Why are we struggling to stay in our budget!

[Seasonofthewitch83]

I feel like every month we overspend (not on anything extravagant but everything seems to add up - a birthday card, a new secondhand pair of shoes for DD etc.

I struggle to budget on a granular level because I cant keep track of it - I dont think I would be able to budget so specifically e.g £10 a month birthdays, £20 a month toiletries.
On paper we have £400 a month left after bills/travel/food/nursery. So this covers DD activities, clothes, toiletries, a treat coffee out etc. Yet every month we seem to plough through this with nothing to show for it.

Is there an obvious way to manage this that I am missing? Would it be worth opening something like a joint Monzo account for the 400 so DH and I can use this for all additional spends to manage it?

You know it's £400 after bills. So put that £400 elsewhere and leave your main account alone so only bills come out of it, no discretionary spending. You could budget the old fashioned way, cash in envelopes, each labelled with the expense they're for. You can open separate cash card accounts with banks and use them to save for bigger things eg a holiday, car repairs, emergency fund etc. Or use something like Monzo. By splitting it up in some way it's easier to see when you're spending it and when it's gone!

If you're struggling, you're not going to be able to eg have £10/pcm for birthdays. Limit it to your DP and DC, tell everyone else you're not able to afford presents any more. Only buy a birthday card if you're going to a birthday party, otherwise just send a text. £400 isn't going to go far if you're spending it on lots of little frivolous things like this. Think twice before you go out with friends, go for a coffee instead if you can just because it's cheaper and stick to just the coffee, no cake etc. Soft drinks in the pub and don't buy rounds just your own. If you're out never buy food/drink, wait until you get home or if you know you're going to be out for ages, take a packed lunch from home. No more magazines or books, get books from the library. Meal out needs to become a treat for a special occasion not something you do for fun. Clothes etc when you need them not just because you're tired of the old ones. No expensive beauty products. If you're running out of money it's because you're living beyond your means. £400 after bills is enough, just not for a luxury lifestyle or to spend unconsciously, you need to be mindful of where every penny is going.

You are right, but christ what a depressing way to live. I grew up poor, through hard work and sheer luck upped our household income and now we are back to second hand shoes and coffees being a treat. Household income is £70k.

Broaden the categories and accept that when it's gone it's gone and you've to wait for the next month before spending from that category.

My categories look like this:

• food shop (including toiletries)
• pet expenses (including vet for vaccination etc but excluding vet for illness or injury)
• socialising for me (birthday gifts would come out of this)
• DC expenses (so new clothes, soft play, zoo trip etc comes from here)
• car expenses (fuel, MOT, tax, insurance, repairs, and anything left over goes towards the cost of purchasing the next car when the old one dies)

-annual holiday (that's the cost of holiday and spends)

• emergency fund (anything unexpected and one-off eg long journey that uses loads of fuel, pets needing vet, stolen handbag, broken furniture or white goods etc)

Divide up your £400 into your broad categories, not necessarily equally. It doesn't matter if you have a cheap annual holiday but it does matter if there's not enough left in the car fund to get it through the MOT. Don't over spend on any one category, when it's gone it's gone and you've to wait until next month to spend from that category again. It's not fun being strict with yourself like this but it is necessary if you're to have any balance in your life and for it all not to go on eg Starbucks then you're left at the end of the month wondering where it all went and why you can't eg replace DC worn out shoes.

Thats a good idea - thank you!

Is this a joint account and both you and dh spend from the £400? Cos I'd find that really hard to track.

If it is, then what I'd recommend is having a joint account for the monthly bills and a joint account with a decent interest rate for yearly bills (transfer enough each month from the monthly bills account). Then the leftover can go either 50/50 into personal accounts or a joint one for spending.

It's a depressing thought to need to live this way in £70k. But when you get used to it it's not depressing to do it, because by organising it you achieve balance, control over your finances and some element of choice. Fun in moderation while knowing you can afford life's essentials is better than no fun at all because you frittered it, together with the stress of never knowing how you'd afford an emergency. It'll be an adjustment of mindset if you're not used to it and used to just spending on whatever until it's gone, but it's honestly not the end of the world once you're used to it.

I think you need to start keeping track very carefully, so then you will know how much you have left for toiletries etc. When I'm on budget, I know I can't afford much and I need i.e. foundation, then I look at budget options, up to £10 etc. I would also say, it's not entirely your fault etc. etc., life just got unbelievably expensive. I really to struggle within my budget, I exceed very often.

Write everything down, a little notepad will do, and you can see where it adds up. Coffee's were a big one for me until I changed my ways about 5 years ago, takeaways? Second hand cheap clothes add up .... £400 seems enough but track it and see

I don't find tracking my spending depressing, it's just an admin task. It makes me feel in control and it removes any guilt or stress when spending as I know whether I can afford it.

£400 seems quite a low amount left over from 70k to cover everything including stuff like birthdays, clothing and emergencies? Is it literally just the childcare costs taking up all the budget? (We are abroad and I realise that childcare is much more expensive in the UK) Do you have debts?

Maybe it's worth looking at the wider budget to see if there's anything you can cut out or get cheaper?

I don't budget specifically either. All of our miscellaneous spending money goes into a Revolut account that DH and I both have on our Google Pay. I put it in weekly rather than monthly though because we stay on track better that way.

YNAB is awesome and it helps you to save money. When you see where your money is going and what you can't spend it on, it helps you to prioritise and trim.

They do a 34 day free trial, so it's worth giving it a go.

£400 isn't a lot left after bills. I am baffled that this is what is left from £70k though. It's more than we earn between us and we have mortgage of £1k a month. We have more than £400 between us for spends on clothes & birthday gifts etc.

We don't have car loans & things like Sky. What are you spending all your money on?!

Excel, separate pots and tracking spending (and predicting it). I know you don't want to do it that way, but it's the most sensible, otherwise, like you say, £400 sounds loads, but map it out and you'll recognise the limitations and be able to plan accordingly.

Have you reviewed your costs to see if you can make savings?

How much do you spend on phones, broadband,TV packages? If you're paying full price you can cut the cost significantly by always being on a deal and tweaking what you buy eg Now TV instead of full Sky.

What do you spend on groceries? If it's way above average you could reduce it with minor changes eg whole chicken instead of breasts and use for two meals, other cheaper cuts or types of meat, less meat, normal broccoli instead of sprouting, frozen fruit, less waste, etc etc.

Season passes and a picnic for days out rather than pay full price at the gate and eat in the cafe, which is usually poor quality, overpriced and at the end of a long queue anyway.

You get the idea. £70k is an above average income but its unlikely to be enough to be able to spend without thinking, but it could well be that you could noticeably increase your spare money if you make a few minor changes.

Also remember that some of the things you mention are essentials that need to be budgeted for, so you might not have £400 spare as you haven't accounted for all essentials, eg children's clothes and toiletries.

But there are still savings to be made. For toiletries (and cleaning products) just get what is on offer or get from Home Bargains.

I've seen a few threads recently with people complaining that things like deodorant or toothpaste now costs nearly a fiver, but that's only of you choose to buy the expensive version. There's always something perfectly decent on offer for a pound or two, so why not buy that?

Children's clothing, can you get second hand bundles from ebay, Vinted etc?

There's obviously things you really can't predict like an unexpected car repair, burst pipe, so I'd think about putting something like £50-100pm aside for those. Then look at what's coming up that month, birthdays, clothes, outings you'd like to do and prioritise, ie new pair of shoes more essential than £20 birthday present and having a coffee out.

Yes, childcare is £1615 a month! So in theory we are meant to have 2k leftover a month. Luckily our bill will be halved from September.

my bank account tells me how i much i have, when the direct debits are due
there is one that always takes me by surprise as it isnt a dd but comes out at the same time every month
i check the bank every day

Our nursery fees are £1615 a month!

Rent is £1480 and now far under market value.

We spend £100 a week on food, dont socialise, dont buy new clothes for ourselves. Our splurges are Spotify premium and amazon prime.

I think this is what I am going to do - automatically put 50 a month away for unexpected expenditure.

Had another thought, do you keep an eye on what you're spending on other things like energy and food? We went through extremely tough times when DD was little and I cut back massively on food (because we had to) - we do have treats now (ie have just come back with hot cross buns, custard tarts, got some reduced salmon fillets in etc) but some of those adjustments are long embedded now and I can easily keep our food budget to £50pw for two, around £60pw when DD is home.

We try really hard to stick to our budget, and tbh I dont want to reduce it further. We don't have hobbies or social lives really, no gym memberships, do not get nails or hair done. Atm life is that endless cycle commuting and working for 12 hours a day cycle with nursery drops and chores. Weekends we do free/cheap activities - I think cutting out little luxuries from the food shop would tip me over the edge into misery!

Another YNAB fan here!

You have had some good advice so far, what works for us is a bills account for monthly direct debits, an account for the annual bills for insurance and car costs and holidays, and a third account for the left over money to spend on the things you mention in your original post.
Your rent and childcare are both horrendous, and things will be better when childcare reduces.
£70k is not much and when you take off the rent and child care it is a tiny amount