To try to get our household outgoings to <2k

[Jillybons]

Dreading work tomorrow and want to try and start my own business. To do this we’d need to get our household outgoings to less than 2k. AIBU to ask if we could and where you’d cut costs. Budget as below currently

• Mortgage 785 (interest rate is 3.5) so probably could get this down
• council tax 100
• electricity and gas 100
• Food 300
• Leisure incl takeaways, clothes, socialising, holidays, personal savings etc 500 for the two of us
• Netflix, Prime 30
• 2 x car insurance 110
• Petrol/car maintenance 200
• insurance home/Homeserve 50
• water 30
• Internet 35

Think that’s it! Though the smart people of Mumsnet will probably figure out something else we’re spending on 🤦‍♀️

All the costs apart from council tax seem high to me.

How is food for 2 £300 a month with takeaways on top?

Is you water metered, that's a lot for 2

How is netfilx/prime so expensive

£1000 on the leisure category, anyone who is serious about saving would cut that straight away

Tbh you don't seem very budget savvy

We forgot phone bills but both on cheap contracts so about 30 a month for two

Is that SIM only? if so it's not cheap

You need to add it up properly. You've missed things out, you've miscalculated Netflix and prime by almost double.

Your council tax is just £100?

What is the leisure and saving cost breakdown?

@HasaDigaEebowai we lump in TV licence costs with Netflix and Prime though TBH we probably don’t need all three!

It might be a good idea to sit down and write down every single out-going from both your accounts over about a three month period.

See what you spend on food, the dog, subscriptions, TV license, bills, leisure, cars, savings etc. then you can figure out where to cut back.

Our leisure/everything else spend is about £100-£150 each per month.

Netflix and Prime is the obvious place to cut. Arent they both about £8 a month, not £15, or do you have one of the netflix packages where its HD or you can watch it on 10 screens at once? Definitely easy to cut back there.

Leisure - buying fewer takeaways is easy, and maybe fewer/cheaper clothes.

£200 petrol per month is a lot. Would this be decreased if you weren't commuting to work?

If you don't watch bbc or live tv and only stream then you don't need the tv licence

@FlyingBurrito we’re not that budget savvy TBH and haven’t massively had to be previously but this potential change in lifestyle means we need to improve!

Write everything down and it will be clearer for the leisure amounts where to make cut backs but to answer your question we spend £150 on takeaway, lesuires and anything miscellaneous although we do seperate the baby spends from that.

@Jillybons

I think leisure money is probs the wrong word as it’s used for ‘everything else’ I.e grabbing a coffee, 100 quid a month into an account for once a year holiday etc

What do others spend on ‘leisure/everything else’

It doesn't matter what anyone else spends, if you're serious about saving money it matters what you spend, you need to change your approach to spending if you really want to make a go of starting a business

@1990shopefulftm that’s a good call so will do that tomorrow, thanks

So many huge costs there, but pp have covered them already.

Just wanted to add that your car insurance is insanely expensive. Do you live in a dodgy area? If not get smaller efficient cars and this will save on fuel too. My fiesta 1.2l is £250 a year, with decent no claims discount.

What do others spend on ‘leisure/everything else’
£100 a month maybe? Maybe 1 takeaway a month which is about £15. I don't get takeout coffee or anything like that really. We have annual passes to leisure places which probably work out at about £30 a month on average.

@LakieLady thank you, this is really helpful.

Our council tax is pretty low as it’s a smaller house but it’s Georgian so it’s bloody freezing

For two cars you pay £110 x 12 = £1,320 a year?!

That seems very steep. For my car I used to pay no more than £300 per year and this was 5 years ago. You need to look at this and use comparison sites.

Agree with all the other comments about slashing the leisure and discretionary spends.

Car insurance sounds cheap to me for two. I pay £75 a month just for me. And I shop round annually. It so depends on where you live and how long you've been driving. And the council tax is very cheap too. Probably leisure is the most obvious cutback. And maybe mortgage if it can be done?

@Lockheart

For two cars you pay £110 x 12 = £1,320 a year?!

That seems very steep. For my car I used to pay no more than £300 per year and this was 5 years ago. You need to look at this and use comparison sites.

Agree with all the other comments about slashing the leisure and discretionary spends.

It goes without saying you must do all the comparisons to get the best insurance of any kind but you can't compare yourself to anyone else as car insurance is specific to each person/car/address/driving record etc.

It's impossible to comment on whether the car insurance is cheap or expensive

Do you pay your council tax over ten months? If so, ring them and get it changed to twelve months especially if you don't repurpose the money you save by not paying feb/March. Not a massive saving bit if it's going to be tight it all helps.

Menu plan, shop your cupboards/fridge etc before you go shopping. If you want to shop in Tesco or Sainsbury's, use the scan and shop so you can see what you're spending as you go to help keep you under budget. Work out needs over wants and make do with what you have at home already.

Phone bills could be cut further, I pay for 4 phones (me and 3dc) for under £30 with smarty.
Food bill for four of us one with a severe intolerance - £40 a week.
pet insurance seems a lot could you do a comparison site check?
Pay Amazon annually (it's cheaper). Do you need Netflix and Amazon? Only pay for one Netflix screen. Don't have a TV license if you have Netflix and Amazon.
Reduce leisure fund massively.
That will be a good start.

Fair enough to make changes that won't impact in your quality of life e.g. cheaper mortgage and broadband, but when it gets to cutting out the fun bits, then perhaps it's worth questioning if your new business plan will generate enough money in the longer term to live comfortably.

Wouldn't it be easier to get a different job that you prefer or do something part time whilst building your new business ?

@Lockheart

For two cars you pay £110 x 12 = £1,320 a year?!

That seems very steep. For my car I used to pay no more than £300 per year and this was 5 years ago. You need to look at this and use comparison sites.

Agree with all the other comments about slashing the leisure and discretionary spends.

We looked at all and cheapest for us was 900, 800 with me added... I know people who paid 3k a year (though a new driver). I also saw with my own eyes someone being quoted 10k😂😂😂 They did not want to insure him😂 As pp said. It's VERY individual. Postcode, ncd, age, car, employment status, foreign name. All that shows on price

Try this... www.moneysavingexpert.com/family/money-help/

The only way to hammer down your costs is to look at everything bit by bit - which includes everything you spend!

Would love to know how people spend less than £300 on groceries! We're about £400-600 for the two of us Didn't realise this was a lot

Look for a better interest rate on your mortgage. I’m on a fixed rate two year deal with an interest rate of less than 2.5%. You could save a bit there.

Leisure is quite a big expense for you. You could look at reducing that, and setting a ceiling budget of perhaps £300 per month.

Drop your food bills. We made a big dent in ours by having two vegetarian or vegan nights a week and one night eating something really cheap, like jacket potato and beans or dhal and rice.

Sell one of your cars. Even if it’s the old banger, someone will want it and you then won’t have the running costs of petrol, MOT, servicing, etc, going forward.

Check all your insurance and energy bills in case there’s a cheaper deal somewhere.

Finally, find some way to earn a bit extra while you’re starting your business. My husband and I made a commitment to raise an extra £500 a month for the last six months to help me cover startup expenses. We ebayed stuff, sold ideas and stories, I got interviewed in Take A Break magazine - just whatever we could think of. It funded my website, some advertising costs, a pro photoshoot for images - all the stuff that would have been difficult otherwise.

Happy to chat further as I’ve recently started my own business so may be able to answer some of your questions as you go through the same thing,

Mortgage 785 (interest rate is 3.5) so probably could get this down - if this is a variable rate look to remortgage you a fixed rate. Rates are rock bottom atm. My mortgage was 2.04% at 90% LTV for a 5 year fixed as I was convinced rates wouldn’t go any lower. They are lower now!

• council tax 100
• electricity and gas 100. Switch energy suppliers. I live in a 4 bed with 2 x adults and 2 x kids and pay less than this.
• Food 300 - a lot for two of you and a dog. Do you buy lots of read meals, etc. This a very expensive.
• Leisure incl takeaways, clothes, socialising, holidays, personal savings etc 500 for the two of us. Minimise this. You don’t need coffees, etc at £3 a pop.
• Netflix, Prime 30
• 2 x car insurance 110. Are you very young, have sports cars or loads of points! Mines about £200 a year. When I had a 2l Audi it was only about £350. When this comes up for renewal use a price comparison website.
• Petrol/car maintenance 200 - depends on how many miles you are doing!
• insurance home/Homeserve 50. I pay £220 per year for a 4 bed house in an OK area. If you cancel the Homeserve they should contact you with a £1 a month deal if you really want it.
• water 30
• Internet 35 - expensive. Use a price comparison website to reduce this.