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Family budget help - failing miserably(46 Posts)
Namechanged for obvious reasons.
Family of 2 adults, 4 children and 1 cat. Monthly income of £3620 after tax
Rent: £800 (includes water)
Electic: On a meter, roughly £30 a week but not sure as just top up as and when. Cannot change to DD as landlord put the meter in before we moved here
Diesel: £120 a month roughly. Again don't really keep track as we both top up as and when
Council tax: We don't pay by DD as DP paid it off all in one go when we got the bill. Will be paying by DD next time
Internet: £26 a month
Mobiles: £150 a month for 3 phones
Car insurance: Paid in one go so no DD
Car tax: £18 a month
Debt: £360 a month
Food: No idea. We don't really do a weekly or monthly shop. Just buy day to day depending on what time people will be home/what kids have after school/school lunches/if we are eating out
Cat: About £20 for food, pet insurance
I've just gone through the bank statements and realised we don't have contents insurance
Debt: Loan of 10k, credit card 2k
Savings: about 13k split between an ISA and a savings account.
I know we could use all the savings to pay off the debt but ideally we would like to keep them for a house deposit.
I know we are terrible with money. Everybody just seems to buy what they fancy without really thinking about it. DP and I have just sat down to budget but where do you start? Realistically I don't know about meal planning or food budgeting, i've always been terrible at it and its easy to just go day by day. Bank statement is full of £20 shops at the co-op or Budgens. Inevitably we end up picking up crap along with each shop which pushes the bill up.
Where do you start? Is it unrealistic to think we could put £500 away in the savings each month?
If you pay for everything by card, tot up how much for fuel and food over the next month.
Moneysavingexpert.com has a debt free wannabe board that assesses your outings and suggested changes.
Shopping at Aldi and meal planning and batch cooking has helped us a lot.
I would start by meal planning and keeping a record of how much you spend on electricity/diesel. What people spend and what they believe they spend can sometimes be very different.
Do you want help with meal planning? It would be cheaper for DC to have packed lunches.
After that I'd look at your phones. If you wanted to save want to save money you could get cheaper deals than what you've currently got.
your mobile bill is astronomical!!! That needs sorting as soon as your contract is up. Shop around - you should be able to save half that!
Food...meal planning is the only way to plan what you buy and save imho. I sort of meal.plan but also account for a couple of top shops per week.
You need to sort contents insurance asap.
I hope your debt is on 0%?? Because if it isn't it's mad not to use the savings to pay it off!
You don't mention things like clothes, haircuts, dental stuff etc....how much per month is that?
Also socialising...do you go out? Take always? Some easy ways to save cash there
And chance the gym...walk/run
It's very cheap!
Pay off your debt with your savings. It's crazy not too!
When you apply for a mortgage, your debt goes against you anyway so if house buying is the dream, pay off debt and start saving from scratch
You also don't mention car parking costs, TV license, DCs extra curricular activities or pocket money. Do any of these apply?
I'd do a month of writing everything you spend down then you can see where it goes. The mobile bill seems massive, can that be changed? Contents wise I've just changed ours to aviva. £7.48 per month including covering dh and dad's bikes.
I would LOVE meal planning help. It seems to daunting. I was never taught to cook and I get confused over defrosting food, how to freeze food what can be frozen and cooked in advance etc
Haircuts/Personal grooming: £70 a month. See I didn't even think of that when writing OP
Birthdays we just take from the savings and then put back the next month.
No idea on debt interest DP says credit card is 0% because he did a balance transfer 4 months ago
We eat out/takeaway about 3 times a week if i'm honest. DP and I agree that stops today.
Clothes budget just depends on what people need. We buy as and when.
DP won't give up the gym. He has a knee injury so can't run and loves the gym.
Also an expensive kindle habit, just looked at Amazon and we spent over £60 on books between us all last month. We've got Amazon prime and can borrow books from the kindle library so that was a complete waste of money!
Car parking I have my bank statement open on another page. About £35 at the NCP last month.
TV licence paid in one go
DC activities. Football subs, dance class, and BJJ. About £50 a month
This is how I do it, it may or may not suit you
1. On pay day or thereabouts I have standing orders to my savings accounts, these are for savings and long term budget items such as car expenses, holidays, Christmas, clothes, insurance, household things (replacing white goods, decorating etc). I work out how much to put in by decided an amount I need for it and then dividing by 12. I save the amount for a service, set of tyres, tax, insurance, mot and an extra little bit in case.
2. I do not ever go to the supermarket. I do a weekly online shop and take things in and out of my basket until it is at or below my budget. I do this after I have meal planned for the week and checked the fridge / cupboards / freezer and worked out what meals I can make.
3. I check my bank account every day and try never to use cash. I can then use money dashboard or the new spendify app from Santander to look at my spending and see where it is going.
4. I have a budget for eating out and keep a running total on a note on my phone. When it's gone it's gone. It's very easy to spend a lot in drubs and drabs.
4. Every penny we have is hard earned and I see it as my duty to make sure it is spent well. I'd rather have a nice big takeaway once a month for £30 than three mcdonalds so we do that. I like meat and I buy it from muscle food or buy cheaper cuts and cook it in the slow cooker. We are budgeting but not deprived.
You need to go through possibly a year of bank statements (you can request them if you don't have online access) and look st what you really spend and not what you'd like to spend. Prescriptions, tv license, charity donations all add up and have to come out of somewhere.
Your mobiles sound very high, can you see if you can change to cheaper tariffs or switch to one of them being on a payg type tariff?
You have to start somewhere, success is about taking control of it and keeping track. After a few months of keeping a close eye it gets a lot easier and the practices of control you have learnt will make it simple. Knowing your true outgoings over a year will allow you to see what you need to put away each month for when those bills come and what you can throw at debt.
Firstly, I'd say get a second bank account, and transfer enough from your wages the day you get paid each month to cover all your direct debits/ standing orders for that month. I'd also say transfer the approximate monthly cost of your car insurance, tax, and council tax too, so when the next annual bill comes you are partly there, and after that each year you'll have the amount ready in full. Same for anything else that you pay for by calendar month, even if it's cash or card, so perhaps the heating oil.
On pay day or soon after put a rough amount on your prepayment cards to last till next pay day.
Start doing a weekly shop, and fill up the diesel at the same time. This means having a rough plan of what you plan to eat. Weekly shop doesn't mean it has to be at one shop, or even same day. Or you might prefer to do one big shop after pay day, and then each week top up with fresh stuff.
What is left at the end of each month will give you a rough idea of how much you have for savings and unfixed outgoings. (Eg clothes, extra-curricular, repairs, household items etc).
Obviously you could make lots of cutbacks on your outgoings, but I didn't think that's what you were after. And as you aren't struggling for essentials, it might be easier to spend 6 months getting to grips with the current budget.
I'm starting to see why theres no money left at the end of the month. I hadn't even thought of including the things you've all mentioned.
Just looked at the paypal account and we have 3 subscriptions to things we don't even use anymore (bin weevils, moshi monster site etc)
I'm actually embarrassed by the waste of money.
Also imusic subscriptions, audible subscriptions etc. They've both just been cancelled.
Also Amazon prime and renting movies, £64 last month that I didn't even know about. Guessing thats the DC.
Xbox live £4.99 a month
All of the mobiles are half way through their contracts, not sure we can do much about them
I think a lot of us have been there, I certainly have! I had a kindle unlimited subscription I've just cancelled that I had no idea about! Don't be embarrassed, it's life and money isn't easy, no one taught us this shit
We have exactly the same income OP and we're currently saving £1750 pm.
Its hard but it is doable. We were like you and couldn't understand where the money was all going, turned out it was mostly supermarkets and lunches at work.
I now shop in Lidl once a week and thats it. Started getting milk delivered to save me having to go out for it and spending £20 instead of the £2 the milk cost. DH now takes a packed lunch to work, as do the DC as its much cheaper than school dinners.
Our rent is slightly cheaper than yours but we pay council monthly so take it to the same amout. Both our phones come in at under £40 so that would be worth looking into.
We do actually save £2000 on payday but usually dip into it at the end of the month. We've found this much better saving wise because when the current account starts getting low we get more careful, where as before we would just keep spending. But we know we can take the extra £100/200 if we need too.
Its hard but we really want a deposit for a house more than we want anything else so we'll keep at it for the next wee while.
No judgement here!
We've all been there I think.
The bills for tv/Amazon/take seats have to stop but you know that
It's amazing how it adds up isn't it?
I agree with the tip to shop online / I do 99% of my shopping online inc food and it does stop temptation - first order is s big time consuming but then after that you just use your saved shopping list. I use ocado and have a delivery pass which also saves money
Wrt to loan...that will not be at 0%! Pay that off with the savings and they put the money you would have been spending on repayments into an isa.
A bank will not give you a mortgage with that level of personal debt.
Lots of people find the ynab software very helpful but I must admit I fu d it a bit confusing....maybe it's my age though!
A top would be to go through last months accounts and account for every penny...then decide what you don't need and act accordingly.
Some great tips on here re food planning and recipes
Good luck! You can do it!
Oh...and change your Amazon password!!!
Food tips - if you eat freezer food then work out what you can batch cook for those nights. Find a simple recipe that you can repurpose. I make a bolognaise sauce and I can turn that into chilli, lasagna, pasta bake, cottage pie, patties by adding a few extra ingredients. I try and have a couple of cheaper meals on my plan like jacket potatoes with beans and salad to make my budget stretch. I also chuck lentils or pearl barley into meals to make them go further. Find a repertoire of 5-7 meals you can make and then repeat them. Having a chicken on a Sunday is great as you can have leftovers for a couple of days. I turn mine into fajitas, pie (with the left over roast veg cut up into small dice and left over gravy mixed with milk and topped with ready rolled puff I keep in the freezer), pasta bake. I set reminders on my phone to get things out the freezer and that helps.
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