one payday when all I had left was potatoes. I was spicing up the potato soup with pepper and the top of the pepper pot came off. I desperately scooped pepper off the top of the soup, but so much pepper got into the soup that it was almost uneatable. I had to eat it.

I have had some tight times. Most of the world’s population is only one payday away from real hunger and the likely loss of their home. We are much more fortunate than they.

Mr Micawber had it right!

Mr Micawber was a character in the Dickens novel David Copperfield. His famous quotation is

“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

The difference between one pound and 19/6d was 6d, or one 40th of a pound. The difference between happiness and misery was the difference between having 1/800th more than you need each year and 1/800th less than you need each year. If you are short of money you either go hungry or you make decisions which will impact on you financially in the future.

If you have to borrow on credit cards to buy food or to pay necessary bills, you are in deep trouble. If you can save a little bit each week, life is good.

Be Honest With Yourself

If you have financial issues, face them. Putting off the hard decisions until next month or next quarter will not make them any sweeter.

In some ways it is easier if the problem has landed suddenly through losing your job, marriage breakup, or similar. There is no disguising the emotional dislocation and the fact that your life has changed.

If you have suddenly woken up to the fact that you have problems, the likelihood is that you have habits and patterns of life you need to reassess.

If you live with a partner or a family, be honest with them. Explain that there is a problem, and share it.

The kids will not whine if they know the truth. Up until now the kids have treated you like a cross between a taxi and a cash machine. If you tell them there is no money unless they earn it, they will network and they will find jobs.

It really is not fair to your partner to keep them in the dark. If your relationship was based on your income and wealth only, it will end. If your partner likes you for yourself, the relationship will be stronger four years from now than it is today.

If you are worried that the neighbours will find out, tell them instead.

You are “retrenching”, “adjusting”, “being rational”, or any other description you wish to use. If they think less of you for that they are not very good human beings. They do not deserve you, so do not worry about them.

Increase income!

The most obvious route to make money is a job or an extra job. Most of the jobs readily available involve working unsocial hours, and pay badly.

In the catering industry there is often a practice of feeding the workers, so you get a free meal each shift – reducing your outgoings. Taking such a job has two advantages. One is that you are not spending money while you are working. If you are likely to be in a bar on a Saturday night, get paid to be there by being bar staff or a paid musician. You gain twice, once because you are not spending money and second because you are being paid. Security jobs often involve long shifts but virtually no work.

The other advantage of the second job is that you learn about an industry, you gain a new set of skills and experiences for your CV, and you meet more people. More people is more ideas and more information. Something might add to information you have from your day job, and give you an idea.

People have made secondary and even primary sources of income from dog walking, cat sitting, gardening and decorating. I am not talking “interior designer”, I am talking “up ladder with paintbrush”.

Many people think there is something demeaning about cleaning, and cleaning for other people is even more demeaning. The upside is that there is usually cleaning work out there.

Increase income at home

If you cannot get out easily, perhaps because of childcare commitments, look at home working. This usually involves some form of packing. It pays desperately badly, but you can do it at any time of day or night.

The first “Harry Potter” book was written by a woman living on social security.

Very few people have the confidence and grit to spend months writing a book that may never sell. So start off by writing and selling short stories or short magazine articles.

Can you earn money by ironing or childminding? I know a woman who earns extra money by making samosas for a few local Asian restaurants. Samosas are fiddly to make, and take up time and space in a hard working kitchen. Is there anything you can cook?

Have you any idea how hard it is to obtain really good croissants? If there are people around with the money, you can build up a Saturday morning and Sunday morning croissant round or supply your local delicatessen.

There are many people who quite literally cannot make a dress, let alone make it well. If you have this skill you are unlikely to be short of work.

Can you do basic bookkeeping? If not, go to the library and read up on it. Build up a round of self employed men who once a week dump at your house an envelope of receipts and copies of a few invoices. The next morning they wake up, look at their emails, and there is their accounts broken down weekly, monthly, and quarterly together with a list of the invoices for which they have not yet been paid. You could even add the customer telephone numbers or for an extra charge telephone the debtors yourself.


There are people around who need temporary accommodation for part of the week, or all week. Can you double up the kids to generate an empty room?

Charge extra for meals, or include meals, Make sure you charge a deposit and take rent in advance. B&B stands for “bed and breakfast”, either for working folk or for holidaymakers.

Remember, you are not a social service, you are providing a clean room and meals to a worker.

You can clear out a room, hold a garage sale with all the stuff you are throwing out from the house generally, and use the money raised towards buying food.

Saving Money

This may sound unduly simple, but the best way to save money is not to spend it. As a student, I never went into a bookstore with my wallet because I could not trust myself not to buy books. If I wanted a book badly enough to go home and fetch my wallet, then I bought it.

What is your biggest outgoing?

Your housing costs are probably significant. Can you either move somewhere cheaper or take in a lodger? Can you go to your lender and negotiate “interest only” payments, a longer term, or some other way of lessening the monthly payment? With rent there is much less flexibility, but does your landlord need a house painting or a 24/7 caretaker or a rent collector?

Your annual holiday has obviously gone. If you own timeshare either give it away or start booking resorts near golf clubs and sell the bookings at the local golf clubs.

Do you need a car? I know that to many people this is almost an indecent question. Do you need your current car or could you trade down to a vehicle that no-one is likely to steal? That saves you monthly payments and makes the insurance much cheaper.

In these deskilled days, many people do not know how to cook.

In the supermarket, when my trolley has flour and sugar and butter and eggs, other trolleys are filled to the brim with ready made meals, biscuits, cakes, frozen Yorkshire Puddings, and convenience food generally. People are paying through the nose for the convenience. Ask friends to lend you cookbooks, or buy them at the second hand bookshops or charity shops. Or use the internet for recipes.

Vegetables are relatively cheap. Paprika, turmeric, nutmeg, and oregano are relatively cheap. But do not shake them into the soup.

Shop at markets, because markets are usually cheaper than supermarkets.

Towards market closing time, the stall holders will often sell vegetables cheaper rather than take them home.

Some supermarkets have a rigorous rotation policy. I went into a supermarket late one evening and I found cheese was less than half price because they were trying to get rid of it. That often happens with fish towards the end of the day. Find out from a supermarket worker what time bread cheese fish vegetables etc are sold off cheap.

Do you celebrate Christmas? This year everyone is going to make small parcels of flapjacks or cookies to give to each other. That’s it.

If you give to charity, don’t stop. Their need is greater than yours and unless you are a saint or a tither the money you currently give to charity will not be significant against the weight of your troubles.

Credit Card Debt

Oh dear. Add it up. All of it. And your partner’s credit cards and store cards. It is a lot.

It may be so much that you have to default. If you have a local Money Advice scheme make a booking. According to the laws where you live they may be able to make a deal that is amazingly better than you had realised.

If Mum or your sister will part with cash, the Money Advice scheme may be able to do deals where the creditor takes some cash and writes off the rest.

Don’t you negotiate it, because you are emotionally involved. Get someone else to make the phone calls.

If it is bad but not awful, list the debts according to the interest rates you are paying. Clear the most expensive ones first.

Many banks will agree to a consolidation loan where you take out a loan over three years or five years. You use the money to clear the credit cards. Your credit rating is still good, and the interest rate is much less than you are paying on credit cards. Usually an extension on your home loan is even cheaper.

It is not fun

The hardest part is to recognise that there is a problem and that it has to be dealt with today. Next week would be better because something might turn up.

Mr Micawber ended up in a debtor’s prison because he did not deal with his problems. He always hoped something would turn up.

If you face your problems you will usually be able to overcome them. If you do not face your problems they will be worse next week. You will eventually lose your home and probably your partner.

Your future is in your hands.