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?

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.

Plus transaction fee free abroad. Really don't need to pay for a budgeting app, between a banking app and (free version) of Excel it does the same thing.

A4 piece of paper with a line drawn down the middle. Income listed on the left, outgoings listed in the right. Add them both up and see what you are left with.

And you can’t afford a take away coffee, stop buying them !

We spend across a couple of different accounts and credit cards for Avios points so can't use Chase as our expenses aren't all through one account.

YNAB is so much faster than Chase and I have 100 odd categories. YNAB calculates how much I need by what date for each thing and auto allocates an amount each month I dont think Chase does that.

Coffees from a coffee shop or a takeaway should always have been a treat.

@cloudonego it doesn’t do quite the same thing. It’s close, but it’s not the same as the full YNAB method which is more detailed. There are a few banks that allow you to put money in pots for things, but YNAB does more. It’s hard to explain without fully using it though

I would also think about things like e.g. with birthday cards, I buy a pack of 10 pretty, blank note cards every so often and then use them. That way your card expenditure is down to 50p, surprises don't mean you have to nip into Tesco express and spend £3 and frankly no one has lost or gained any enjoyment from something like that.

The same can be applied to birthday gifts/anything else you can buy ahead of time when you spot it on sale.

every penny counts op
cards from tesco, never,
at least a charity shop birthday card is nicer and costs far less.

watch your pennies

I’m a fan of YNAB too although wish it cost less. But it has helped me a lot so is worth it for me. Although is still tricky when you just don’t have enough to cover everything you want to cover

@BuffaloCauliflower it would have to do something very impressive for me to spend £80 on budgeting! Excel and separate bank accounts does exactly what I need, it's hard to imagine what an app could do that would be better, and cost £80!

@cloudonego I did those things for years and never got close to where I have with YNAB, it saves me more overall than I spend on it by miles. An excel sheet can’t ‘live’ budget in the way YNAB does. It’s not just the app but the method that you’re working with using it.

@BuffaloCauliflower as I say, unless it's literally depositing money in my account (to the tune of more than £80) it does nothing I wouldn't want to pay for!

@cloudonego that's fair enough 🙂 we all have different needs. But for me it’s been honestly life changing, I never felt like I had a grip on our money (and I grew up in a house that didn’t have much grip on money either, which is a factor) and now I know what’s going on. Christmas comes round and I have a pot of savings for it, car needs repairs I just pay for them, there’s no random subscription charges going unnoticed because I know where all my money goes. Our savings are bigger than ever. My anxiety around money is lower than ever. Some people won’t need that and that’s fine, but when costs are growing and anxiety around money is too it’s an incredible tool for many people.

@cloudonego
The main difference is that it is linked to my accounts and credit cards and automatically brings in every expense on every card (including joint cards so when husband spends) and lets me assign it to a category in a tap on my phone

I spend a couple of minutes once a week tapping expenses then maybe 10 mins at the beginning of the month allocating our income to pots and a 5 minute check in around week 3 to see how we're doing.

There is no way I have the time to take multiple account statements every week, enter into spreadsheet and then try to rebalance budget.

So not only does it save me WAY more than £7 a month by making better decisions on spending but it also saves me WAY more than £7 a month in time. I own a business and have 2 primary kids so time is something I place a HUGE value on!

Another vote for YNAB - it literally allowed me to buy a house as a single person without any family help.

It's life changing, and it's the only app I'd say that about - I have no other subscriptions/ memberships etc to apps because I'm a firm believer in "there must be a free version surely".

@speakingofart but that's nothing to do with YNAB, you could only do that because you had the money to do so. YNAB doesn't change that, apart from causing you to have £80 a year less of it.

There are also free account aggregation apps and tools available.

I heard an advert for Starling Bank the other day and it was talking about exactly the same pots feature that people always say is so wonderful about YNAB. Save or allocate money into pots then spend from those pots for different items. Groceries, fuel, holidays etc etc.

YNAB sounds like a cult, always loads of people insisting that it's the only way and that people must use it. Weird.

A basic excel spreadsheet and monzo pots do everything YNAB does but for free.

YNAB isn't like those things, honestly. It's a dynamic budgeting tool. DH and I have joint accounts. We share our budget. We both have the YNAB app on our phones, so we can record spending and monitor our budget as we go.

YNAB makes you more conscious of your decisions in spending. Every time you get money, you allocate it. If you bump into someone and they suggest coffee and cake, that £10 will come from your 'sweets and treats' category (or coffee and cake, or eating out... Whatever you call it). That's fine if you have already allocated £10 to that category. If not, you have to make a decision - will you send less to savings? Will you spend less at the supermarket this week? Will you put less fuel in the car? - That £10 will have to come from somewhere. Instead of looking at your bank account and thinking "It's ok, I've just been paid and there's £800 in the account", by allocating all your money to your upcoming expenses, you have a true picture of what's 'available'. If you decide to go ahead and have coffee, that's great! Not a problem. But you'll be doing it in the full knowledge that you'll have to save less, put less fuel in the car, spend less at the supermarket, etc.

I apportion 1/12th of the cost of annual subscriptions/expenses each month. That serves two purposes. One, by the time the subscription is due, the money is waiting for it. No unexpected big bills. Two, it builds an account buffer, so if I do have a large unexpected expense, I have somewhere I can pull it from.

I need to work towards saving enough to pay for car insurance, etc., outright because that will save us money on the APR that is applied to monthly payments. In YNAB I can do that over time and keep track.

You're right that you can do all of this with a spreadsheet. But the reality is that it takes a long time. YNAB automatically imports all my transactions, it categorises them, and I can auto-assign the required money, so then I can deal with the rest of my budget very quickly.

We are on a relatively low income, with one wage (DC with SEN) but we have gone from running out of money, to just scraping by, to having a couple of tight weeks, to comfortably managing our money, to having enough budgeted to not have to worry about money. It isn't about how much you have, it's about knowing how far what you have can go and what your priorities are. There are people who genuinely don't have enough money, and they won't find that it is enough with YNAB or without it. But most people have enough, they just spend it badly, and YNAB shines the light on that.

What I don't understand is why people don't just try it. They give a 34 day free trial, so it's worth a go.

So it allows you to sync your budget with your partner? It allows you to see available funds in real time? It imports your transactions so you can keep track?

You don't have to use all the features YNAB gives. You don't need them all. But it's not true that a 'basic' spreadsheet will do what YNAB does, at all.

Instead of looking at your bank account and thinking "It's ok, I've just been paid and there's £800 in the account", by allocating all your money to your upcoming expenses, you have a true picture of what's 'available'. If you decide to go ahead and have coffee, that's great! Not a problem. But you'll be doing it in the full knowledge that you'll have to save less, put less fuel in the car, spend less at the supermarket, etc

Ah, I get it. You need an app to tell you the financial equivalent of where a bear does it's toileting. Okaayyy...

@BarbaraofSeville are you speaking as someone who has actually tried YNAB and decided it's not for them, or are you talking as someone who has heard about YNAB and decided it's not for them. Your very dismissive response suggests the latter. That's fine. The reality for many people who have actually used it is that it's life-changing.

I used to use YNAB and thought it was great. But DH and I only use one current account, have a tight budget, and am happy to spend 20 mins each month on payday moving money to the right pot. I use the round up function too on monzo, and my spreadsheet includes pensions, mortgage and savings as I liked ynab's net worth feature, so I can still monitor this. I also update my spreadsheet each morning (takes 5 mins as all bills go out same day) so that shows available funds. This works for me and I'm £80 quid a year up but appreciate other people would prefer to pay - it doesn't really matter.

I have used YNAB previously and now use my own excel budgeting sheets. YNAB was ok but nothing ground breaking and there is no way I could justify £80, it doesn't suddenly make you have more money or make you financially savvy. It's great if it works for you but £80 is too much to spend on something that I can do myself.

What works for me is being aware of where my money goes and where it needs to go on a daily, weekly, monthly and annual basis. I use a zero budget method and always pay myself first.

Ynab revolutionised our finances and the £7 a month is absolutely worth it.

Everyone here who uses it would have a discount code to offer newbies which gives you and whoever's code you use an extra free month.

But, a cheaper option if you're prepared to put in the legwork is to watch their YouTube videos and adopt the Ynab principles with Excel or similar. That's very doable if you only have one or two bank accounts.

The key things for me are:

Give every penny of income a job when the money comes in.

Budget, don't just track spending.

Work out your true essential expenses and cut from the non-essentials to afford the essentials.

If you can't afford the essentials, something has to change and sadly that's the reality for so many people these days.

Cash stuffing/ envelopes helped me a number of years ago when in debt, to develop discipline. There’s something about spending physical cash that for me is psychologically more impactful. It really got me prioritising and being more realistic, until I could trust myself to budget online instead and went back to card payments. Honestly changed my whole attitude.