Monthly budget - suggestions and budget tool tips welcome

[Pigtailsandall]

I know there's been a few budget threads and people have offered some good advice. I try to budget but I am generally terrible because I always forget something off the list 😅From February, my hours at work will be reduced so we are looking at a slightly lower household income for the forseeable future. We have made good headway with our mortgage, and have some savings, but I really want to see where we can shave off a bit. I'd like to prioritise paying more off the mortgage before our fix ends, and paying for travel, little trips and experiences. We are a family of 3 plus a cat, and live in London.

I've tried to think of everything, and where the cost is annual, I have broken it down to an approximate monthly cost for clarity. However, lots of these things get paid off in one go, making a monthly budget a bit harder. Any tips how to manage annual charges within a monthly budget would be appreciated.

DH and I have similar salaries, and we have 2 joint accounts - one for fixed expenses and one for fluctuating ones.

Fixed items:
Mortgage - 910
building insurance - 18
Water - 48
internet - 35
council tax - 124
electricity and gas - 210 (this is at its highest and will go down in summer months)
2 mobiles at £8 each - 16
Total: £1861
We both pay £1000 towards this account, which builds an excess monthly; we use this if we need to replace anything in the house (like in 2023 we had to buy a washing machine, this year we're looking at replacing the carpet on the stairs)

Fluctuating costs:
Food (Weekly online shops, about £500 a month, plus £25ish a week for top-up items. DH and I work mainly from home so this includes most meals, including adult lunches during the week) - £600
One cheap family dinner out a month - £60
DC costs:
Weekend hobby - 35
Wraparound care 1 day a week - 50
2 after school clubs - 80
shoes and clothes - 30
Cat costs:
Food subscription - 18
medications - 30
pet insurance - 20
treats and toys - 10
Travel:
tube and bus - 120
Randoms
magazines, journals and newspaper subs - 35
Netflix - 5
Spotify - 5
NHS prescriptions - 4
Dental checkups for 2 adults - 9
Dental hygienists for 2 adults twice a year - 26
Total: 1135

Savings:
Joint savings in easy access- 300
individual long-term savings - 2x300 so 600 in stocks and shares
Total: £900

Hobbies (paid individually)
DH gym - 40
Pilates for me - 68
Osteopath - 50
Total: £158

this all totals up to £4193 but I'm sure I'm forgetting something. We also do spend on ad hoc hobbies and experiences, like taking DC for various kids' activities, visiting coffee shops and going to gigs/theatre/pubs. However, these fluctuate a lot and we can cut back easily - it's also the first thing we cut, of course. I'd like to be able to increase our savings to allow for us to visit my family (who are overseas) and to do a lumpsum payment towards our mortgage before our low fix ends. Our excess income last year went towards flights to see family but it'll be much tighter this year with 30% of my salary missing.

Birthdays, holidays, Christmas? Where do these costs come from? What about clothes, haircuts, toiletries, for you and your husband?

Do you not have contents insurance? Or travel insurance?

£10 a month for cat toys and treats sounds loads! We have three and don’t spend that much!

Are your magazines covered under Amazon Prime? It might be a cheaper way of doing it.

Are you saving via a cash ISA? They have high rates at the moment, no penalties for withdrawing and you can save tax free up to £20k.

Any excess in your joint account is better kept in the cash ISA to maximise your savings, then transfer as required.

Use a credit card with points/vouchers/etc., what ever benefit suits you best. Buy absolutely everything on it, keep your wages in a high interest account and then use it to pay your card bill off in full every month. That way you get the interest and the points.

If you can fly BA to see your parents get an Amex BA card. If you make sure you buy everything you can on it, you’ll probably meet the target to get the 241 companion voucher (so buy one get one free on the flight), plus all the avios points you will accrue, you could get very cheap flights to see your parents.

@Alabas some very good points, thanks! I'm definitely going to look at a high-yield credit card with benefits particularly for flights.

The £300 we are currently putting away for travel/holiday costs goes to a First Direct regular saver which has a really good interest rate. It matures in October every year and we use the interest to buy DCs Christmas presents. We spend very little at Christmas because we don't buy presents for adults and we always go to our parents for Christmas (and they never accept a penny). We buy a few small things for each other but that comes from our own small discretionary pot. We each have about £100 a month for clothes and activities. I have a huge backstock of skincare stuff and really don't need clothes.

I cut DCs hair myself, and my hair is cut by my SIL once a year! We both have long hair so it works. DH pays from his from his discretionary pot

We do have a content insurance but it's paid for by my PILs! They got the first year as a housewarming gift and have paid it ever since in lieu of a Christmas present 😂 they are infinitely practical people.

DH did remind me that we pay £35 for the milk man which I forgot. But I think I also need to budget for birthday presents for DC friends! We go to about 2-3 parties a month and that gets pricey even if you do £5-7 presents, so I'll add £15 to that. I use my annual cashback bonus from my credit card to buy DHs birthday present as get it convenintly just before his birthday.

I'm also selling a lot of old stuff on Vinted and make about £20-40 a month, and that goes towards little treats for DC and the occasional toy/book.

Our travel insurance has run out but we'll renew it before the next trip so that will need budgeting from May oneards

I highly recommend YNAB, it’s designed to help with all those known unknowns - car repairs, Christmas etc - that always happen but we don’t think of as well as fluctuating costs. It’s well worth the £13 ish a month. Watch a few YouTube videos to learn the method. I’ve been using it about 3.5 years and couldn’t live without it now. You know where everything’s going and what’s set for what.

I use the free budget tool on Money Helper.

My budgeting is vrap at the moment, but when it's not, I use the savings to pay for insurances in one go not monthly as works out cheaper.

I also save for school uniforms/trips etc as these increase when the kids get older.

And budget an amount per month for days out, takeaways etc

The money helper budget tool has all the little things on there

Thanks so much, will definitely check both of these apps out!

Car
Life insurance
Christmas
Kids uniforms
Additional school costs (school trips, bags, water bottle)
School lunches
Garden maintenance
Window cleaner

We don't have a car as we have no need for one

School lunches are free, and I clean my own windows.

Uniform goes under the general clothing cost as our school is very relaxed about it and jumpers etc just need to be a specific color so it's cheap. School trips are not yet an issue in Year 1 but yes, in the future we might need to do that.

Our garden is maintained by me! I find it therapeutic and I'm pretty crafty. Our garden is absolutely tiny though.

Oh and we are looking at life insurances. At the moment we don't have one, but we both have a very good death in service - policy through work while employed.

Re annual costs/monthly budget: I save a specific amount of each thing into a savings account monthly, then when it is due pay it from savings.

So for instance if insurance costs circa £200 a year then I would pay £18 into savings every month. I keep track of this on a spreadsheet but you can also get bank accounts that allow you to have separate 'pots' of money. I do this for everything from car expenses, various insurances, professional fees to saving for Christmas, birthdays and school holidays.

The fixed items you have quoted don't come to £1861?

I find this tool easy to use: www.toolsonfire.com/en/BudgetTracker

I second what @DuluxPaint said about a bills account which smooths out the bumps in the monthly budget. So work out all bills as an annual amount divide by 12 and save that to your bills account each month. Then pay yourself back from that account when the bills come in. I actually divide the amount into 10 so I don’t have to pay to the bills account in expensive months (August and December). Good for you OP; I love budgeting!

Mortgage protection
critical illness cover/income protection cover