Budgets advice please?

[Budget37477483]

I have never done budgeting before (apart from when we were saving for our house where the rule was don’t spend!).

I want to make something achievable that we can stick to but is also not too tight.

We are a family of 4 - 2 adults, 1 3yo, 1 newborn.

I have set up new accounts for family spend and a personal each for DP and I for monthly spend.

Is 1k per month family spend a good number? Ie. For everything like food, shopping, day trips, kids, activities etc. just general monthly spend.

£300 each personal for things like hair cuts, clothes, random Starbucks, gifts, our own personal savings.

I know there are lots of people with much higher earnings, also those with much less. But for your average professional family living a comfortable but careful/ considered existence does this seem reasonable?

Thank you 🙏

Would start with

Total net income

Less
Essentials/Must pay items:
Mortgage/Rent
Car Insurance
Health/Life insurance
Electric
Childcare
Telephone
Grocery

Less:
Average unexpected - Wasing machine breaks down, car needs repairs etc (This is your buffer)

Less Desirables:
Hair cuts (typical spend x times per year etc
Activities etc

Use your previous spending to determine most likely future spending.

A baby won't cost the sane as an adult

This is ours…we average 7k per month with no OT. Any OT is put in savings.
Housing
Mortgage: €1900
Utilities
Electricity €200
Waste collection: €30
Broadband & TV: €70
Mobile phones x3: €60
Total Utilities: €360
Food & Groceries
Groceries & household food: €600
Dining out / takeaways: €200
Transportation
Fuel: €250
Car insurance & tax: €150
Maintenance & NCT: €100
Public transport / Parking: €20
Total Transport: €520
Education & Kids
School books, uniforms, fees: €50
Activities, sports, clubs: €50
Pocket money / treats: €50
Total Kids & Education: €150
Entertainment & Lifestyle
Family outings, hobbies, gifts: €200
Subscriptions, books, etc.: €60
Total Entertainment: €260
Savings & Miscellaneous
Emergency fund / Savings: €1,400
Holidays (monthly allocation): €300
Clothing: €130
Miscellaneous buffer: €180
Total Savings & Misc.: €2,010
TOTAL MONTHLY SPENDING: €7,000

Personally for me £1000 a month isn't money I could throw down the drain on regular luxuries but your income/outgoing expenditure isn't going to be the same as mine.

I budget by
○ totalling up my regular income. (I don't include my monthly CB paymeny as that is purely used for DC's stuff that I buy in bulk)
○ Listing outgoings, bills first, then essentials like food, travel, etc, then the rest.
○ Total up the difference between the above so I know what is left over.
○ 1/3 the remaining balance between Savings, Luxuries and Just Incase funds.

Go through your bank statements for the last 6 months and categorises as best you can everything

our categories are things like food, household, clothes, alcohol , presents , nights out , petrol

within food we can separate meat from veg as well
petrol can be split into everyday and holidays

and skim the other 6 months for the stuff like house insurance and car servicing that occurs less frequently

then you will see how much you now spend on evrrything

and make your choices from that

if you would need more than 1000/300 to maintain your current lifestyle , do you want to increase your allowances or would you want to cut something - and by havibg the itemised accounts you can decide what

Thank you. This is really helpful. I have done this exercise and believe I know how much the fixed expenditure is.

I tried since January budgeting the grocery shop which is our biggest variable. And some weeks I have smashed that!

However as everything comes out of main accounts it just is a muddle. And we don’t ever seem to have anything left over for holidays or big expenses. Which makes no sense as we earn plenty IMO and when we do have a heavy month for annual expenses (car tax, insurance etc.) we are able to absorb it. So we do have capacity and I don’t know where the money is going.

So my idea is to give us each cards with a set amount on that we can spend.

I am just wondering whether 1k is too much or too little for household.

Personally for me £1000 a month isn't money I could throw down the drain on regular luxuries but your income/outgoing expenditure isn't going to be the same as mine.

It’s not luxuries necessarily it’s everyday spend. So £230 a week needs to include everything we tap and go on like food shops, kids stuff, days out, clothes for kids etc.

My food bill for family of 4 is around 200 a week. Plus odd takeaway, meal out, etc and 1000 a month is easily spent.

Try it for 3 months and see if you need more/less.

But this depends entirely on your actual income and fixed outgoings, which is what people have said to you.

I couldn’t do it, no. We spend about £2000 a month on food, which would include some eating our, maybe one takeaway. So your £1000 wouldn’t work for me.

But if I was a single parent with a take home pay of £1800 a month, it would be too high.

You are asking people for answers without giving enough information for them to be able to actually answer.

save yourself time and energy and look through your past statements and card bills

ans drill into food more if that’s you big spend - why are sone months ok and others not

This is completely where we are.

We spend that and more but where does it go!? On paper it’s a huge amount. In reality easily spent.

Pre Christmas we could spend £250 a week on food shops, but then I started the meal planning and whilst not consistent with it. If I really focus can get it down to 55-100 a week.

So really I am thinking we are just wasting money either through disorganisation, for convenience of just because we aren’t limiting ourselves.

for a healthy diet with fruit and veg , little UPF and some meat you should be looking at a minimum of £50 per person. ( less for the kids )

my guess is if you spend 55 in total one week you either eat out a lot or eat up stuff in the freezer which then needs replacing

Our take home is just over 5000. Fixed expenditure 2.5k.

So we have 2.6k to spend on everything else and currently that’s all just being spent.

So I want to do:
1k split into short, medium, long term savings
1k family soend
300 each personal spend

As you say we are probably living beyond our means and need to find a way to pullback without affecting quality of life.

300 personal spend seems a lot to me which is why I really think you need to do some better analysis

That was an anomaly and didn’t include any big kitchen spends (like olive oil) or household bits that week (like cleaning/ toilet roll etc).

But it was a full meal plan quite incredibly. I used an app called cherrypick and searched for cheap meals and rationalised the ingredients by choosing meals with similar items. It tracks UPF also and I think it was near 0 that week! So I was very chuffed with that and it’s part of what’s making me think this spend of ours is entirely unjustified and frankly embarrassing.

Yes this is because sadly I smoke and my partner has a Starbucks problem 😬

That makes sense, when I initially read your OP I assumed the £1000 was just for regular beautifying and Starbucks every day type luxuries. Obviously, I meant that I don't have the ability use money like that.

Of course £1000 is easily spent though when you add up all the weekly random tapping though. This is why it's good to keep an eye on that if it's dwindling down to nothing quickly and preventing you doing things you want to do like holidays.

I found it helped to draw out the left over money from the main account after bills,etc in cash or into a personal seperate bank account so you knew that was your budget for the week/month that could be happily spent on those frequent on the go spends.

For what you’ve listed, the adult personal vs household split looks a bit out of balance. If it’s £1600 total, then household life will be running on a different budget point to the adults.

£1200 and £200 each will probably put things feeling like more balanced.

For the holiday and MOT etc, putting money away each month into pots for those kind of things really helps with budgeting. Eg. Holiday is £200 a month into the holiday fund. annual bills is £x a month into the annual bills fund (work out whatever it needs to be and then add 20% for price changes and unexpected stuff).

Putting that deliberately aside then helps makes the monthly other stuff seem more meaningful.

Wow thank you so much! This is exactly what I was after!

Right going to change that to 1200 family and 200 each.

The 1k I have allocated to savings goes into different pots:

Main Savings - £250
House renovations - £150
Holiday - £150
Allotment / Garden - £50
Annual expenses - £150
Slush - £250

The idea with slush is it’s essentially family spend extra (for a long or expensive/ or more luxurious month). Hopefully we won’t need to use it often and it will build up so that when we do need anything extra we can use it. Once we reach £1000. Going to put anything extra in the other savings pots.

Thats the plan anyway 😬

I mean, you’ll need to see how it goes - but that’s probably more in proportion.

As you settle into it, see how things go. You might find that the adults have different casual spend and you might be ok with that. Eg. Ladies hair cuts tend to be a lot more than mens. Some hobbies are more expensive than others.

(also, look at the holiday total for the year, that’s maybe quite low for more than one family holiday a year, but the slush may balance it out).

Thank you, yes it is quite low. We are aiming for one abroad holiday a year.

We are very close to finishing home renovations. Just decorating room by room now and mainly have all the furniture. So hoping once we get past that, and also get past the childcare days (huge chunk of our fixed expense) that we can allocate more.

I would really like to be able to afford skiing. That is a priority for me when the kids are older. So would need to work on our overall income also for that one.

Woo hoo! 7 Meals for £65 with a fruit bowl top up.

I am hoping to make you proud with my UPF values 😊 😂 There is some squash and some freezer nuggets and fish fingers as although we cook this lovely food and put some on his plate - my son is hell bent on eating rubbish unfortunately and we do need back up if he does on hunger strike. So this is throwing out my UPF score.

Doesn’t include breakfast bits as we have those already for this week. And will need to top up with milk and bread etc in the week. Nappies from Aldi. But super chuffed with that.

Off to a good start 🥳

This is quite impressive no? Not quite the MN ‘feed a family with one chicken’ for a week but I am getting there 😅