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?

How much longer will you be paying nursery fees? Is there light at the end of the tunnel?

Luckily they will drop down to around £850 in September and then DD starts school the following year. Its good to know the situation SHOULD improve but I am always conscious things could change e.g job loss/illness.

Thank you and agree - chatted with DD last night and suggested we use the joint account for all the bills that we do not touch, a starling account for food and a separate account for miscellaneous. I am also going to start a 50pm separate savings to allow for the unexpected spends like the sodding passport.

Sounds like a Plan. And you have an end point, so it is just for a few more months

we have savings too, but I am not sure you need more than an instant access account for that £50 a month at present.

£400 isn’t a lot to cover all the additional outgoings for a family. I mean it obviously would be a lot to many but it obviously isn’t to you as you’re ‘ploughing’ through it. We would do the same so I’m not judging. I have been massively struggling with our budget of late and have felt totally out of control. The only thing that’s helped me get my head around it is being more realistic about ‘left over’ money.

After bills/nursery and essential direct debit outgoings we have approx 1500 to live on.
That roughly breaks down to
£800 food/groceries
£100 nappies/wipes for both kids (one needs disability nappies so cost is higher)
£200 annual cost contribution (car expenses x2, Microsoft, internet security, home insurance, vet bills…etc)
£80 family clothes
£100 special occasion gifts/cards/food
£100 ‘one off items’ contribution (furniture, child equipment, replacing electrical equipment, new kids shoes…etc)
£50 house and garden maintenance

£150 misc (forgot lunch, coffee, ice creams, eating out, days out)

You take your monthly bills into account but maybe try roughly adding together yearly expenses you pay (car costs/vets bills/insurance/ internet protection/Microsoft/memberships…etc) ours came to around £200 per month averaged out over the year and did explain somewhat why we were always dipping into savings a few hundred a month

Have you thought about moving area? Your rent is huge for accommodation for three people. Close to us would be £7-800 maybe £1000 for something really nice (South Yorkshire/North Lincolnshire). Nursery is also cheaper max £50 a day. I know people who live close to us who commute to London as it is cheaper and quicker by train when they take into account all the costs

400 isn’t a lot, so don’t beat yourself up. If you split it 3 ways, you can see where the money is going, e.g. the speech therapy and new shoes from DD’s virtual pot, the dentist from your pot and the passport from your DH’s. I would prioritise health, for example if your DD doesn’t get speech therapy in a timely way it could negatively impact her learning. It will get better when your childcare costs reduce.

1480 for rent is really cheap now for SE.

London is where there are the most opportunities for both DH and I careers - we would never earn the salaries we do outside of it. I have a great employer who is paying for me to train up too which should give me more flexibility in future.

Sounds like this is all just temporary then - you'll have a bit more wiggle room in September, so it's worth just trying to keep an eye on spending until then.

Are you.nifty with excel? We have a spreadsheet that we take forward the balance from last month and then set it to show the balance after bills.

So in use, it shows the actual balance and then a projected balance with each DD and food budget taken care of. I update it over a weekend and then I know exactly what I have left and all bills are covered.

@Seasonofthewitch83

Golly that is a depressing amount going on rent & nursery fees! Hopefully you will get some free hours soon.

Would it be worth dropping some hours at work? Once they start school you will still need childcare.

Could you move into smaller place with aim of saving up for your own place?

I was just going to suggest YNAB too, it's fantastic. Does cost but pays for itself

There’s a free budgeting spreadsheet that is a brilliant starting point. It helped me to budget monthly for annual expenses such as Christmas, birthdays, car bills, holidays etc.

I bank with Starling which also have saving spaces. They are mini accounts linked to my main account that automatically set up a transfer each months…I have pots for food, holidays, Christmas, birthdays, car, house. You can also spend directly out if those spaces so it really helps me keep me in budget with my food shopping as it’s so clear to see how much is left at any point in the month. It also lets you analyse your spending at the end of the month.

I check my spreadsheet is up to date every month, changing any payments immediately . I check my bank every couple of days.

I’ve always struggled to manage my money but this method has changed everything for me.

https://www.moneysavingexpert.com/banking/budget-planning/#planner

If nursery fees go down in September, then I think you just need to be very careful over the next few months. You mention a speech therapy assessment, and I get why that might seem essential right now, but could it wait until September, or could you use the NHS? Or could you save for it over a couple of months?

Obviously there are some things that are urgent/must sort right now, no matter how much they cost e.g. your tooth, visa stuff etc.

But for the next four months, maybe it is also a case of going "could this wait until X time" "could I save up for this"? Having £400 left to cover clothes, toiletries and any socialising plus any emergency spends is not really a lot (I know some people have far less, before anyone slates me)- so sometimes it has to be a case of "I can't do this right now".

I know that's really tough, but if it's only until September, it's perhaps manageable to avoid getting into a lot of debt?

I do think separate accounts can help with this, too.

YNAB is the most incredible budgetting app ever. You have all the little pots but you get to dish them out however you want every month.

It's £80 a year but saves me that easily in stuff I don't buy because my pot has run out.

YNAB will help you do this - put money aside for known unknowns like car repairs and presents and kids new clothes and all those things we needs to spend money but don’t ever include in standard monthly budgets that only really think about bills. It’s great for helping you notice unexpected ways you’re spending too, so you can either adjust your budget or adjust your habits

I would suggest
• looking at better deals for everything from insurance to phones and water
•look ahead to Christmas and see if you can knock anyone off your present list. (We only buy for immediate family under 18 not friends or neighbours). Also cut down on what you buy your own DC. We don't send cards don't buy Christmas themed things like pyjamas or spend more than we would normally do on a roast.Work out the total cost of the festive season and divide by 12 and save that each month.
•Agree with friends not to buy each other birthday presents.

I have a weekly budget and draw cash and leave my card at home. It's far easier to stick to and I am less likely to impulse purchase. Perhaps try it for a month and see what happens?

The Chase bank account does this, free and pays 3.1% interest plus 1% cash back on all spending for the first year. It's a debit account not credit but it's a super easy to use app and account.

If budgeting to the granular level won't work for you try spending only £70 a week or something.

Food and household items like washing liquid etc eat through it quite quick these days.

Ah yes this is a good idea too

I highly recommend Monzo.

This is good advice, you can even spilt into envelopes for specific areas. The only downside is its harder to do analysis. Have you ever extracted your spending out into Excel and categorised it? You will be shocked

I know we've said it before, but YNAB does all of this. It really is so helpful.