New to Budgeting- where to start? Help!

[speakout]

Like everyone the cost of living keeps rising.
OH and I both work, and in the past we have spent without much thought and still able to save a bit at the end of the month.
The past few months we have spent more than we earn, having to dip into savings- lucky to have that buffer but not sustainable.

Neither OH or I are massive big spenders thakfully, so I never thought we had a need to have a spending budget.
Our monthly bank statement in a few hundred transactions each month, and a simple look through shows me a lot of stuff we could cut out or cut down, switch elsewhere.

I'd like to look at all areas of spending, I think we could save quite a bit on food, OH in particular will always pick up "Extra Special" food items rather than standard or budget.
It just seems so daunting- can anyone suggest a website or online tools which will allow me to pick apart our spending, show where our money is going, with a view to cutting our costs and setting realistic budgets.

Financial stuff is very triggering for me, but OH can use spreadsheets etc.

Thanks.

Several people swear by YNAB. I used it when I was in university but I'm not sure what the price is now.

Be warned budgetting isn't really going to work if you do it by halves. You've got to both commit to it!

https://www.moneyhelper.org.uk/en/everyday-money/budgeting/use-our-budget-planner.html

Free budget tool, and you can print it out/save it/add it to your home screen.

You need to work out your spending, including the yearly/one off/big costs. This includes holidays, Christmas, car repair etc.

Have an account where the money for bills is kept, and account where you save monthly for the big costs, and an account for day to day spending.

To get the info you need, get 3 month bank statements for each of you. Go through the statements and work out where the money is going.

The budget Planner has all of the categories on there and room for other expenses yoj may pay towards.

You will likely find that there's stuff you're paying and have forgotten about, so can save that way.

I don't use the 3 accounts method. As if I see the account for big expenses mounting up I want to spend it.

I have savings accounts for everything. Examples are holiday/kids clothes/kids uniforms/ emergency vets fees/car maintenance and insurance.

I try to save for the house/car insurance monthly. So that when it's due for renewal I can pay in one go, and not have to pay more for monthly installments.

I have a spreadsheet in excel on my laptop. Lists and totals almost incomes, then I list all expenditure Food, Gas, Electric, Cash etc

Once a week I go through my online account and update the spreadsheet and balance it with the bank account to the penny.

I project my monthly budget for the whole year ahead, so I take into account one off expenses as well.

Extremely useful to see where it is going, what savings can be made and I can be confident about our finances.

[[https://www.ynab.com/pricing/#signup is excellent. It is $99 per year, but you'll save so much more than you spend. They give a 34 day free trial so you can get to grips with it. Now is an ideal time to sign up, because you have a few days to learn the method and get your categories sorted before the beginning of the month comes around.

Oh is in charge of this overhall, I have too much on my plate right now to do it myself.
The savings to top up our current account are in my name only, so if he chooses not to engage in a money saving project then he is in overdraft- so he has a motivation to work this out.

I used YNAB for about 10 years (on and off for part of that) and found it life changing.

Now we are lucky to earn more and have a decent surplus, I’m trialling going it alone without paying for YNAB. Because I’ve got good financial habits totally ingrained now it’s going OK though I’d still recommend YNAB to budgeting beginners.

What we do is when we get paid, we each keep a set amount (currently 20% of our salary which I know is generous, it’s been much less in the past) in our personal accounts for our own spends - clothes, phone bills, gym memberships, alcohol, hobbies, seeing friends, gifts that fall outwith our joint budget - whatever we want to spend our own money on.

The remaining 80% goes into our joint account which is with Monzo and has various pots attached.

We put a decent sum into our emergency fund each month as are currently building this up to a 3-6 month fund.

After that I move money into the following pots:

Bills (includes extra for annual bills which I leave to build up til needed)

Holiday

Gifts & celebrations

Home & garden

We also have a Kids pot, the child benefit and sometimes money from relatives goes in here and we use it for kids’ clothes, activities, outings, pocket money etc

The amount that’s left in the main pot is then for everyday spending - petrol, parking, groceries, misc household expenses, charity donations, little bits and bobs from charity shops or ice creams at the beach etc.

I have been budgeting on paper since Jan 2020 after 3months tracking spending late 2019.

How I do it cheap large notebook and pen.

Income and dates paid at top
Fixed and debts to the right hand side
Variable and savings to the left.

Go through fixed bills line by line.
We shop around insurance
Threatened to leave AA
Trimmed back sky package
Tried to reduce energy usage and negotiate dd with octopus.
Reviewed any subscription.

Variables Tried to buy where possible 2nd hand clothes/ furniture/ books.
Stopped school meals taking packed lunches.
Packing snacks when out.

Food is massive area I worked hard on.
Meal plans and shopping lists
Cardiff mum and taming twins has some excellent aldi Meal plans on Instagram.
Reductions and freezing
Batch cooking and freezing
Growing own veg in pots.
Shopping a few different supermarkets each month.
Food budget ideally £150 per week or less.

Wilkos cheap cleaning/ gardening / makeup / bathroom items and pets.
Like wilkos makeup

Home bargains & b&m some cheap foods and cleaning /garden and pet

Lidls / aldis perfume/ skincare and some bathroom items..

Finding big 4 cheaper on some everyday items so soft drinks/ cereal/ biscuits/ tinned / pasta all brought in bulk as food prices keep going up.

Once every 2 to 3 months farmfoods or Iceland frozen shop we have 4 freezers.
On the whole meat is cheaper in aldi / lilds but not as cheap as used to be.
Buy hardly any branded

We trying to become debt free
Moved 1 card to 0% and nearly paid off credit card 1.
Build up 1k emergency fund savings

Trying limit takeaways eating out once a month each unless special occasion.
Only get coffee and meal deal on pay day as treat.

Buy 2nd hand on clothes, books/ furniture via charity shops, jumble, car boots and market place.
Try and shop the sale especially seasonal items so xmas and Easter sale items.

I keep spending diary like a manual spread sheet with few categories
Which card/ account
Date
Item category type
Which shop/ place.

I then use highlighters to make each category different colour so orange is food abd I add up how much end month spent each category

Grocery includes pet cleaning bathroom items .

Treats

Gifts birthday/ seasonal xmas/ Easter mothers/ fathers day

Health and beauty

Takeaway/ eating out

Garden /home

Clothes
School expenses

Check out the budget mom on you tube or insta or abundant budgets is uk based loads budget video you tube

Good luck really helped me and means we not only paying off debt but saving too.

Have an impulsive husband
He has a small credit card £350 limit we pay to zero each pay day for petrol/ fags.
Yesterday he went on a b&m rampage and spent 50 quid on gardening items on his day off that's his weakness.
Hes not to be trusted in home bargains either its his danger zone where be loses the plot.
I do take him on big montky food shop and lots random things end up in trolley hes very brand loyal and likes the finer things.

Having separate accounts works husband gets paid monthly so his current account is fixed bills only he has 2nd current account for variable plus small credit card.
He also pays dents and most bills go out start of month theres couple near the end I sometimes pay if skirt.
I get paid weekly plus child benefit 4 weeks so I fund the dog, kids stuff/ clothes/ food and savings as husband hopeles at savings .

Have a chat talk about financial goals do you have any big changes coming up.
Holiday or house costs like moving/ renovation as once you have a why or goal to work towards.

Our fixed mortgage ends Dec we worries so our goals are

Pay off credit cards and overdraft so more money spare pay extra mortgage.
Over pay Council tax we pay over 10months so pay double twice is 8months gives us some breathing space dec xmas and jan/ feb when pay is lower.

£1000 emergency savings
Savings pots for car, xmas/ school
Finish xmas shopping early this year.
Stockpile food summer/ autumn before energy bills go up and bad weather.
Ways trying get ahead of myself as work 4 days.
Do some small low cost things to house and garden.mostly cosmetic.

As you switch or ditch bills or reduce variable spending budget write down and add up amount saved its a real motivator.

This. Achieves the same as YNAB without having to pay for it, YNAB doesn't 'save' anyone money, it stops you spending on things you decide not to spend money on, which can be done for free.

You can have whatever pots/accounts that suit you and use standing orders to automate a lot of it.

Also excellent advice by @Echo40 and Moneysaving Expert has an online guide, including signposting to increasing income and getting the best price where possible (phones, broadband etc).

https://www.moneysavingexpert.com/family/money-help/