How can we cut £1000 a month from our budget...?

[Wibblewobbles]

We are on a pretty good household income but I've just been made redundant from my £21k job and will now be a SAHM for at least a year or so especially as I'm about to go on maternity leave.

After tax and childcare it makes a difference of about £1000pm shortfall in our budget.

Looking at our finances the only thing we can cut down on is the credit card bill - everything else is unavoidable stuff like council tax and mortgage.

Our typical card bill is £2400! I have no idea how we manage to spend this much as there's only two of us plus a toddler... It does include all our food shopping, petrol etc.

I am just trying to work out what we spend excessively on. I realise we're spending £100+ a month on lunches at work. This will be less once I become a SAHM but on the other hand I'll presumably be paying for toddler groups, days out etc instead. But maybe we need to start making DH packed lunches...

I am getting really worried now Didn't even think we were particularly spendy - I try and buy things second hand where possible!

Do you pay it in full every month or are you paying interest? That's a huge amount tbh. We're 2 adults and a five year old and we spend about £700 on food and travel.

We pay it off in full every month without fail, we just use a credit card so we get points, payment protection, easily manage it all in one place etc.

What does the £2400 include? There is me, DH and toddler DS and I am about to give birth. We don't spend more than £1800 a month, most months, including bills. No mortgage as own house outright.We aren't careful. We have no debt. Why do you use a credt card?

We use a credit card for the reasons I mentioned above - the words "credit card" are a bit of a red herring as it's literally no different from us spending it on a debit card in terms of expense - we pay no interest, we never carry the balance over, it's purely for convenience and the benefits of earning points/airmiles on all our spending, purchases being protected, better fraud protection etc.

I am inluding food, council tax, utilities, petrol, house, cars and pet insurance, clothes, entertainment, tv license, treats.

Cut out the lunches & coffees. Plan you meals so you only buy what you need
Check that you're on the cheapest gas/electric that you can be
If you've got Pay TV of some sort then get rid of sports/movies or ditch all together.

If you got a redundancy payment then use it to pay off anything like car, sofas, etc. Or pay off a chunk of your mortgage. While you're looking at your mortgage check to see if they're any better deals around.

It's all the bits and pieces that really add up. So whenever you're going to buy something check if you really need it.

Cash is easier to keep track of each week and keep your receipts for everything

So get out £275 each week iN cash and when it's gone, it's gone.

That way you will be spending £1200 per month which is £1000 less than on Credit card.

Once you have collected your receipts for each week check then to see where you are spending money.

Coffee dates with friends at home are cheaper
Home made lunches are cheaper - make extra for the evening meal and freeze it for the mornings you don't feel like making a pack lunch. That way even when you cat be arsed you don't spend money on lunches as you have a back up plan.

Get your last few statements, ideally twelve months worth. Go through and highlight every essential spend.

Not initially the significant variables but things like mortgage, council tax, TV licence, car insurance, tax, service, house insurance, utilities (Gas, electric, water and landline phone/ internet).

If you subtract this off your annual income (cash in pocket take home) it gives you your baseline disposable income to cover food, mobiles, day to day travel expenses, clothes, birthdays, clubs and hobbies, holidays.

Working out exactly what you have per month helps you to prioritise how you split that pot. Then you can go into more detail and look at where the rest of your spend has historically gone.

DH used to spend an astronomical amount on cans/ bottles of drink from the petrol station and work. It ran towards several thousand a year. He was a single man on a good teacher salary. Now hes a father of three and priorities are different.

You need to do a bit more financial analysis! If you use your credit card for basically all expenses then it's not much good saying "the only thing we can cut down on is the credit card bill" 😄

First thing to do is go through your DDs and SOs. IME, the easiest quick ways to cut monthly costs is usually to ditch things like Sky TV, Kindle Unlimited, Netflix etc. Next go to uSwitch and find out if you can bring down your energy bills. Then look at doing the food shopping at Aldi or Lidl (alternatively you might find that online shopping with your usual supermarket brings your bill down a fair bit).

Taking packed lunches is an easy fix, as you say. Invest in a good thermal cup (Contigo West Loop is leakproof) so you can take hot drinks to the park/soft play/out for walks etc.

Yes Laquila you're so right, we are just delving into the statements and putting it into a spreadsheet as I speak... It turns out last months £2000+ bill included £700 of car insurance (a whole year's worth) and some other 'one-off' car related expenses... The trouble is, there seems to be one-off expenses like this nearly every month!

Perhaps my £2400 estimate might have actually been a bit high though. Whoops. We still need to cut back big time!

We have a similar system using a credit card for spending. Our bill is around £1700 and we have 2 kids so I'd definitely say you can cut down. We don't eat out much, spend about £600 on groceries and £250 on petrol. Can you work out where your £2400 is going?

Check if you are entitled to maternity allowance.

It is different from statutory maternity pay.

We use a credit card in exactly the same way that you do. We're a family of 4 and the monthly bill is £1000. This covers food, petrol and other stuff - clothes, days out. We have our own 'spending money' which is separate to this - it's not a lot, but mine goes on contact lenses, phone bill etc. We keep track of the credit card by writing down each purchase and keeping a running total over the month. It works for us.

Having a seperate bank account for bills and one off payments can make life easier. The £700 car insurance can be accumulated over the year and paid out from the bills account instead of a general spending account.

Do you have a land line? Do you really need it? If not ditch it.
Do you have contract mobile phones? Are you getting the cheapest deal? Hunt around for a better deal?

AppleAndBlackberry That sounds very much like our food and petrol budget actually.

I have just done an average bill over 12 months and it's actually £1800 on average although there are months that are only £1000 and one month that was over £3000! It seems to vary a lot depending on whether there's been a holiday/Christmas/insurance spend.

DH actually keeps a really good track of our finances in a spreadsheet but it's never been broken down to very detailed categories - more like just food, insurance, mortgage, utilities etc. But not to the level of packed lunches, grocery shopping, cafes, birthdays, clothes etc.

On Moneysavingexpert.com, there is a budget planner. It listens everything you may spend out on, including those extras you don't always think off. Use it to work,out what you spend your money on All Year around, and then work,out a budget.

E.g. £700 car insurance, - set up a new saving account and put in £60 each month. Put extra in each month for Christmas, holidays, and other. 'One-offs' such as house insurance, car tax, mot etc. Then when these bills re due, you will have the money ready.

You need to look at all of your spending including bills. There is a lot to be saved while shopping around. Don't forget to check insurance even if you've just renewed as you can still save.

Make weekly shopping lists and menu plan. I find that I spend a lot just nipping into the supermarket for one or two things (that turns into a lot).

Yes I second the MSE Budget Brain. It covers every spend you may have and how to save on each

It sounds as if your grocery shopping is quite lavish.

I spend £50 -£70 week for 2 adults and a hungry teen. And that includes a couple of bottles of wine.

Go through all your outgoings, in detail. Take sandwiches. Check how many subscriptions you have to stuff like Amazon Prime and Sky. Be ruthless!

When we've needed to tighten the belt we take pack ups for lunch, usually leftovers, have more vegetarian meals, get shot of cable/sky, plan a weekly menu. I never buy coffee out unless I'm out somewhere for a day and even then I take a picnic

Thanks for the MSE suggestion. We spent the last couple of hours doing the budgeting spreadsheet. The trouble is as it got later we both got a bit grumpy, like tired toddlers, and it ended in a row over money I am now sleeping on the floor in the living room (despite being 8 months pregnant) as I am too annoyed with DH to sleep next to him

So it turns out we just need to cut out about £500 a month rather than £1000 but that's still easier said than done. We seem to disagree on what's essential and what can be economised on.

I think we are probably spending at least £50-£70 on booze each month which we could drastically cut back on as I'd happily live without wine etc except for occasional treat. He thinks we should get rid of one of our phone bills and have one of us switch to Pay As You Go! I think that idea is insane... I think being able to freely contact eachother easily and send and receive pictures etc is important especially when I'm going to be on maternity leave. He also thinks we should cut our Christmas budget from about £700 to £300 all-in... Yet still wants £50 of that to go on a 6ft+ real Christmas tree, which I think is unnecessary. Leaving me with less than £10 per head on all my relatives who are very generous with us despite being on lower incomes I think we should just buy less steak (which he loves) and eat cheaper meals with less meat, buy less expensive trainers etc. I don't know why we are spending so much on food.

I feel really shit about being made redundant now. I don't think I'll be able to find another job locally that pays even half of what I was on.

If you're at home then you can use wifi to send and receive pictures and you can make calls via FaceTime/Skype/WhatsApp.

I'm on Giffgaff which is pay as you go. Some months I put on a goodybag (if I'm working out of the home a lot) and other months I just spend a tiny amount on calls and use ordinary top up. If you're both on Giffgaff you can get free calls to each other.

This saves an absolute fortune. I've not had a phone contract since 2012. I do buy a new handset every couple of years. Perhaps you need to be a little less rigid on this one?

It sounds like you both need to compromise and be more realistic. If you each had a separate account with your personal disposable cash in it that might help? Your dh can either spend out of it for lunches or he takes his own in from home (that he makes). If he wants wine or pricey trainers it comes out of that. Equally toddler clubs, cafe stops etc comes out of yours.

Do buy less meat. Save steak as a treat. Shop in Lidl - their steak is good and it's less expensive.

Also check that you're not still entitled to smp (you may be depending on dates and earnings) and if not claim maternity allowance.

Now get up off the floor and go to bed. If he had to actually make some hard decisions (ie I have £200 left to spend this month and I really want a 6' Xmas tree and those new trainers that cost £100 but can I manage on only £50?) it might suddenly get easier for him. At the moment it all probably feels very intangible and deciding in March whether to buy a Xmas tree probably feels a bit premature!

You can also sweep any extra money over from your bank account into savings at the end of the month. That may help with annual budgeting.

£100 a month on packed lunches for two people is around £2 per meal. Yes, you can cut back on this but it is not going to come close to helping with your £1000 short fall. So where is the rest of the money going?

What else are you spending money on? How much is your weekly food shop? Do you drink? Smoke? Are you paying for holidays or leisure travel or activities?

You know supermarkets offer the same product (e.g. pasta) at three price points (value, standard and premium). Try dropping back at least one price point on everything - two would be better - where you don't notice much of a difference stick with the cheaper version, if you don't like the cheaper version move to the next level up and try again. That way you are only buying the premium versions when you really need to - not because you are assuming they are nicest.
This also works with things like wet wipes and nappies.