To wonder what's going wrong with our finances!?

[pondering12345]

In the process of moving to a joint account with DH, so using this opportunity to review our monthly finances:

Income
DH take home pay £2600
My take home pay (part time) £1075
Child benefit £145
Total income £3820

Expenses
DH car loan £270
My car loan £160
Mortgage £645
Water £60
Gas and electric £250
Home insurance £15
Broadband £25
Council tax £190
DH credit card £110 (we each use our own credit card for any purchases for ourselves and pay off the following month)
My credit card £100
My phone £35
DH phone £35
DH car tax £20
TV license £15
Zoo membership £20
Apple Music subscription £15
DH contact lenses £40
DH haircut £15
My haircut £20 (£60 every 3 months)
My nails £30
Window cleaner £15
DH petrol £100
My petrol £100
Food £450
Takeaways (one per week) £150
Kids hobbies & swimming £100
Date night £50
Disposable income £500
Total expenses £3535

This leaves less than £300 per month to put towards tonnes of other expenses - annual car insurance, gifts, Christmas, holidays, kids clothes, home and car maintenance etc.

Where are we going wrong here!? I don't feel like we live a particularly lavish lifestyle.

Presumably this is taken out before "take home pay" so not included here

What are the other expenses going to be?

We used to live pretty much month to month but now we use Monzo and budget for the annual expenses like Christmas, school uniforms, MOT. Even though it’s a bit scary because it gives you a more realistic idea of where your finances are if you do budget for those things it really does help in the long run.

If you find that once you work out the annual expenditure down into monthly amounts that you don’t have enough there then the disposable income needs to take that hit.

There’s no point doing this by half and winging it and hoping for the best. Really try and sit down and work out how much you’d need to put aside monthly to afford the car insurance, MOT, etc and then go from there. You’ve got it a bit backwards atm but it’s a great start.

And get Monzo! Just so easy to sort money into pots and let it build up.

Group it then prioritise it and see how you can cut back in each category. If it feels too hard just pick one thing to stop or cut back on each each month.

PPs are right that your entertaining and luxury spend is bonkers. More than your mortgage!

MORTGAGE - can you get a lower rate?
Mortgage £645

BILLS - can you change provider, get a better deal, what can you stop?
Water £60
Gas and electric £250
Home insurance £15
Broadband £25
Council tax £190
TV license £15
My phone £35
DH phone £35
Window cleaner £15

FOOD - can you cut back, buy non-branded, bulk cook?
Food £450

TRANSPORT - do you need 2 cars, can you downgrade model, car share to save petrol?
DH car loan £270
My car loan £160
DH petrol £100
My petrol £100
DH car tax £20

PERSONAL - can you get a better deal, cut hair at home?
DH contact lenses £40
DH haircut £15
My haircut £20 (£60 every 3 months)
DH credit card £110 (we each use our own credit card for any purchases for ourselves and pay off the following month)
My credit card £100

ENTERTAINMENT&LUXURY - what can you stop doing, do less of or do cheaper?
Zoo membership £20
Apple Music subscription £15
My nails £30
Takeaways (one per week) £150
Kids hobbies & swimming £100
Date night £50
Disposable income means: family days out, DH pub, me meals out with friends £500

I think you spend a lot. £40 on contact lenses?! Have you looked at getting them cheaper, that's crazy expensive. Also expensive phones, nails, takeaway.

Our take-home is a fair bit higher (so is our mortgage) but we spend much less month-to-month.

Op doesn’t understand disposable income…because takeaway money is disposable income, as is kids hobbies, as is anything else that is not a required outlay that you need to pay in order to live (mostly)…

Thin end of the wedge, but my contact lenses only cost me £14 a month.

www.daysoft.com/united-kingdom/

How long earth is a weekly take away £40! What do you have?

Exactly

I earn nearly £200k and I don’t spend on some of those

25% of your food budget goes on takeaway.

Clean your own windows and save £180 a year.

You are spending a lot of money on non essentials. Or things that can be done a lot cheaper. If you spend less on non essentials you will save more. Pretty simple really.

Is there an option for you to go full time to increase your income?
You have no savings and no pension contributions on there. No savings for your child/children.

Cut back on the takeaways and the other random stuff.

Friend died falling off a ladder cleaning windows

Is there an option for you to go full time to increase your income?

That is not the problem here. There are loads of people out there who are in the endless cycle of earn more spend more, earn more spend more.

The way these people get their finances under control is to reduce the spending rather than increase the earning.

Swan korma, caviar naan, white truffle bhaji.

Credit card isn't a type of expense- what are you actually buying on your credit cards? or is this just interest?

Just quickly op: two car loans, nails, takeaways, expensive phones, date night and £500 on pub and meals out with mates! In your shoes I would cut that right down and save £200 for holidays, £200 for Christmas and £200 for maintenance, new white good, etc., and find some more for a nest egg.

Scaling back might include (for example) asking for vouchers for hair/beauty as your birthday gifts, if your family/friends give you presents.

Takeaways on our house are once every 6-8 weeks.

I buy contact lenses from a couple of companies: I’m on email lists and only order when I get a discount code.

I have savings for holidays going out to a separate account straight after pay day. This means when I book something on my credit card, I can immediately pay it off.

I work off the ‘pay yourself first’ rule: set aside your savings and essential budget, before you pay your hairdresser/salon/ pizza house.

This.

Our joint income is similar to yours. I'm not paying £30 a month to get my nails done, I tell you!

I spend loads on myself op: £100 hair, £20 make-up, £15 perfume, probably £150 clothes and probably £250 on bits and pieces (coffee here / lunch there). But I am 62, DC are grown up, everything is paid for, pension is maxed out and I earn more than you both combined.

It sounds as though you have champagne tastes and Chardonnay money.

We have double that a month.
my car was £500 off eBay.
his is through work.
we have gift gaff at £10 each per month.
we don’t use credit cards.
I don’t get my nails done.
we don’t have a window cleaner.
to me your lifestyle is pretty lavish for what isn’t a high income.
There’s lots you can cut back on.

Have you accounted for

Pet expenses
Building and contents insurance
Vehicle expenses like new tyres
Food
Prescriptions
School trips
School meals
Cleaning products
Personal hygiene products
Magazines and newspapers
Clubs and sports expenses

I’m all for cutting back but how many people really clean the outside of their own windows? Having a window cleaner is hardly a luxury item.

In the grand scheme of things the window cleaner money isn’t the issue here. If OP was paying a housekeeper full time I would be raising an eyebrow.

Well you’ve got £500 deposable income, plus a couple of hundred quid on your credit cards - so presumably that’s £700 disposable is it?? Track where that is going but you cannot need that much. I don’t think you need to cut back on haircuts just yet, just work out the frittering..

@Anoooshka probably state pension like millions of other people do. Not everybody has spare money to save for retirement.