AIBU to ask for a high level outline of your budgeting?

[mummyandmeguru]

Background: I work very long hours in a stressful role. I am very well paid for this, but it has a massive effect on quality of life, time with family, health, etc. We (DH and I and DCs) are thinking of a career change to a role that involves more normal hours. But a big fear is that even in my current well paid role we seem to manage, comfortably enough, but not with loads left over, and so I wonder whether it is unrealistic to expect to change jobs without fundamental lifestyle changes.

AIBU to ask for a very high level idea of how you budget from your income?

E.g. say your family income is £50k, £12.5k goes on tax, £12k on a mortgage, £5k on food and drink, £6k on nursery fees, £5k on council tax, utilities, etc £2.5k on cars + fuel, £3k on holidays, £2k on clothes, £1k on going out / leisure.

Or put another way, at what income level can you fund 2 adults and 2 DCs in reasonable comfort?

This is no way intended to be goady or anything of that sort - rather to help me (and perhaps others?) see how others allocate what is available and to think through how I might re-budget and therefore feel better equipped to consider rebalancing life and finances.

We have going in...
H wage 2350
Me (work 23hrs) 1200
Chb 137 for two kids

Out
Mortgage for our house 420
Mortgage for house we are in process of selling 425
Sky 72 Inc broadband, TV, landline
Council tax 127
Council tax for other house I've just paid a lump sum for 6 months til it's sold
Life insurance 2 policies 18 also both have death in service cover through work so this is more than enough
National trust 11
Gas and electric 72
Gas and elec for other house 17 as its empty
Water meter 47
Tv licence 13
Son's mobile 18
My mobile 24
H gets his free at work
Food 320
Petrol 150 for car we own outright
Pocket money for both of us 500

We try to save as much as possible too and have some we don't touch and some we use for car repairs, school trips, holidays so that's a more fluid saving fund.

Ive had debt in the past and will probably have to borrow from family when we sell the other house as there will be a shortfall but we will pay this off as fast as humanly possible then throw money at our savings again.

I wouldn't get into debt for even a car again. I hate debt. I love the security of savings.

Thank you for asking this question in terms of annual figures. I keep a close day to day eye on spending, and have monthly budget categories that I review against actual spending (don't I sound fun?!).

I just totted up the categories of budget for the annual amounts and it was eye-opening. I guess that's why they do that on those "live well for less" type programmes, to make it look like huge savings are possible if you tot up enough 50ps

Anyway, here's our ballpark annual spending numbers, comes to about £32k net costs:

mortgage £6k
petrol / parking £2.5k
groceries and household products £3k
clothes and health £1k
books, films, gifts £1k
going out and misc stuff £1k
childcare £1k (I work 9-3 so limited childcare needed)
home insurance and home maintenance £1.5k
council tax £2k
gas/elec/water £1k
phone/internet/mobile/tv £1k
car insurance and breakdown cover £300
sickness insurance and extra pension £1k
school fees £6k (thank goodness the rest is a bursary)
savings £3k (if we took holidays it would come from this)

This leaves enough slack in the system that if the car needs new tyres or the boiler needs replacing, it wouldn't be a drama. Big holidays are a rare occurrence, and I think carefully about committing to things like music lessons.

I don't have a gym membership but I like to run outside (free apart from my trainers obsession). I don't have a regular cleaner but budget to pay for a half-day clean a few times a year as a treat. The car loan is paid off but it's relatively new so should last quite a while. We don't have pets. We don't have very expensive hobbies. I rarely feel like we're missing out, and rarely have to tell the DC an outright "no" to something but we often have a "we'd need to save up for that" chat instead and they decide how important the thing is.

I agree with pp that more time = cook from scratch, don't need a cleaner, don't need childcare, all of which add up.

We spend around £4k a year on wraparound childcare and clubs, which could be cut back. Also £1k on the cleaner which frankly I would prioritise over fresh veg if it came to that!

More essential type things are £4k probably on running my car, I don't do a huge amount of mileage tho. £5k on electricity, gas, council tax etc. Another £3k on the supermarket shop.

Everything else I guess you cut your cloth accordingly, you may not have £100 for a big day out to see Santa or you may not want to spend that £100, either way you go to the local shopping centre and the kids are equally thrilled!

@mummyandmeguru if you're trying YNAB do watch the videos. There is also a UK Facebook group. When we started we had a gross pay of £47k and now earn quite a bit more than double that we're using the system to shoot for early retirement rather than just survive. I love it!

PooWillyBumBum - love the username - the DCs would think that it was the best thing ever!

Thanks all for comments...very helpful. Will splash out on some popcorn and sit in front of the YNAB videos :)

Wow, reading some of your incomes is impressive... Ours is not, we made a decision last year for one of us to only work very part time as we were struggling with suitable childcare etc. It means between us we probably earn abou £26k. Which would be horrific but we are lucky in that we don't have to pay a mortgage or rent so we are just about managing... Sort of. We would be but we have debts of 11k and I can't seem to get that to go down. It goes down a bit and then back up again... Still I think we did make the right decision, the house is definitely less stressed now

Incoming approx 4500pm

Outgoing
Childcare 200pm
Electricity 50pm
Car fuel x2 300pm
Life ins x2 70pm
Car savings (for tax and insurances) 100pm
Phone bills x2 70pm
Food 250 pm
Savings 1000pm at least
Dc Activities approx 50pm

The rest I cannot account for exactly probably ends up spent on clothing, holidays and eating out and saved 😬

I find all this very depressing
I earn 34k before deductions and pay £1000 per month mortgage
Bills come to about £400 I also have debts amounting to about another £400
That leaves me around £100 a week to eat, run a car, replace things etc
I also help out DP and until recently paid my Dads nursing home top ups!
I manage by eBaying anything I can, live off the reduced counter and budget tightly

Income approx £900 a month

Outgoing
£600 rent
£25-35 food
£60 joint gas elec
£30 water

Other expenses
£10 week socialising
£60 monthly travel pass

We both work part time and our take home pay comes in a fraction over £1500 a month or £18000 per year combined. When we were young and the children babies we both worked full time and lived off one wage for about five years so we could buy a house outright so no mortgage or rent. Children now grown but when they were growing up child benefit covered all clothes, toys etc and we always worked shifts to cover child care so no costs there, so other than a larger food bill our annual outgoings were roughly equivalent.

They work out-

Council tax plus water £1100
Gas and electric £1020
TV, internet, phone (all Virgin) plus TV licence £1000
Car- petrol £1200
insurance £300
MOT and service £175
Road tax £30
Breakdown cover £240
House insurance £200
Homecare package £245
Food £2000
Savings £2400

Total £9910

Leaves us roughly £8000 per year to cover other costs, car and house repairs, any odd clothes we need, replacing any broken down white goods etc and to pay for holidays, nights out, gifts, whatever.

OP there is lots of information on the forums on Money Saving Expert. You can post you income/ outgoings and get some good budgeting suggestions.

Getting people to write out their budgets and outgoings doesn't mean anything, though. If you're locked into a mortgage contract, someone saying they pay £500 less than you/month isn't much help.

There will be people who happily support their family of four on 20k per year - because they live in a cheap area, have lots of family support and no childcare costs as there's a parent who stays home or works school hours only.

But at the other end of the scale are people have two parents who work 50 hours a week each. They live in an expensive area so have to spend over 1000 a month on the mortgage. They also commute so have to factor that in. Working long hours means they need wrap-around childcare. And on it goes.

We live in a cheap area (no DC) and have a lot of disposable income - but we chose this life. We chose to buy a cheap home and do it up ourselves. We chose to live somewhere with very few amenities. In other words, everyone makes choices in life and you sometimes need to accept that those choices mean you can't necessarily spend as little as other people can.

Ours is a bit fiddly, because we have joint money and our own money.

DP is on £25k and I get just over £12k (part-time) wages plus £3,500 pension. Net of tax, NI and pension contributions DP gets around £1,400 a month and I get around £1,200. We put £750 a month each into to our joint account.

We've paid off our mortgage, have no loans or credit cards and our regular outgoings are:

Council tax £158
Energy £65
Water £29
House insurance £15 (paid annually)
Car insurance & breakdown cover £18 (paid annually)
National Trust membership £7 (paid annually)
Petrol £75

So that comes to £292.

Irregular outgoings:

Car £42 (see 1 below)
Shopping £216 (2)
Holidays £160 (3)
Meals out/takeaways £120
Vet £15

That's another £553, bringing our total to £845.

Most months, we save £500-600, but sometimes there will be a big expense (this month, boiler repair) that reduces that. When we need something big, we pay for it from those savings, eg we spent £2.5k on new sofas a couple of months ago and will be getting new windows, doors and guttering next year, which will probably wipe out the nest egg.

I spend £10 a week of "my" money on hairdressing (cut & colour every six weeks), probably about the same on skincare/pedicures etc, so £90 a month. I spend around £50-60 a month on books and an average of around £30 on clothes. I also buy 2 packs of cigarettes a week, so £90 a month.

DP smokes a shocking 20 a day, so spends £300 a month on fags. (This is one of the reasons we have separate money - I refuse to subsidise his smoking). He's a baldy and I cut what hair is left with clippers every week and he spends next to nothing on clothes. I swear he'd walk round in rags if I didn't buy him new stuff for birthdays/Christmas. He also pays £50 a month on a life insurance policy on his ex, that he regards as an investment as she is an alcoholic cancer survivor with a very unhealthy lifestyle and he'll get £200k if she dies before he succumbs to the fags.

We both have savings (me £28k, him £12k) that increase significantly year on year.

1. Our car costs are low, because we never spend more than £1,200 on a car and scrap them if/when they need an expensive repair. It averages around £200 a year, so £500pa/£42pcm if each car lasts 4 years (although that's not counting the £150 we get back when we scrap them ).

1. We spend £40-60 a week on shopping, so using an average of £50, £216 a month. We mostly cook fresh, from scratch.

1. We have had incredibly cheap holidays for the last 5 years, as we bought an old motorhome for £4k and stayed mostly at free stopovers. DP reckons it more than paid for itself in what it saved us in cottage rentals/campsite fees/coffee stops en route. We'd go away a lot and rarely spent more than £500, including petrol and meals out. So 3 trips a year would be about £1,500, and add another £500 for running costs, approx £160 a month. We're now looking for another motorhome, will spend £10k or so, but haven't found the right one yet.

Adaline it is useful,as yes everybody makes choices but some people do have fewer choices, I.e income, disability, not being able to move from where they live.

Also its tips like budget for everything over 12 months so home insurance, car insurance, presents, clothes, days out, repairs etc. I started that a few years ago and you don't get as many unexpected expenses.

People on this thread have mentioned car costs and how they keep it low. How they split budgets with partner when they are not totally pooling their money and other tips. How they work to minimise childcare.

I always read these types of threads and then relook at my budget to see if I can do anything differently. Why? Simply because other people think and do things differently and they may look at something in a way that I have never considered. This information is useful.