want to get a hold on finances?!help

[Helpsortshit]

Posting here for traffic really!! I need to get a more solid hand on our finances. But I can’t figure it all out as there are so many bloody variables!!

So here it goes! I work as a teacher (substitute at the moment so pay fluctuates) it works out 150 per day after tax.

DH pay somewhat fluctuates because of expenses but is ballpark 3.4k per month

Childcare ALSO bloody fluctuates As DH is home for weeks at a time so no childcare needed when he is home. Also they don’t bill us weekly! In fact I’ve paid one bill of 240ish since January...because I asked for it 😂!

Electricity bill is every three months (not a set amount)

Rent (temporarily) and insurances add up to approx 1050

Phone bills x2 are monthly and approx 70 so that’s fine.

I’m going to be honest I just want to have a set knowledge of incoming vs outgoing but I can’t seem to get a solid monthly figure!!

Now my mind has gone blank I can’t remember if theirs anything else I need to pay monthly or not! (This may lead to a drip feed if I think of anything 😂)

Everything else is food/fuel etc

How do I try to calculate a monthly “budget” to work with as their are so many variables??!!

[Helpsortshit]

*There

[Birdsgottafly]

You start with the fixed ones.

Then you do averages for things like electricity. I pay a fortnightly amount that covers me for the year.

The rest you can look back over last year and work out a monthly average.

[Nat6999]

Go on Moneysavingexpert.com there is a budget planner on there. Put down everything you have coming in & going out, it will help you get a budget sorted & advise where you can save money.

[Helpsortshit]

@Nat6999 ooh thank you I’ll have a look at that!!

@Birdsgottafly that’s my problem though there’s not much that’s “fixed” I wonder should I just work on a month to month basis??

[Dontsweatthelittlestuff]

I have everything set up to pay monthly
Tv licence
Community charge
Insurance car and house
Gas
Electric
Phone, broadband and cable
Charity donation
I am mortgage free so no housing costs
This gives me a monthly figure of set out goings
Then I have a savings pot to cover the variables like car and house maintaince, vet bills, Christmas and if any spare a holiday.
I set myself a food budget which I try to stick to any excess stays in the pot for any overspend in another month or to build up for Christmas.

I have a set income from pension, partime work and investment interest. Very little variation from month to month unless it is time to reinvest the income bonds.
There is a little leeway in the finances as every penny is not allocated but I do find it helps to know my set out goings.

[Helpsortshit]

@Dontsweatthelittlestuff yes we save quite a lot and then pay car insurance and tax I. Lump sums so again I am unsure if I need to factor it in or not?? No car payments either.

Also no tv...so no license

[Birdsgottafly]

Your rent and some other things must be fixed?

If you can afford to, work on an average. I overpay my utilities over the warmer weather, so I have no scary bills after Christmas.

Just be ruthless with unnecessary spending, ask yourself if you really need something and see how things are.

[Helpsortshit]

@Birdsgottafly yes rent and life insurances and phone bills are fixed.but I think that’s it.

[Helpsortshit]

It’s not that we overspend I just don’t “know what is incoming or outgoing on a monthly basis. And I just wanted to get help to try to even it out so I can have a ballpark monthly figure, everytime I try I get annoyed. I think I may just have to sit down once a month and figure it out.

[lidoshuffle]

Get together all your bills etc for the last year, add say 10% for uplift/inflation and divide the sum by 12 for a monthly figure for the coming year. This'll balance out the peaks of seasonal and one-off spends.

As a PP suggested, the posters on Money Saving Expert are a great resource; try the Debt Free Wannabe pages for spreadsheets for budgeting.

[Helpsortshit]

@lidoshuffle last year was a completely different situation unfortunately so it wouldn’t be a true reflection I suppose! 🙈

[Helpsortshit]

@lidoshuffle will check out the debt free wannabe that I you

[Helpsortshit]

*thank

[bridgetreilly]

You need a sinking fund in your budget. That is, an amount you allocate every month to go into a fund (could be a literal savings account, or just a ring-fenced part of your current account) that is used for the unpredictable/annual expenses.

The way you work out how much your sinking fund needs to be is a bit tricky. You could start by looking over the past 12 months to see how much you needed for the non-regular bills. Include things like car and house maintenance as well as childcare. Get the total and then average it into a monthly amount. If you know there are significant changes coming up (e.g. an additional child going into nursery, or whatever), amend your amount to cover that. Then, if you're me, add an extra cushion to your sinking fund allocation just in case.

Treat your monthly sinking fund as you would any other monthly bill. It is a regular payment which must be made. Once you've done that you'll know the regular outgoings that your salaries must cover - rent/mortgage, regular bills, sinking fund.

Then you'll need to work out month by month how much disposable income that leaves you with. Again this is tricky when your income fluctuates. Try to be cautious. On the months when the income is higher, set some aside. On the months when the income is lower, still try to live within that month's income if at all possible. That will mean you gradually build up a cushion of savings so that if there comes a totally disastrous month or two, you don't have to go into debt for them.

Good luck, OP! It's much harder to do this when your income/expenditure is so unpredictable but in some ways it's much more important.

[Helpsortshit]

@bridgetreilly wow thank you! Would one account be enough or would a “sinking fund” for separate expenses be necessary so example one for car insurance, one for childcare etc? We are not in debt thank god but I just have no idea what goes in or out and I feel “lost” with it!🙈

[bridgetreilly]

I wouldn't separate out all the different things that go in the sinking fund BUT you do need to start keeping a budget (not just bank statements) which will show you where the money is and what's allocated to the sinking fund as well as what money is available to spend on other things. In the budget you'll have a list of what the sinking fund is for, what you've estimated for each item, and then you'll update it whenever you spend the money with the actual amounts.

There's a ton of youtube videos showing how you can budget family finances. Some show you how to set up a spreadsheet, others use a paper system, some will separate every little thing out, others less so. My main advice is just to start and then you'll develop a system that works well for you and your family.

[bridgetreilly]

[lidoshuffle]

I only have one account for all my future committed spends, but I bung on a spreadsheet how that amount is made up and update it every month as money goes in or is spent. I have a dentist, car, household maintenance, treats, and holiday fund on top of my usual monthly outgoings.

If needs be, I occasionally "borrow" from one fund if there's a big expense in another, and pay it back over a few months.

The Money Saving Expert posters seem to think the 'You Need a Budget (YNAB)' website is a really good thing.

[Wild123]

I would change your gas and electric to a set monthly payment and regularly submit meter readings.

I would also open a tax free chilcare account (i did it online last night which took me approx 15 minutes) you can set up a monthly DD to put into that and then pay your nursery from that account (for every £8 you put in the government tops up with £2).

[Helpsortshit]

@Wild123 is that uk? We’re not uk so unsure if that childcare account is an option😢

[Wild123]

Oh damn yes it is in the uk sorry

[Helpsortshit]

@Wild123 no worries 😂

[MaverickSnoopy]

We also have sinking funds - had no idea that was an actual thing or that they had a name! We have a spreadsheet that tracks it all.

First tab: income and expenditure. Expenditure broken down into fixed costs and variables. Where you don't know a fixed cost you estimate. So I estimate gas and electricity to be £110/month. Variables are things like birthdays, car costs, Christmas, clothes etc. The variables amount gets transfered to a separate account and tracked on tab 2.

Second tab: lists every variable amount. Say I transfer £400 in a month, that will add up over the months. You'll never spend all of it each month but you'll always have enough to cover the things you need.

I have lots of tabs and lots of accounts but that's how it works for me and it's grown over time.

[Alexandra2018]

Go through a bank statement for a list.
You've got rent/mortgage council tax.
Travel, loads of car costs or a bus pass?
Use 3 months worth
Debt repayment
Kids spends clothes treats?
Dinner money
Water, tv internet gym
My list is never ending

[Helpsortshit]

@Alexandra2018 yes that is pretty much my list of expenditures I just need to average them out it seems. I do have ever budget for treats and clothes etc. but I will start I think 🤔