How do you budget as a family?!

[Confessionsofashopoholic]

I am determined to get on top of our finances! We are constantly in debt, repaying off short term borrowing such as Klarna, PayPal credit, Next account etc. We get them to zero every month but then are in our overdraft every month, both at close to -£500 each and our joint account isn’t much better either. We have savings around £6k but I just looked at our income and outgoings and I think if we stuck to a strict budget we would probably be able to stay in the green if we budgeted properly. At the moment neither of us budget and every month we can’t afford any extra’s as it were and it something goes wrong, we are having to resort to saving which at £6k isn’t terrible at all but we want to add to it, not keep taking a little here, a little there as over the year that could go very easily.
I don’t want to sound daft but how do you budget? What works? I can keep a budget of my own spending and I could probably monitor the joint account… my husband… he probably won’t keep an eye on his but he’s happy to share his finances, as am I.
How do you do it? Do you use any app? Should we be going through it daily, weekly, monthly? Is there any good banks that have good tools? I really want to make this work, I’m fed up us both working hard and living pay to pay check - stressed!

I think the easiest is to work out all of the essentials - nursery fees m, mortgage, bills etc and then work out what you have left for non essentials. Then either work out what you're going to put aside for things like gifts, haircuts, clothes and have a pot that is a 'fun pot', or you split the fun pot between you so that you each have your own pot for the months to spend how you wish

I would start by both putting absolutely everything you earn into the joint account.

Working out what you need for essential bills, food and other necessities, savings and family extras. Whatever is left gets split evenly between the two of you for your own accounts.

At that point you know everything you need is covered. Make a monthly budget and stick to it.

Make sure you know what is coming out and why, check you don't have any unused subscriptions or payments you don't know about. Check that you have the best deal available for everything (phones, internet, TV, gas, elec etc). Make sure you're claiming anything you are entitled to (e.g. free nursery hours etc).

See where that gets you. Then decide on what you can put into savings/luxuries.

This is what we do…

We don’t have a joint account, no particular reason, we’ve just never needed one. We both have our own accounts. DH pays all the monthly direct debits out of his account, that covers all of our bills. I cover food and general day to day money out of mine and keep on top of it with a spreadsheet. I have a record on there of everything coming in and out and work to a figure each week. My account allows me to separate stuff out into “savings pots” so I do that to help keep track. DH and I both have allocated “fun money” which we spend on what we want each month.
At the moment we’re taking a big financial hit as our eldest is going to university and we’re paying his rent so things are looking a little different and I’m having to keep a much closer eye on things. Hopefully things will feel a bit easier once this month’s initial expense is over, but currently it feels like a big change.

Just to add I find I check mine a lot, I check my bank account at least once a day to see whether I’m on track to be at this weeks target by the end of the week. Helps me stay in control of it.

We have a joint account for all bills, we both have ISAs and our current accounts. We both have same ‘spending money’ left over after sending to Joint and Savings.

Start off by having a no unnecessary spend month. So no new clothes, makeup, or things that you don’t have to spend on.
Go through your accounts and get rid of any direct debits you don’t need.
Have a budget for your groceries and stick to it. Planning your meals help.

I have posted before about this on here before but at the risk of being boring/sounding like a spammer, I would try YNAB - it's just a budget app but honestly I wish I had found it a long time ago as my finances would be in a much better state. There are some threads about it on here I think. It takes a bit of work to understand how to use it at first, but then it's brilliant.

We also use YNAB and love it. It costs but it’s worth every penny. if you can’t stretch to that then try and do a zero based budget, which is basically to allocate every single penny of your money to a purpose each payday. We have quite a few categories in YNAB for things that need saving up for like gifts (so birthdays and Christmas etc), holidays, clothes, house insurance (we pay that up front), same for car insurance and other subscriptions (like Ring). We also have monthly categories that are generally fixed for bills like mortgage, utilities etc. And other monthly categories for groceries and fun.

Also, I would pay off all of your outstanding debt, including getting the overdraft paid with what you have in savings. Then you can start with a clean slate.

We have a joint account where all bills come out of. Then we have our own personal accounts where we each transfer £250 a month for fun money. From the joint account, we transfer £850 to our Revolut account and that’s for food/charging the car (if out)/meals out. It’s only me and DH and this seems to work really well.

Work out what your outgoings are and what you have left over. Simple as that really. If we don't have the money in the budget we don't buy it. We account for everything from food, to haircuts and holidays.

I create different 'pots' for thing that needs saved for throughout the year e.g. £35 per month for school uniform, £100pm for Xmas, £50pm for car MOT . That way we never get any surprises or if we do they'll be a bit of money we can 'borrow' from another pot and then put it back next month.

Also work out what's cheaper to pay upfront, I save 15% by paying my gym membership for the year rather than monthly, same with one DC sports fees and our insurances. Means more money in your pocket in the long run.

Also make sure savings are working for you and the money is performing the best it could be.

Paying off outstanding debt first is only a good idea if the debt is costing them more than they're earning in interest from the savings. She would need to do the sums to make sure this is a sensible plan.

I know someone who has enough money to clear their mortgage (fairly small amount left on it) but choosing not to as the money is worth more in the savings account for now.

Strangely, going from monthly to weekly paid has made me sort out my finances. I've never been so good with money. I put a certain amount per week into the direct debit account. The rest i spend/ save/ pay things off but I rarely go into my overdraft now. Was in it all the time on monthly pay.

I'm actually going back to monthly pay soon but it'll all go in a savings account and I'll pay myself weekly from that into my current account.

Yes, true. I assumed that would be the case for such a relatively small amount. (£1000 as I understand it).

Joint current account
Joint bill payment account
Various savings (both have ISAs etc)

Wages go into current account, standing order to bill payment to cover all monthly/annual bills (excluding groceries) plus a bit extra for the adhoc things that come up like car tyre puncture, gutters need cleaned type things. Standing order to ds at uni, and another into savings.

Current account is what we have left to spend on groceries, clothes, eating out etc, anything left at end of month goes into savings. If we need to, we dip into savings rather than use overdraft, clear credit card at end of month most months.

we have very similar spending habits and goals so works well for us.