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Why do i never have any money...???(110 Posts)
This is my first post but I have been a long time lurker, husband and I have been wracking our brains to work out exactly why we struggle so much financially.
This is not something we can talk to openly to our friends as finances are obviously personal, and I have gained alot of advice from this site so far...
Husband income after tax PCM: 3,400.00-3,600.00
My income after tax PCM: 900-1000
Mortgage, council tax and utilities: 1,800 (on a very high interest rate due to end in September so will lower dramatically we hope)
Car loan: 130.00
Credit card: 100.00
Next directory: 50.00
Food: approx 600.00
Nursery fees: 300.00
We are overdrawn at the end of the month by £2,800 – is this where we are going wrong????
We go out once a month if that, hardly ever buy clothes, we get the end of the month and we literally have no money and have to borrow at least 200 from my mum and pay back we cannot afford a holiday this year, we really are very tight and get bargains on everything, i never buy new make-up, etc.. its depressing
We are so frustrated as we both work very very hard and when we work it out it seems we should be comfortable not skint
We must have totally over-stretched ourselves with our mortgage but ironically we have had the same mortgage since 2007 and managed when I was on mat leave and husband income was at l east 400 less PCM.
I could bang my head against the wall!
Thanks to those who can help or see where we are going wrong...
Teenage tantrums - there is no way i could get it down to 50.00 - can that really be done??
I have to children 2 and 5 - i would love to reduce it. the figure i put is maximum but never any less than £400.
You are used to being in OD - it becomes 'normal'. I would consider putting OD onto 0% CC and then making every effort ot stay in the black on your current acc.
make conscious daily decisions to live within your means.
Have a separate saving account to pay something into each month to build up a big bill/emergency fund so you have cash there and don't need to use CC for future surprises, large gas bills etc.
Noticed there is nothing in the budget for petrol; how much is that? What about your travel to work? Are you doing 'top up' shops? £20/£30 here and there midweek really adds up. Gym memberships? Insurance for car/house/illness/death? What about your lunches at work? Does your DC require packed lunches (they can add up)? Do you have Sky TV? Mobile phones? Broadband? Landline?
These were all things I didn't see specifically mentioned in your breakdown, although you might have them included.
We pay out on:
Worth comparing your list to mine to see if you're missing any outgoings?
Ah, cross post OP; sorry.
My sky bill is actually closer to £92 a month because we get broadband and landline through them. So do check what your last bill actually was! They have put their prices up twice in the last year.
thanks again - some very usuful tips on here i really appreciate it.
husband's expenses are definately on his company card.
i have also forgotten to take into account my son's swimming lessons which is 24.00 a month, not alot but i guess all this small amounts add up.
i have also realised alot of things come out of our everyday current account and some out of our bills account so its getting a little mixed up.. i need to get organised on that front and have just txt husband for him to do this with his mobile phone and sky
Rent - mortgage 1,500
Council tax 155.00
Water 25.00 or therabouts
Electric - gas and elctric combined £105.00
Sky package - 80.00
TV licence - i cant remember off top of head...
Mobile phones - around 60.00
Nursery - 300.00
Food - 400.00 minimim-600 max
Life insurance - dont have any or its included in salary
Contents insurance - 35.00
Car - 130 car loan, 175 car tax per year
Petrol - 40-50 per month
train tickets for work: 112.00 pcm
we dont smoke and dont drink, dont go out rarely, probably one costa a week and make my own lunch for work.
You can put an overdraft on a credit card, it's called a money transfer and there is usually a small fee circa 3%
If you can put it on a 0% card it would definitely save you money but you have to be really strict with yourself about not using the card for anything else
Ok, that's £371 extra you hadn't accounted for in your OP, assuming your tv licence is on a monthly DD and I haven't taken into account your car tax; assuming that's a 6/12 monthly bill?
If you go through your bank statements now (both of you; DH might pick up 'a few bits on his way home' sometimes??? Mine does!) what were the dates and how much did you spend in the supermarket each time?
If you have a smart phone try looking for the app spendometer. It's really simple & can give you a way of keeping track of the small spends. EVERY time you buy something you enter it & it keeps track of your spending.
OK, I harp on about it a lot, but you should really consider downloading the trial version of YNAB here to see if it helps you. You're at an ideal time in the month to give it a try, because it's a 34 day free trial and we're just a few days from the end of the month.
It's an envelope budgeting system - you'll be starting from the beginning, allocating money to envelopes (categories) as it comes in, then spending from that category, etc., so you'll be in charge of your incomings/outgoings. It's quite revolutionary for the vast majority of people who try it.
It's also cheap if you find it useful (£30, but sometimes steam have a sale so it can be as cheap as £7.99) and there is a free app for smartphones to go with it, so you can track all spending.
Thanks again for the advice.
Will look at the app but don't really wanna have to pay for it... Maybe I will start with writing everything down and using cash and see how feb pans out. Typically I have my sis-in-laws birthday as well as my husband so another expensive month.. Plus car tax and MOT due! There is always something to pay out for an no savings to help with these things which is another thing I need to get organised with.
I am also using up everything in fridge and cupboard before doing a food shop.
I am determined. I used to always have savings and now we cannot even save at the moment.
Try the PocketMoney app (for iPhone-assume there's an android version too) and write down EVERYTHING.
log into your online banking and check direct debits and standing orders
print the list
print the last month's detailed transactions, match those two list up
mark cash taken - who took how much and when
look at individual items paid from each of accounts and look at receipts in your handbag
don't forget all those christmas gifts you bought in December
in the end you can identify each, it will just take time...
you don't need an app - just a small notebook for writing where yout money go daily
for a month
this will help you to identify where money go
does "petrol" include your commute to work?
you haven't mentioned any outgoings for clothes and toiletries
double check that you aren't paying for old subscriptions via PayPal
You absolutely don't need to buy the software, or any software, to manage your money. However, I suspect that the amount of people who can maintain the commitment to writing down every transaction manually, putting it into a meaningful format and working out what it means for them, is low.
With YNAB, I can have one bank account, but many, many 'savings pots' just by having somewhere to record which bit of my money is going to be spent on which thing. A balance of £300 can be split 100 ways if I need it to be, so I am absolutely certain where I am at any point in the month.
I don't think £30 is a lot to spend as a one off payment, especially as they give a 34 day free trial so people can see if it works for them. But perhaps I value my time more than some
Actually, I think paying for everything with cash is dangerous as that could be where you are going wrong now, lots of little withdrawals spent on things like a top up shop (that you therefore don't log in your real monthly food spend).
I'd say do your food shopping on line (no grabbing cakes as you walk down the bakery section, and I find it easier to properly compare prices), meal plan well (make sure you have every ingredient for each evenings dinner, so your not just popping in Tescos for some cream or spinach, you might need only one thing but it's rare to leave with only one thing).
Decide what your personal "fun money" is for the week/month, you might find once your putting things on cards rather than taking out cash 3/4 times a week, you can see a pattern in your spending. If you are saying now you can't see where the money's gone, I'm guessing you do a lot of your little purchases in cash, which add up but makes tracking them harder.
Another thing I noticed, there's no "grooming costs" in your budget, hair cuts for a family of 4 can add up. (Waxing isn't cheap either).
OP do you always buy your food in the same place - can you check back through last month's transactions and see how much you spent?
When I did this I was surprised to find I was spending about 30% more than I thought I was. My weekly shop was £x amount, but I was spending dribs and drabs through the week on fresh milk and bread and fruit etc.
You haven't allocated anything for children's shoes and clothes in your budget, that could be more than you realise.
I've just totted up all the different expenses you have mentioned an amount for here - and got £3326.
Deduct that from the minimum salary amounts you put in your opening post and you have £974 spare. Which is a lot different from £1500.
Out of that you are paying for birthdays, christmas, car (repairs, MOT, servicing, new tyres, insurance??), clothes and shoes for the children, new and replacement items for the house. Plus any treats or extras.
And I know you say that you and DH don't buy clothes, but you must buy some things. As a minimum you both need smart and presentable clothes for work I would guess? Shoes and a winter coat?
And yes haircuts.
Does anyone wear glasses or contacts? Are you or DH on any regular medication that you have to pay a prescription charge for? School trips or any other school costs?
Basically it boils down to the classic problem which is that you aren't allowing for one off expenses that can't be put on a direct debit and aren't a big regular part of your budget like food shopping.
Well, you initially thought you had £1500 spare. With those bits taken off that I added up extra; you have £1129 spare, actually. If you do an extra 'top up shop' of £25 a week; that's another £100 gone. So you have more like £1000 left.
A car tax and an MOT, or another expense like a birthday will eat up half of that. Then you're left with £500, or less if you're not careful.
Effectively, you are eating into what you could be saving with every unexpected bill/event you have.
It soon goes. It's really hard, isn't it? But your DC will be out of nursery soon; that'll be £300 per month extra; not insignificant. Perhaps separating your food money/budget into a separate account with a cash card might help? Or getting the money out physically to make sure you're not going over budget? Or putting it on a gift card? Internet food shopping is a godsend too, to make you sure you don't spend too much.
And overdraft charges are ridiculous with some banks. My husband went overdrawn in an agreed overdraft when he initially set up his business; totally planned, he hadn't paid himself yet and had some extra expenses. He went £2,200 in and got charged £38 in interest. Plus the £12 account charge, that's £50!!!
He'd have put it on his credit card but the silly bugger lost it and had to order another card <eye roll>
I realise this is very basic but I have used this budgeting for years, plus I do a computer spreadsheet but like other people have said, you need years of looking through monthly outgoings to be able to budget - I write every outgoing in a book so each year I know what bills are due the following year as it is always similar eg car insurance, tax, house insurance, etc. I know what bills are due each month and deduct this from salary. Then take out budget for petrol, food, transport, clubs, hair cuts ( ours for instance is £1500 per month). I will add extras if needed, then the rest pays off credit cards or is saved. I am then really strict about keeping to the budget, hope this makes sense!
Do look at the budget planner on moneysavingexpert.com. Come op with a monthly budget which doesn't just cover your monthly bills but the yearly ones too. By which I mean MOT, car tax, servicing, new tyres, birthday parties, presents, Christmas, clothes, shoes, school uniform, holidays etc etc. I put money aside each month for these things.
Keep a diary of all your spending. The trip to sort play, swimming, coffee & cake all adds up. £600 for groceries is high. Ours was about that. Switched to Aldi in August and is now £350-£400 & that includes formula and nappies. Morrisons now seems really expensive. The price difference is stark....59p vs £1 for a head of broccoli, 95p vs £1.85 for 3 peppers.
Sympathies OP but don't let the relatively large sum be an excuse for inertia! Up thread Fiarylea and someone else mentioned moving your overdraft to a credit card, I certainly get direct mail from Virgin - usually cash advances are more expensive but it seems for a while Virgin have had an attractive offer which is cheaper than an overdraft. You need to check your credit score to make sure you are squeaky clean lending wise - and cut up the card and set up a standing order for a fixed amount. If you are lucky the 0% is for 12 months but sometimes 18 months. Be realistic about paying it back; you can always shift it again. Hereafter you should budget to save money and earmark money for a holiday/gifts/maintenance eg. Boiler service.
I have an Excel spreadsheet with a rolling month by month projection of spending. I pay:
Bank Account fee
I reckon we both have £500 each left after the fixed costs and we spend it all! My part goes on school lunches (only 3 days per week for 1 DC), school trip, music lessons, bus fares (over & above normal commuting costs which are deducted at source together with pension), clothes. In fact I am finding it's not such a great idea to pay for Christmas out of December's wages! I decided to ring fence the savings for some thing special so I am having lots of NSD (no spending days) til payday. DH has more of a fritterers habit and doesn't even do himself a packed lunch!
At least one of you needs to keep an eye on the ball! I found it easier not to have a lot of cash on me. If I buy something (even at the corner shop) I always ask for a receipt and keep them together in my bureau. It's evidence but I don't feel bound to analyse every penny.
Your DH must be a higher rate tax payer; is he maximising the tax efficient benefits he's entitled to such as nursery vouchers, pension and charitable giving? Another useful benefit is flexi-leave, I can buy 5 extra days and the cost is deducted from monthly salary gross x 12.
Another thought is that your income/costs are very round numbers; are you 100% sure you are not being overly optimistic...? Ie rounding up salary, rounding down costs?
Keep us posted! There's brisk traffic on this board and I am enjoying reading about people's progress.
Thanks all - I cannot thank you all individually but every piece of advice has been fantastic, I am amazed at how organised you all are with your finances - its really inspired me!
This week, I am going to go through november expenses as it is more realistic than december due to christmas and DS birthday.
I am then going to tell you all and see what you all think! Honestly.. This is such a huge help!
As for grooming.... I am so low maintenance its unreal. Hair cut every 6 months, die my own hair, I don't wax only when I go on holiday (not this year unfortunately). I do my own nails,etc etc...
Thanks all - loving mumsnet and its only my first post!
Message withdrawn at poster's request.
Another convert to YNAB here - it's a really easy and transparent way to keep on top of your finances - just a few mins every couple if days and I know exactly where we are. We bring in good money but were always running out - we weren't accounting for one offs like MOT or house insurance or Christmas or quarterly utility bills so spending and then finding we didn't have enough left.
I now have YNAB set up to record monthly DDs plus a monthly allocation to irregular costs which I sweep into a savings account. For example, my house insurance will be about £500 in Oct/Nov so I'm currently setting aside £50 a month into savings to pay for that so it doesn't surprise us. Previously I'd have thought that £50 was free for a day out with the DCs or a meal out with DH then panicked in Oct about where the insurance money was coming from. I can't recommend planning these irregular expenses into your monthly budget enough. I've already started saving for Christmas - I used to not do anything about it until November! We feel much calmer about money now and are really on top of every penny.
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