Ask me anything about zero-based budgeting and our monthly budget

[Statsquestion1]

I love budgeting. I have always done it. Been meaning to post here for a while.
I do a based budget, so everything is accounted for. I have posted on many “money matters” topics but thought it might be different to post an AMA.
I am currently revising the budget as I do it every 6 months or so.
as it currently stands its

Me 3100
DP4100
CB 280
Total 7480

Housing
Mortgage: 1900.
Insurances(life, house): 150
Property tax: 50
Total Housing: 2100
Utilities
Electricity 150
Waste collection: 25
Broadband & TV: 70
Mobile phones x3: 60
Total Utilities: 305
Food & Groceries
Groceries & household food: 500
Dining out / takeaways: 200
Total Food: 700
Transportation
Fuel: 150
Car insurance & tax: 150
Maintenance & NCT: 100
Public transport / Parking: 20
Total Transport: 420
Education & Kids
School books, uniforms, fees: 50
Activities, sports, clubs: 55
Pocket money/treats: 60
Total Kids & Education: 165
Entertainment & Lifestyle
Family outings, hobbies, gifts: 250
Subscriptions: 20
Miscellaneous expenses (haircuts etc): 60
Personal spends:250x 2 = 500
Clothing: 200
Total Entertainment: 1030
Savings & Miscellaneous
Emergency fund / Savings: 2,000
Holidays (monthly allocation): 500
DC Savings: 150x 2= 300
Total Savings & Misc.: 2800
TOTAL MONTHLY SPENDING: 7,480

Now to be fair they are expiring next year and I reckon we may not qualify next application but we will see.

Well they’d be wrong because that’s not what it means.

That’s interesting. I must take a look at that and see if we’re eligible.

I found that this style of budgeting drives me absolutely mad because I can’t predict everything and I end up feeling permanently out of control. Then I eat into the categories where I’m saving towards a bill that’s not yet due (insurance, or holidays) and it all starts to break down. Or I think I have the grocery bill figured out until I run out of oil and several spices and cleaning products at once.

I’m actually more curious about your mindset than your figures. How long have you been doing this?

Years, since my dc were small and I stayed home. It was a learning curve to say the least.

the GP visit cards is income minus mortgage and mortgage insurances, commuting costs, childcare and a few other expenses I can’t remember. Definitely worth looking into. You can apply online and get a yes or no answer within a week or so. Costs nothing to apply, so no harm.

She’s not! She’s showing how it’s possible to live within your means however much you earn by allocating everything. It’s a method.

I’ve never brought home as much as this but I still use this method because it keeps you on track.

This is why so many people’s finances are in such a mess.

I'm surprised people are criticising op for posting this and having too high a salary. Surely everyone on every income budgets. We earn quite a bit more than this and budget. I can't imagine not.
Op has posted in euros so in gbp would have a take home of £6.4k between 2 people which isn't that extreme anyway.

I’ll show this to my DB and he’ll laugh. His wife is the bigger earner by far, and he has income from a flat and they both have savings. His job which isn’t well paid though pays for the nursery for the toddler. His job also has no sick or holiday pay and so on apart from SSP. He’s almost completely given up film and tv work due to locations and wanting to spend more time with his kids. Hes also trying to start a business atm. Wife’s parents offered to pay for a cleaner but they’ve not taken them up on it yet.

Luckily his wife is very good with money management.

But what if your income fluctuates?

I suppose I do this too. After the bills you list I have £600 a month. This is my food budget. If I have unexpected expenses we eat cheaper for 3 months and use Klarna. Or I skip meals. We end up with zero too. Any tips?

The way I manage that is a spreadsheet that projects the next 2 years, it’s a beast, has taken years to develop, not for people who don’t take enjoyment from budgeting. But every month has a line, I have separate sheets feeding into those lines (lots of formulas!) covering income, outgoings, it factors in projected income raises, fluctuating monthly costs, some things are easy to predict, things that aren’t I always predict more cautiously.

Every saving pot is managed within a sheet and future proofed. I account for things like school uniforms, birthdays, school trips, school holidays, and always ensure there’s some wriggle room for the unexpected, but the longer you do this, the less unexpected there is.

As I say, you have to enjoy doing it to do it the way I do it, I understand this would be hell for many 🤣

How do you handle the entertainment and lifestyle spending?

Not sure I undertsand the OP’s point. Budgeting is where you have a finite amount of money and essential expenses that you have to be sure you can afford, so by ‘budgeting’ you control what you spend on X so that you know you can afford to pay Y? This may mean cutting down, looking for alternative providers etc. It’s the way my student DCs know they have x amount for the term, so allocate a weekly amount to food, phone bill, transport and entertainment so that they know they will still have funds to cover the essential expenses at the end of the semester.

What is being described here is ‘monitoring’ or logging expenditure within generous available funds which allow 40%+ of it to be put aside in savings (which is surely where the money for unexpected emergency costs comes from?). This isn’t budgeting?

What part of putting money into pots isn’t budgeting? Do you think the OP is spending those amounts every month? If OP got a £1000 pay rise she may increase how much goes into the pots, or vice versa, it’s budgeting.

Because it is not changing her behaviours - she is not scrimping and looking to reduce spending because she is limited by the funds within each ‘pot’ for her expenditure: she has savings and states that she can [and does] move money around and top up any of those pots at will. A budget implies there are restrictions.

This is just monitoring.

Anyway, not engaging anymore as I do feel this entire thread is tone deaf.

I suppose what people are struggling with it's that it's comparatively rare that people's income exceeds the cost of their wants and needs, ie they don't run out of money before they run out of things to spend it on. But it can be achieved either if you have a comparatively high income, or a relatively frugal lifestyle.

A lot of people also don't understand the concept of allocating money for things and not spending it that month but letting it roll up, so they will see the OPs 'Family outings, hobbies, gifts: 250' line and ask disbelievingly 'what you spend 250 on outings and gifts every month', when it's not the case at all - that's an average over the year.

They are in Ireland, so the system is different and they probably are entitled to CB.

Sounds a bit OCD when you obviously have plenty to cover bills and you just save what's left over effectively. Which is what most people do if they have excess income over expenditure. When this sort of thing is important is when you hardly have any excess income so you need to account for every penny. I've been in both positions over the years.

I have limited income at the moment. Will rise when I activate my work pension. I find having a list on my phone of all my DDs with the amount and date they come out enormously helpful. I used to just wing it every month but found that chaotic and stressful. Now I know exactly how much I have and where and when it’s going. It’s like a declutter.

Your property tax seems very low compared to council tax. What is it based on?

My thought too!

It’s based on the value of the house and council you are in.

Budgeting is not exclusive to those with lower incomes. Everyone should budget!

Hi OP

How do you budget when prices keep rising but income doesn’t?

I am trying to work to a budget but prices rise so often and quickly. Also one month a supermarket has offers on something another they don’t? How do you factor in and overcome these things?

I’m intrigued as to why you choose to borrow when you have so much in savings? Why not pay off part or all of your mortgage?
It reads as you live comfortably within your means. It’s more like a row of piggy banks on the mantlepiece than a plan though isn’t it?

How did you pay for solar panels?
Have you money put aside for university?
How many months could you “last” if you lost your jobs?
How were your finances during the pandemic?

I agree. My ex earns six figures but is terrible with money. He definitely could have done with a budgeting mentality, so much wasted money.

I shop at Lidl and I feel the prices don’t rise that much there at all.
we are fortunate enough that our salaries do increase each year also so that helps.
I meal plan every week so that keeps everything on track.