How much personal spends do you have?

[WhatsAppening]

I want to start getting better control over my spending. I’m thinking about allocating myself £400pm cash so I know when it’s gone it’s gone.

Currently I just whack everything on the credit card and don’t really think about it, we have no savings and a little bit of debt. We’re not struggling at all but I would like to be more secure with savings and start really hammering the mortgage which is currently nearly £400k with another 23 years to go.

DH would like to semi retire in about ten years.

Income is c£5000pm sometimes up to £6k if DH or me work more hours (we both get paid overtime). DH earns the bulk of the money so I want to stop being such a spendy bastard so he can start enjoying it.

Is £400 fair? DH would also get the same amount, although he won’t spend it.

I’m a dirty smoker, and my hobbies are eating out and drinking wine. I don’t really spend on much else. This will be a budget cut for me.

Any tips on how to do it? I’m terrible for frittering so cash is going to make me stop and think.

AIBU to think £400pm is loads of money and I will have no problem sticking to it? Or am I setting myself up to fail miserably?

We have been £400-£500 each per month personal spends each (all bills and Dds are accounted for even luxury ones like Spotify etc before spends are allocated) but DC stuff is separate, we have a separate account for his spends as it was all coming out of mine, mainly due to me being more likely to actually go to a shop that sells something other than beer or comic books. I find it more than enough, DH is like you, spendy and finds it tight, but once it's gone it's gone.

@PersonaNonGarter

I think this won’t work unless you do a proper deep dive into your finances - and then see how much is left to spend.

You must be pretty spendthrift to get through £6k on ‘mostly food’ impulse spending. How much are you spending on wine?

I’ve done the deep dive! I have a spreadsheet and everything. All bills, payments and food/petrol accounted for. This division is a third each of what’s left; the other third going into savings.

Also I wasn’t spending 6k a month!

Tbh, from a quick glance at what you’ve said - you drink way too much and you are probably overspending as part of your chemical stress and anxiety.

If your DH isn’t spending like you, then what does he think? Does he mind having no savings and ‘a little bit of debt’?

I’m like you, cigs and wine.
DH has just come back from Spain with 400 cigs. He commented that it would save around £200.
That was an eye opener

Another who personally who has nothing like that amount, but that isn't relevant really. You and your dh need to decide what you can afford.
I'm inclined to agree that is you have an income of £5K - £6K pm and have no savings, I'd be having a serious overhaul and finding out where that money is going.
I would allocate 'spending money' after all the bills and after overpaying the mortgage and after pensions and after building up some savings. Having £400 each every month, for treats seems somewhat odd to me if you don't have savings - even more so as you are talking about early retirement yet you hare in your 40s and have 23 years left on your mortgage. It doesn't add up.

I think 400 each is a bit much if you are only saving 400 a month

@WhatsAppening What I find helpful is to put money into mortgage. Check with your mortgage provider how much you can overpay without incurring fees, its generally 10% and with your big mortgage of 400k, you should be fine overpaying by quite a bit. I do this and my mortgage is £310k.

Basically, I try to pay something into my mortgage everyday. It can be something as small as £5 up to £50. But cos I do it everyday, I usually end up overpaying my mortgage by £1000 every month. Aim to overpay your mortgage by X month. I don't know what your mortgage interest rate is but it is probably higher than your savings account interest rate

Of course have an emergency fund and all, but since you have a large mortgage, mortgage overpayments make sense and its money that you can't spend once you pay it out. You can also pay into a savings account everyday but due to inflation and low interest rates, I think mortgage overpayments make sense. Your spending will naturally decrease. You can't even whack it on the credit card because you know there would be little money in the bank account to pay it- have a good habit of repaying credit card in full at the end of every month.

Downsizing is a big part of the early retirement plan as well, kids are 17,18 and 9 so we won’t need the big detached house in ten years time. The more inroads we make into the mortgage/savings, the better we’ll be at that point.

£400 sounds fine. Can’t quite believe you bring in 6k a month & have no savings! We have a similar income & save 3k a month. Good luck with it though.

@FrownedUpon

£400 sounds fine. Can’t quite believe you bring in 6k a month & have no savings! We have a similar income & save 3k a month. Good luck with it though.

Wow! We don’t have £3k a month spare to save, the bills come to more than that. Mortgage and council tax alone is 2k.

I spend a lot more. Where does your 5k go?
I have around 2300pm income from ft work.
600 all bills inc mortgage
300 food monthly
Spend about 1400 pm. Looks bad like that! I do save intermittently for big purchases.

Here’s the breakdown.

I genuinely thought we’d be living the life of Riley at this income level, it’s funny how the outgoings increase. We were on less than half this ten years ago.

Oh I thought I’d deleted the first one. Ah well, the dog’s name is Monty, I’m completely outed now

Honestly, zero.

It’s not fun.

You're paying nearly £250 pm to Sky? That's an enormous amount of money, what is it for? You could probably reduce it significantly.

Do you have two pets? Pet insurance is listed twice.

@WhatsAppening is the car and wardrobe payments instalments? In future, maybe buy all consumer goods including furniture in cash, you wouldn't overspend that way. Buy mobile phones in cash and get giffgaff pay as you go at £10 per month.

I don't have sky tv, do you really watch it a lot?

Sorry, nearly £270 pm to Sky. Even more money.

For comparison, our TV, fast fibre broadband and landline costs, but admittedly only 2 mobiles, but these don't have to cost much, are £60-70 pm depending on which we have out of Netflix, Prime, Now etc, we generally have 2 at a time and swap around.

We have the full sky package with the fastest internet, and 4x mobile contracts. It’s eye watering but there’d be riots if I cancelled it.

And yes we do watch enough tv to make it worthwhile.

How much is your DH paying into his pension?
You could trim some of those expenses.
I totally agree with your point on how outgoings seem to increase when salary increases. Things become normal but they are actually luxuries.
Check out your Sky package, we have 4 Sky Q boxes and all channels apart from Sports and ours is £65 per month.

Two pets on one policy, the big dog on a separate one because he came later.

Sorry just seem it’s 4 phones as well.

If you want to keep Sky, you can negotiate the price down by threatening to cancel.

What is it that you watch? Now TV gives you movies and Sky 1 and a load of other channels for about £25 pm and you don't even have to pay that because there's always deals to be had.

How long will the debts last? Once they're paid off that's another £350 pm available to throw at the mortgage.

You say you often earn more than £5k pm. Do you save more in those months or does it disappear? Perhaps try to be more focused with where that extra money goes?

I think it’s more than doable.

I am also guilty of mindless spending. A coffee or bottle of juice when I don’t really need it, picking up a bottle of alcohol that I don’t really need, food treats at the weekend etc Throwing new jammies in my Tesco trolley, saying yes to random things that the DC ask for buy don’t really need etc etc

We still do some of this but I’m more mindful now and try to think “do I really need this” before I spend. Sometimes the answer is no, but I want it, and that’s ok because life is for living, but being more mindful has resulted in me spending far less.

WFH during a lot of the pandemic has helped a lot as I’m not near the shops as much.

I could easily pop into the local co op for bread and leave with £50 worth of shopping that we didn’t strictly need. Or pop into Tesco and buy new jammies etc that, although I will use, don’t necessarily need.

Could you go for some zero spend days? Commit to not spending any money - when at work, for example, what do you need to spend money on? If you aren’t eating while there then you don’t need money for food I assume? Stop going into shops on the way home unless you absolutely 100% have run out of something that can’t do without.

We are also online shopping for food now which does help as it means we aren’t sucked in by the offers for things we dont need.