Help me create a budget please

[OztoLdn]

Help me create a budget please.
Family of 4 with two primary aged kids (state school)

1. Rent 3 bedroom 2 bathrooms house with small garden or courtyard in London zone 3 (West, or South West)
2. council rates
3. electricity and gas
4. water bill
5. internet
6. groceries
7. phone provider for 2 phones
8. 3 days of afternoon school club for two kids
9. 2 days a week commute from zone 3 for 2 adults
10. swimming lessons for 2 kids once a week
11. gym membership no classes just gym access for 1 adult don’t need anything fancy

I’m excluding for now family outings, eating out, car payments, petrol, holidays, money for clothes/shoes/ beauty.

What else do I need to add/consider?
work will provide private health cover for all.

Thank you!

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I am struggling with our astronomical bills. I have twin boys who are 8. We both work full time. I WFH, OH does not. I work in the private sector. We live in a 3-bed bungalow with a large garden. My wage is around 3k pcm; OH is £2k pcm. Can anyone suggest anywhere I could save/or earn more money? Here are my monthlies:

Mortgage £1897 (went up by £600 this year)
Council Tax £225
Gas £107 DD (for hot water mainly)
Electricity £160 (we have an EV and A2A heat pumps)
Life insurance £139
Broadband £26
EV car hire purchase £209
Loan £406 (to pay off home essential renovations)
Credit cards £500 (as above)
TV £15
Netflix £11
Taekwondo for kids and OH £80 (they go 2x per week for this)
After school care £180
Pet stuff (food, insurance, pet care) £80
Guitar lessons for one DS £80
Swimming lessons £170 every 10 weeks
iPhone £16
Apple One £24
Joint savings £50 each
Fuel and ad-hoc groceries £200
Meal kit (occasional) £40

We split bills 60/40. The rest is used for kids clothes, birthday gifts, food shopping, and one family holiday a year if we're lucky.
I know the holiday and kids stuff and meal kit would be an easy chop but we want some quality of life and development of a worldview for the kids, which for US is achieved through seeing other cultures, tasting different foods and having artistic outlets and interests. I acknowledge that the kids have privileges other don't, and I'm making no judgement about other children who don't do the things we prioritise.
We're at the point where we are thinking of downsizing to reduce the mortgage/CT/heating bills. But the thought of moving just puts a pit in my stomach (the cost, hassle, moving schools etc). Just feel so stuck.

How much do you owe on the credit card? Assuming it’s not on a 0% deal then I would pay that off as a priority.
apple One or Netflix not both.
gas seems high just for hot water - check other suppliers
you could cook some simple recipes with your children without the meal kit eg Chinese, Indian, stir fry etc.

Private health cover doesn’t usually include prescription costs so if you take any regular medication that will be £9.90 per item per month (or a one off payment of £114.50). Likewise dental insurance is usually capped - so your dentist may recommend that you see the hygienist every 4 months but the policy will only pay for one visit per year.

Have you thought about school holidays and childcare when they are off and you need to work. Primary aged children get 12 weeks holiday per year

@AHouseInTheForest are you on an electricity tariff with a cheaper overnight rate/EV tariff? If so, are you able to shift any of your other electricity usage to that period (dishwasher/washing machine on a timer, etc)? (Some EV tariffs are only cheap rate for car charging though.)
I appreciate it might be harder to run the machines overnight in a bungalow though due to the being on the same floor.

@NotWhoIThought Yes we have a 9p overnight tarriff (for any electric) so time the EV, DW, WM when we are able to. The laundry room is way on the other side of the house so we don’t hear it thankfully. The dryer is more difficult because we have to currently put the vent out of the window so don’t feel comfortable having it one while we’re asleep. It’s good to have the cheap rate but doesn’t help with things like the electric heat pump as 12:30-3:30am is not when you’d want heat on generally. To answer PP question about the gas bill seeming high. We have only just got the heat pumps so I expect the usage of the LPG will start to come down over the year and the dd will be adjusted as we go into credit.

Mortgage £1897 (went up by £600 this year)
Council Tax £225 if this is over 10 months, which is the default - then use the £450 from February & March to pay a chunk off the council tax bill and reduce the monthly amount to £180
Gas £107 DD (for hot water mainly) give monthly readings from your gas meter to get exact cost. I pay approximately £10 a month gas for hot water in the summer
Electricity £160 (we have an EV and A2A heat pumps)
Life insurance £139 why is this so expensive? I’d hunt for cheaper policy under £50 a month and ditch this
Broadband £26
EV car hire purchase £209
Loan £406 (to pay off home essential renovations) how long is the loan git left?
Credit cards £500 (as above) is it on zero interest, what measures are you using to overpay and get rid of the debt?
TV £15 ditch bbc live and send to licensing a withdraw of access letter to prevent them harassing you.
Netflix £11
Taekwondo for kids and OH £80 (they go 2x per week for this)
After school care £180
Pet stuff (food, insurance, pet care) £80
Guitar lessons for one DS £80
Swimming lessons £170 every 10 weeks can they swim? If so look for a local swimming club, much cheaper and keeps them swimming
iPhone £16
Apple One £24
Joint savings £50 each
Fuel and ad-hoc groceries £200 this seems incredibly low on grocery shopping?
Meal kit (occasional) £40

£4565 total outgoings not including savings

there is no water bill here, household insurance or building insurance

you may want to holiday but your income and outgoings don’t allow for much money to pay for it you have £435 left each month, I’d suggest camping in France as an option

@AHouseInTheForest probably not a suggestion for now, but maybe in the future you could look into storage batteries (eg givenergy or Tesla powerwall etc) that you can fill up overnight at the cheap rate and then use that cheaper electric to run heat pumps during the day.

Are you in a fixed rate deal for your mortgage? If so, how long do you have left? Can you extend the mortgage term to reduce the payments?

Hi @MikeRafone Thank you for your suggestions. I will do that for the Council Tax assuming it is 10 months.👍🏽 the gas is LPG so there is telemetry that tells the company directly what I use. As I say I expect this to come to come down over the year now we have the A2A heating.
The life insurance is what the mortgage broker recommended but I will shop around if this seems high (our mortgage is £288k over 18 yrs if that helps).
The loan has 5 years left. All CC debt is on a 0% I’m working another job to bring this down
Not sure what you mean by swimming club, are they taught actual swim skills there? They can kind of swim but I’d like them to get through the next stage before stopping formal lessons.

So the groceries is ad-hoc as mentioned ie if one of us is picking something up we need on the way home type thing (usually from Aldi/Lidl). I also do one or two big online shops that are delivered and this is usually £100 at least each time. Sorry should have added that.
I’m in Scotland so water is added to the council tax bill. All insurance I always pay annual so didn’t include as a monthly regular expense. Though all policies have massively shot up too. We have two cars.

@NotWhoIThought That is a great suggestion about a battery. I will look into that. Wish we
could have panels but they are just too expensive.
we kept the mortgage term low as we don’t just want to keep going to the start of a 25 year term every time we re-mortgage. We’re on a 2 year fixed rate ending March 2026.

Do a compare the market for a life insurance to cover the rest of your outstanding mortgage

look at paying extra on the credit card to bring that down

swimming clubs in my area have lessons attached on Saturdays, then they feed into the club, but it’s usually a lot cheaper - check out your pool noticed board or ask around

Quick update for anyone interested - turns out my mortgage broker sold us a really expensive policy for life insurance (and received a handsome fee I might add). Naive of us not to shop around at the time. Anyway did a compare and got a similar policy for £30! Cancelled the other one and got a snippy email from broker saying if you don’t reinstate it my company will have to pay a £1000 clawback. The cheek!

I looked into batteries but it’s still quite expensive and like panels only really worth it if we know we’ll be staying here for another 10years at least. And at this point we’re thinking not. The mental load of a house that needs work and lots of maintenance is just too much. So we’re planning to sell so we can keep the things we want and pay off debt.
Thanks so much again for the advice it really is worth asking around about these things especially these days with the crippling cost of living.

If you're in London and kids are primary age, school lunches are free for the whole of primary school.

All the extras I account for:
-Birthdays, Christmas and Mother’s Day etc

• family days out
• kids activities
• clothes
• car insurance, mot and tax
• Replacement tyre fund
• adult socialising
• home - this is all sorts of things like grass seed, new hoover, batteries, new duvet
• Top up shops
• home insurance
• work expenses - parking mainly but also for a coffee or small lunch sometimes