Best way to budget please

[Iamaslummymummy]

We've always been a two income household but now we are a no person working household.

Now we get

Four weekly
dla for me and my son
Child benefit
Tax credits

Bi weekly
Esa

Weekly
Carers allowance (dh claiming this)

The question is how do I budget best to meet the direct debits that go out mostly on the first of the month (including the sect management plan with step change that I've had to set up) . Carers allowance is used for weekly shopping. I've read on here about ynab but I don't Understand how it would work in my situation. Can you advise?

[Iamaslummymummy]

Should read debt management

[Mum2Fergus]

Hiya, if it was me Id set up a spreadsheet detailing on a week by week basis what's coming in and what needs to go out. That should let you see where you might be short, or where you might need to change frequency of payments/bills.

[TheOod]

Dh gets paid similar to this & cb & my pay its all mixed up so we have a couple of accounts.

A- all the money goes into and a monthly standing order to B & weekly to C.

B- all the direct debits go out of

C- spending money


This means money can accumulate in A to make up the monthly pay without me looking and thinking we've got loads and spending it.

[lougle]

I use YNAB it allows me to budget to the penny regardless of when things come in/go out.

[tribpot]

YNAB is used by a lot of people with irregular incomes and income which doesn't match to the schedule of most bills (i.e. not monthly). This is normal in the States where people seem to get paid every other week or so (and where the software is made).

It would definitely be worth a look at it as it will help you manage those incomings and outgoings, and to save even small amounts towards the less frequent expenses which can kill any budget but which are particularly important when you're managing on a small income.

Have a look at their support videos - you can get a lot out of understanding the method even without using the software. The software costs $60 to buy, which may be more than you want to pay right now.

[lougle]

YNAB is free for 34 days, then £29.99 for the full version at Steam store.

[Iamaslummymummy]

Thank you. I'll have a go at the trial version tomorrow. It does sound like it might worth it. Is the £29.99 a one off fee?

[scarlettsmummy2]

Bear in mind you will be moving over to universal credit at some point next year so it will all come in one monthly lump sum as far as I am aware (although not 100% sure if this applies to carers allowance). Worth checking.

[tribpot]

The £29.99 is a one-off fee for YNAB 4 (no yearly subscription or anything) but whenever YNAB 5 comes out there will be an upgrade fee. There will be masses of time before YNAB 4 goes out of support though - YNAB 3 is still unofficially supported and in fact I gifted my YNAB 3 licence to a MNer not long ago (with YNAB's approval). So you shouldn't need to factor in any additional cost for quite some time.

YNAB normally pays for itself within a few months but it is quite a big initial outlay. I hadn't realised it was still cheaper in the Steam Store than elsewhere though, that's a bonus!

[Iamaslummymummy]

Sounds perfect. Haven't looked into uc yet much. I think as I'm disabled its different . Anyway I tried one of the online calculators and it wouldn't give me a figure. Head in the sand with that really

[AnythingNotEverything]

Is be tempted to follow a PP's advice and set up a few different bank accounts. This is dead easy, free and perfecto view everything online.

MartinLewis calls it "piggy banking" - you basically have a different current account for each element ie one where the money comes in, one where the bills go out, one for "spend money" (for luxuries), one for food/petrol spending etc. if you can work out what you need on which account and when, you can completely automate a system and ensure you always know where you are with money, and never miss a direct debit die to low funds.

I don't know YNAB, but for $30 I hope it's more than a spreadsheet you could build yourself!

[tribpot]

Yep, definitely not just a spreadsheet!

[prettymess]

tribpot I still use it every day.

[Iamaslummymummy]

I've just moved to the coop due to my dmp. I've set up a sole account each and two joint accounts. One for direct debits and one for shopping money. Will open a savings account as well for those payments that I'm saving for but don't pay each month. This is the first month of my dmp (well 1st December) so my outgoings will be greatly reduced as not paying the full monthly payments. I've been on MSE for years. Followed the piggy banking format and it worked (apart from our over spending). Just this drastic change in our employment /income is scary. Always got the fact that one of the benefits might be taken away due to the welfare changes.

[Iamaslummymummy]

Thank you all btw. Most appreciated

[tribpot]

prettymess - well done! I'll bump the YNAB thread so the OP can join in if she wants to.

[lougle]

YNAB is like infinite virtual piggy-banks

It uses the envelope budgeting model - imagine you have a stack of envelopes (categories in YNAB) and you write a title on each of them. You get your pile of money and put some in each envelope until you run out of money. You might decide to only put £10 in one envelope (Pub) and £60 in another envelope (Groceries).

When you've done that, you can see the impact of your spending decisions before you've made them. If you want to spend £20 at the pub, the only way you can do it is to pull £10 out of your groceries envelope and put it in the pub envelope, because you only take that envelope with you when you go to the pub.

That way, you can have a single bank account, but you know to the penny (in YNAB) how much you have available for something. You can have £1000 paid into the account, but if you have budgeted £995 of it for a new car, you know you only really have £5 to spend.

The crucial thing with YNAB is that you only budget what you have. So you don't look at what you think you will get in the month and allocate it all. You allocate it as it comes in. You think 'what does this money have to do until the next time I get money?'. When you're used to it, you can think 'ok, I need to look forward because week 3 is heavy on bills' etc., but you never allocate money that doesn't (yet) belong to you.

[Iamaslummymummy]

Right. I've got myself sorted on ynab I think. The allocating Money to categories as soon as you get it will take a bitof getting used to. Just waiting for some to come in now so i can allocate!

Thanks again. I'll be back I'm sure though with more questions!

[DeathByLaundry]

I YNAB. It's brilliant. Helping me see a small light at the end of a long tunnel.

[lougle]

It's really very useful. It does take a bit of committment to get your mind around the shift in thinking, but it's worth it.

[milktraylady]

Another one for ynab it's brilliant!
Totally worth the outlay, it will pay for itself very quickly.

[Living]

Can I jump on this thread? I'm just getting started on ynab and have a question.

Due to having budgeted badly (missed timings of incomings and outgoings and so have a large 'surprise' expenditure I thought was due next payday), I don't have any spare cash to put towards future big ticket expenditures / rainyday funds this month. However, I've worked out roughly what I think these are and how much I should be aiming to save for them. Is there a way to store this in ynab or does it just need to stay on my scrappy bit of paper where I'll forget about it in my impressive filing system?

[DeathByLaundry]

You can add notes to the category names. I do this a lot.

The ynab forums are really good :)

[Living]

Thanks. I've been looking at the forums but haven't really started using the software yet as payday should be tomorrow so there didn't seem to be much point!

[Mumof3teens]

YNAB currently on sale for £14.99 at Steam - until next week.