What am I doing wrong on this salary?!

[Llkkg]

I earn enough money, around 3100 after student loans. My mortgage is 950 and council tax 180. I have some credit card payments of around 120 but that’s it. I will need to get a car soon though as that’s around 350 a month.

For some reason I constantly run out of money and I don’t know where it goes. I don’t buy clothes often or anything like that. I know I have enough money and I feel shit that I can’t seem to keep on top of it. I don’t feel like I spend a lot but I’m obviously going wrong somewhere?!

Agree start with a bank statement. Isolate the larger costs such as rent/mortgage, utilities, council tax, fuel, insurance then where you make the most smaller transactions and how these add up.

And is £120 clearing your cc or just minimum payment, so accumulating interest.

Start doing online banking and set up notifications so that it comes up on your phone each time money comes out. Some banks have a ‘manage your subscription’ page now where you can see what you have signed up to like Netflix etc.

As to what you are doing wrong, the answer is simple, you are spending too much. When we used to have very little money - good salary but only one salary for family of 4 and 15.5% mortgage rate - we kept a log of exactly what we spent our money on so we could see where we could cut back if there was month left at the end of the money! That and buying second hand wherever possible.

I've just started banking with Chase and the app has a function which allows you to make a note beside everything you spend. I've been using it to try to keep track of exactly what I'm spending- very useful for seeing where (the supermarket, for me).

Your putting my £3 meal deals to shame 😂

I earn less but pay much less on my mortgage (because I’m older and I’ve been paying a mortgage on similar sized properties for over 20 years) so I also have about £900 left today. In my case, almost all the bills (and definitely all the large ones) come out on the first of the month.

The £900 has to cover food and clothes and that’s about it. It’s a rare month I don’t have money to stick in savings and that’s with takeouts etc.

What I’m trying to say is that having ‘only’ £900 left isn’t a problem if that’s after bills and is considerably more than a lot of people have after the bills are paid. It’s only an issue if you can’t cover your outgoings and I can’t tell if that is the case from your post. If your bills have been paid, I agree with previous posters you need to do a month where you write down everything spent, down to the penny. After a month of doing that, you will have a much better idea of where the money is going.

Write it down or go through your statements. When I did this a few years ago it was an eye opener how much was going on food and drink - £7 here, £10 there, lots of just eat on there too. I cut it in half without much pain, starting with my then h's £7 a day sainsburys habit for pastries and snacks!

You're either eating it, wearing it or smoking it. Or all 3.

Definitely these!

Also:
random direct debits you signed up for and forgot to cancel,
taxis,
going out for drinks,
buying lunch at work,
hair & nails,
"small" purchases that add up over the month - makeup palette, lipstick, top from H&M, bottle of wine, magazines etc;
going to shop for milk and coming out with a bag of stuff rather than just the milk.

Little things add up thats the reality! Even £ 5.00 for a coffee , each work day equates to £100 pm! Ditto takeaways and "little " shops .I plan each month and try to pay by DD so I dont get any nasty shocks.A small flask of coffee,and some sandwiches from home will save masses.Also often nicer too! If going out with friends maybe have an evening at home? If out see if you can get deals for the Cinema or Restaurants .Clothes I often buy on EBay as they have good deals on Monsoon which I love (Or other brands as well of course) If not often have a percentage off in shops as well (esp ATM).Have a good sit down go over all spending and write down all spends (even little ones )

For me it was the little invisible purchases that added up to a crazy amount, so £3 here and there for kids sweets on the school run, £4 coffee on my errands, £20 takeaways etc etc.

I added I all up a few months ago and I’d not realised I’d been spending around £200ish on those little invisible purchases you forget about per month!

I am much more aware of what I spend now, I went through everything with a fine tooth comb and got rid of lots of subscriptions I didn’t use, switched my sky to a cheaper BT internet package, went for a sim only when my contract was up, meal planned based on what I had in and made sure to stick to it.

I also gave myself a budget for myself on what money I am ‘allowed’ to spend each week and I stick to it religiously. It’s not easy and it definitely took me around 4 months to actually succeed and stick to the routine without failing at it but it can be done!

Take out all your outgoings first - mortgage, council tax, water, gas, electricity, phone, internet, any factoring etc. Not just mortgage/council tax/car.

Set a budget for food shopping and then take that off.

If you want to make some savings then that’s next to come off.

Whatever’s left you divide by how many weeks til next payday and that’s your disposable per week. I can’t do it monthly as I spend it all in the first 1-2 weeks.

I have multiple pots to hold money for set expenses.

Dont forget when you get a car you’ll need to factor in insurance and fuel too so that’s in the first set of deductions. Plus maintenance.

I have to get a car for work unfortunately.

Are your miles expensed, or is this purely for commuting?

If the latter - why spend £4.2k a year x at least 3 years just to stay on the road? You can still buy a decent reliable older eg hatchback for less than £4k.
If you don't have that ready money, it might be worth borrowing it. Even with interest, if you fix a good rate & allow for a couple of hundred to pay a TRUSTED mechanic to vet your potential purchases, you'd be £7k - £8k better off over a 3 year period.

If the former - how many miles, can you claim the full 45p per, & does this exceed your proposed £350/month outlay - every month?
How much are you going to lose when you drive it off the forecourt?
How much will it depreciate over the 3, 4 or 5 year term?
What does the fine print say about how much you can be stung for at contract end, who assigns the Final Purchase Value (ie potentially rips you off on a buy-back or exchange) & what additional fees are there if you have exceeded an agreed mileage?

For non-car related stuff, start writing down your expenditure. PP have suggested apps or a spreadsheet - all good, & you may find a notebook works for you just as well. It lends immediacy & instant accountability. My sister used to do this when she first left home - literally, if she spent 15p on a biro, she wrote it in her account book. It turned her into a SAVER! A tenner a month here & there into various pots, & throughout her 30's & 40's she had several little nest eggs maturing, which she either reinvested or spent on fab holidays.

I taught my girl to do this when she was 14 & experiencing Inevitable Teen Anguish that she could not buy all the things ... it's simple maths, it just takes a bit of application & consistency.
Start with the balance of what you have in your account, underneath it write the cost of each item/service/utility on a separate line. Next to that cost, on the same line, subtract the sum spent & write the new balance.
2 months of this & you can assess where it's all going & start budgeting instead of feeling you have lost control & money is floating away from you.

Boring as hell for a while, but the trick to any chore you dislike is to get quite good at it. We tend not to dislike doing things we are good at.

As others have said, write down everything you spend. Go through bank statements if you receive those, or online if paperless.

.

Check your spending on public transport too - where I live, a commute by bus is £4-5 per day, which would be £100 per month if daily. London would be more expensive and anything on National Rail adds up really fast.

Before making a big purchase wait 48 hours. If you’re still thing about it after 48 hours, think about buying it; if not, don’t!

Cancel Amazon Prime!

Your take home is the same as out household income for 5 of us (2 adults 3 teens). You should have loads more left

I use monzo bank and a spreadsheet . And I have pots ( accounts) and I put money away for things like dentist , holiday , bills that are not on dd , and car bills .

then I budget and if there is money left it goes into a “spending “ account .

we went through every bill / outgoing recently due to a drop in income and it was surprising what odd spending adds up to .

I've just had to shake up our expectation on our budget recently:
A hospital visit cost us nearly £10 in parking, another £10 in a ready meal on the way home, £3 on a coffee.
A cinema trip was £9 each a ticket not bad but another £7 on parking, £3.50! On m&ms plus bad timing so bought lunch out.

So we need to work out a way to maximize this stuff as treats in our heads to get the full benefit and find ways to make them cheaper or different.

Just need to recalibrate. I am grateful for our comfortable years, we had far to many'get off the bus early to save 20p' type years.

You need to budget as others have said, and your budget also needs to include longer term savings (for things like buying rather than renting a car) and also you need to consider retirement too. It is often recommended that 15% of your pre-tax income goes into retirement.

the above isn’t possible for so many at the moment unfortunately, but on your monthly income you are in a position to really take hold of your finances and thrive. Good luck :-)

You obviously are spending on things you aren't speaking about - I would guess socialising, food, drinks, clothes? None of that is bad - but it's where money goes. £900 disposable income a month after paying for mortgage/bills/debt is pretty good.

I was paid on Friday and got 900 left already.

unlike some PP I would be uncomfortable if there was only £900 left after all bills accounted for, so it just goes to show we’re all different.

However - based on your OP saying that you had 3100 left after student loan, 2,200 has gone already in a week. How much of that was DD’s/SO’s, and what are they for? Is everything on that list essential, or is there scope for eliminating, or at least getting a cheaper deal?

How much of that 2,200 was NOT DD’s/SO’s, and what has it gone on? Was it just a typical week’s spending, or an occasional/unexpected bill?

As others have already said, the starting point is to understand where your money is going. Then you are in a position to prioritise and therefore save.

You need to track every penny. Before we did this I thought my husband was the one spending it all as he would do the big spend purchases. But then I discovered I was the fritterer and all my small purchases added up to way more. So take note of everything and track it on a spreadsheet, assign a category to it and see where it's going.