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Right! This is what I earn, tell me how to budget and save because I am a complete money disaster!(63 Posts)
Ok here goes!
Between dh and I we have £2600 AFTER rent/council tax every month.
Out of this £2600 I have £600 direct debits (gas/elec/car/life home car ins etc) this leaves us with £2000.
I prob spend about £100 on petrol and the rest completely disappears! I am always up to my £1200 overdraft limit.
I HAVE NO SAVINGS!
Am fed up of living like this, we should be able to manage so much better than we do.
Starting wed (payday) it's all going to change.
I can't get better deals on my £600 direct debits and can't really decrease my petrol costs so what I would like advice on is
1/ how much should I be budgeting for food/clothes/birthdays every month
2/how do I go about decreasing the overdraft (I.e £100 a month or get rid before I start saving?)
3/ how much should I try and put away in savings every month?
There is dh and I and 3dc to feed, one still in nappies!
Get a small book and start writing down everything you spend in cash.
Get your receipts from food shopping and use a spreadsheet to work how much you are spending on food/alcohol/gifts/clothes/crap
Every evening you need to update from little book and receipts what you are spending to work out what you wasting it on (servicing your overdraft debt I guess?)
Start meal planning and just buy what you need at the supermarket no extras.
so you have £1900 clear each month
out of which food / nappies should be about £5 - 600 being generous
and say 400 frittering money
you should be able to clear your overdraft in 2 months
1/Food £400 per month for three adults (dh, I and teenager) is what I tend to spend. Clothes - maybe £150 a month? Obv. I don't know how old your children are and how fast they're growing/how fashion conscious they are. Birthdays - £100 to £150 per month.
2/Get rid of overdraft before you start saving unless you have a very low o/d charge and/or a high savings rate.
3/ I save 20% of my personal income per month into an ISA, dh saves considerably more as he pays for all big ticket items like holidays, cars etc.
Sorry, just seen ages of your kids - you may need to increase clothing budget unless you're happy to use second hand clothes.
I could actually cry looking at these figures. How on earth do I waste so much?
I prob spend about £700 in tesco every month, I can't pop in for a top up shop without spending £30-£40
Liking the book idea, am I better to withdraw say £150 a week to last for food/petrol or just use my card?
That seems a lot of money. Why would you need to buy clothes every month?
Whether to pay off the overdraft or put into savings first depends on the respective interest rates. So if you would gain more in interest from savings than you would pay in interest on your overdraft, focus on the savings and pay overdraft off gradually. That's unlikely at the moment though as savings rates are low.
Hopefully someone will come along and advise you on food budgeting soon - but it is hard to see what you are spending it all on. You could try keeping all your receipts (and making a note of any cash purchases/withdrawals) and then looking at what you spend where.
depends - can you discipline yourself without just using cash?
We have 3 dc that live with us and 2 cats our total monthly spend on everything bar mortgage/househould bills etc is around £1200 on average - I stick it all on the credit card and then pay it off in full each month no overdraft etc
Oh, cross posted! It sounds like a lot goes on food then. Definitely meal planning and making a list helps with this!
You have 1900 disposable income each month and you can't manage? I'm sorry, but that's stupid.
You need to write down everything that you have bought/spent money on in the next week and have a good look at it all. You're obviously wasting money somewhere.
Do you buy lunch every day? If so, make a packed lunch.
Do you buy a coffee at Starbucks/Caffe Nero/Coffee Repubic every day? If so, just think how much that is costing you.
Are you buying magazines regularly? These can cost a fortune, so try and stop this - why not borrow ones from a friend - or try and read them online.
Don't buy any new clothes until you have cleared your overdraft. I'd bet a lot of money on you already having a wardrobe of stuff you can wear.
Start to meal plan, so you don't have to do any top-up shopping.
When you do your shopping, do you buy premium brands/premium OL, such as Tesco Finest/Sainsbury's Taste the Difference? Drop down to the next level and you will save around 33% (moneysavingexpert.com have analysed this). If you already buy standard brands/OL, drop down to value/basics - again, you will save around 33%.
Use vouchers, and special offers - but use them wisely. No point doing a 3 for 2 on stuff you don't really use - but offers like 3 for £10 on meat (currently running at Sainsbury) can save you a lot of money.
Work out how many meals you can cook next week out of the current contents of your cupboards and freezer, rather than buying more stuff. I bet you have stuff like pasta/rice/tinned stuff that can be turned into a satisfactory meal or two.
Do you have any stuff that you can sell? Do a car boot sale or e-bay stuff.
And forget about saving until you've cleared your overdraft. No need to put more pressure on yourself.
Oh, and another thing - often being in debt is not so much to do with actual money but your cashflow. So, for example, do you re-fill your petrol tank when the tank is about a quarter full? Let it go right down until your warning light is flashing, and then fill it up - you can probably get another couple of days driving out of the petrol you have, and you've saved yourself spending any money for those two days. This is especially helpful around payday.
What worked for me was shopping just once a week except for bread and milk. I would take out enough money for the week and any paper money that was left would go away. It has been dipped into for extra expenses but also used for odd treats. I intend to go back to this way of managing once the kids are back to school.
Ok so will meal plan on tues night for shopping wed and stick a notepad on my shopping list.
I don't think i can be trusted with my card, I will pop extras in the trolley so might take cash and leave the card at home ( will be the first time I have ever done this!)
Dh is a complete and utter food machine, there is no filling the man but he is away next week living of army rations so that will give me a head start
We don't live frugually either IMHO but I don't buy lots of new clothes - charity shops/hand me downs/car boots etc. My hobbies are dancing/exercise which is £25 per week :-0 and dining out with friends.
I know it's stupid, that's why it needs to change!
Dh and dc both take pack lunches already.
None of us buy expensive take away coffees.
I buy one £1 mag a week.
I buy a lot of own make foods.
It seems to be how much I buy rather than what I buy if you know what I mean. I have never seen anyone leave tesco with the amount of bags I have.
I did try meal planning once and I remembered it making a difference so that is my new mission
If he's constantly hungry it could be worth looking at his diet. Is he living on a lot of carb-heavy foods? Pasta, rice, bread type stuff? Whilst these foods are satisfying in the short term, they don't satiate the body in anyway the same way as protein or fat.
Meat, fruit and veg are expensive. If you cooked a whole chicken how many meals would you make it last for?
I no longer let DH eat loads of meat for one meal.
1 chicken=1 meal
1 huge packet mince= 1meal
You get the idea.
It sounds like you are spending very easily and so whilst the cheapest way to buy your weekely shopping definitely involves going into the store and shopping the bargains, in your position I would stop going to the shops initially until you get used to living on a lower budget. Do an internet shop and you will be able to meal plan and ensure you only buy what you need. There are loads of codes floating around. Ocado are particularly generous with their offers for new customers.
I also agree with checking exactly what you have in the cupboards already and seeing if you can use up the things you have. You should however easily be able to do your supermarket shopping for £100 a week including the nappies and other toiletries.
You need to clear the overdraft and so a couple of months without buying clothes/CDs/treats in general is definitely called for.
Forget the saving until you have cleared your overdraft. The rates are rubbish at the moment for instant access savings accounts.
There's a lot of good advice here already. Meal planning is essential in your case I think - make a list before you go shopping, buy that and no more. It should be possible to feed your family easily for 120 a week, and you could cut that down by a lot if you stick to cheaper brands.
Pay off your overdraft before you start saving, then ask the bank to lower your limit or cut it off entirely. Overdrafts charge a ridiculous amount of interest and are a complete waste of money. With £1900 in spare cash you should survive very very easily without an overdraft. Cutting it off will force you to save as you know that once the actual money is gone from the account, that's it, it's beans on toast until payday. Very motivating!
Do you have credit cards? If so you should switch to one that has a 0% introductory rate and pay it off as quickly as possible. All interest paid on borrowing is completely wasted money.
Out of interest, how much do you tend to spend on clothes each month? It might be worth setting a three-monthly clothing budget (especially as you have a baby who more than likely grows out of clothes every ten minutes) and sticking to it. That way you cater for each season but you don't splurge on unnecessary bits and bobs.
Good on you for wanting to change things, saving is very satisfying! (I am an obsessive saver )
Meal planning is the way to go - way less stressful to only plan menus once a week. I find doing shopping online saves me a fortune, much easier to stick to a list when you a tapping it into a computer than wandering round the supermarket. Worth doing a shop on mysupermarket.com - it compares the price of the shop at tesco/asda/sainsburys/ocardo - quite shocking how much more expensive the later two are. Top up shopping can cost a fortune - one month I spent £300 at our local co-op
Lidl is also worth a visit..
Nappies can be really expensive - supermarket branded are much cheaper and work just as well..
Writing out a budget really helped me out - just being aware of how much I wanted to spend on stuff each week rather than crossing my fingers and hoping there was enough left in the bank made a massive difference.
Meal planning is definitely the way to go - but try and run down your cupboards/freezer as well. I try to do:
1 meal from the cupboard/freezer (pasta with tomato sauce, for example, or a curry using left-overs from our weekly takeaway - our local Indian restaurant always gives a free veg side dish if you order over £15, so I freeze this)
1 veggie/salad meal (cauliflower cheese, roast vegetables mixed with pasta, aubergine and courgette bake with tomato sauce)
1 meal involving mince (a favourite here is chilli, but with wraps and sour cream/yoghurt and cheese, rather than on rice - or shepherd's pie, spag bol, meatballs and tomato sauce, mince and onions with Yorkshire puddings)
1 meal with chicken - either roast chicken in a traditional way, or with roast vegetables and baguette - I buy Sainsbury's Basics part-baked; two of these for under 40p
And then we have a takeaway on a Friday - which is an indulgence. If I had to do one more meal I'd probably try and do something with fish. Something like kedgeree makes a little bit of fish go a long way - as fish can be very expensive.
If you don't already, start looking at cheaper cuts of meat to use. Sainsbury's Basics rolled breast of lamb is fabulous. Simon Hopkinson in The Good Cook has a fabulous recipe for this www.bbc.co.uk/food/recipes/breast_of_lamb_baked_80591. Shin of beef for a beef stew, belly pork (although this is a bit trendy now, so will cost you a bit more!)
You're not getting enough from your food either.
I used 1 pack mince this weekend (from the Sainsbury's 3 for £10 selection). So that was £3.33. To that I added half a carton of basics mushrooms, a cup of lentils, two value peppers, two tins toms and some herbs and tomato puree plus the dregs of a glass of red wine that I froze rather than tipped away.
It made the most enormous pan of bolognese which we then used for 2 meals Spagetti bolognese and a cottage pie (using a value bag of potatoes and adding a handful of peas and two chopped carrots).
Similarly a large chicken could do a stir fry plus something like moroccan tagine.
1 chicken - breasts cut up into stir fry - thighs and legs into curry - rest as stock for soup
We have started having meat-free days as well, quality meat is SO expensive we can't justify eating it every day, DH was shocked to discover he really likes lentils.
My mum is fantastic at budgeting and doing well on not much. Her strategies are:
Make a budget plan for how much you will spend on each type of thing each month - so, for example, £X food, £Y bills, £Z for dc1 etc (amount per dc likely to be different per age). Headings can be whatever you like, but make sure you allow an amount for everything (and have a 'miscellaneous' for the completely random).
Keep every single receipt, and make sure you get a receipt for absolutely everything. Once a week (maybe more often to start with) sit down with the book (these days a spreadsheet!) and work out how much you have spent from each budget. Then you can see if you are going over on any area and think what to do about it (that may have to be cut down elsewhere).
Every six months or so look at each budget heading and check that it all makes sense.
Make sure that Saving and/or paying off debts has a budget heading of its own and has an amount allocated (so its not just 'what ever is left over IYKWIM).
In times of financial stress:
Avoid cards like the plague. Take the amount of cash with you that you need for your shopping, and no more.
My mum wouldn't have a cashcard even for years because she said that having to go into the bank and queue for cash was a useful slow down on spending!
Oh, and when you do your totting up of receipts, go through the bank statements as well and tick off every item from each statement and make sure you know where it went.
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