How do people budget?

[TDSR26]

I’ll admit myself and my other half are both not great with money and have plunged into so much debt we’re drowning!
He’s currently working two jobs pretty much 7 days a week, I’m a TA so my earnings aren’t great but I do everything at home and I need to be there for the kids.
We try and budget each month but our money just seems to disappear and we’re often just cutting it fine by the end of the month or spent slightly over what we’ve earned.
We have three kids so everything is so expensive as a family of 5, they all do quite a few clubs outside of school so that does take up a chunk but they enjoy them and it’s good for socialising (some school friendships haven’t always been great). There always seems to be something they need / outgrown / for school, it just seems never ending!
I sell and buy so much on Vinted and I can’t even start on the food shop as that’s just ridiculous these days!
Neither of us socialise much with friends or go out together as we simply cannot afford too.
We hardly ever go out as a family to eat unless it’s an occasion i.e birthdays etc.
Day’s out are saved for school holidays, we haven’t been on holiday in two years and that was paid for by the in-laws as a gift.
We moved house four years ago and it’s so outdated and we’ve not had any spare money to do anything, not even the kids rooms!
It just feels like an endless cycle of just trying to get by and we’ve got to the point we’re both so miserable and stressed out!
How do people do it?! Any advice welcome 🤗

Yes we have all our spending for the last year on spreadsheets, we do it every month.
the other payments were done before the loan, oven just broke before Xmas, mattress was so old and struggling with bad backs.
we sorted the loan at the start of the year.

How on top of the small spends are you? Or your husband?

It sounds like you have decent control on some areas but it's really easy to buy a sandwich for lunch here and there. Or with three kids to buy three drinks out because they are thirsty and a tenner is gone.

Is second a PP on the MSE budget recommended. It is the annual spends people forget like MOT, birthday presents etc but these need to be accounted for monthly.

Go through everything with a fine tooth comb and if you can't make the figures balance even cutting back the the bone then you need Step Change and a DMP.

You have to give every penny a job and stick to it. Here’s our budget…I work off our base pay, any extra overtime paid is kept for extra personal money.

Me 3100 (base)
DP 4100 (base)
CB 280
Total 7480

Housing
Mortgage: 1900.
Insurances(life, house): 150
Property tax: 50
Total Housing: 2100
Utilities
Electricity 150
Waste collection: 25
Broadband & TV: 70
Mobile phones x3: 60
Total Utilities: 305
Food & Groceries
Groceries & household food: 500
Dining out / takeaways: 200
Total Food: 700
Transportation
Fuel: €150
Car insurance & tax: 150
Maintenance & NCT: 100
Public transport / Parking: 20
Total Transport: 420
Education & Kids
School books, uniforms, fees: 50
Activities, sports, clubs: 55
Pocket money/treats: 60
Total Kids & Education: 165
Entertainment & Lifestyle
Family outings, hobbies, gifts: 250
Subscriptions: 20
Miscellaneous expenses (haircuts etc): 60
Personal spends:250x 2 = 500
Total Entertainment: 830
Savings & Miscellaneous
Emergency fund / Savings: 2,000
Holidays (monthly allocation): 500
Clothing: 200
Miscellaneous buffer: 300
Total Savings & Misc.: 3,000
TOTAL MONTHLY SPENDING: 7,480

Wraparound care is so expensive if a daily thing, and these are the kids interests. Myself and my partner always go without so we can try and give the kids as much as we can.
it’s not been a one off big thing, it’s been a built up over the years and now become too much.
its the bills going up, its food going up, like I said we hardly socialise. We feel like we have no enjoyment in life at the minute yet debt just keeps building - although we keep trying!

This is your problem. You're tracking what you have done. That doesn't help. You need to plan what you will do, and then replan every time something comes up that you didn't expect.

So, you plan to spend £300 on groceries. But then you get a letter about a school trip that's £25. That has to come from somewhere. Does it come from groceries (jacket potato with beans instead of beef casserole, etc.) or does it come from your social budget (skip that coffee and cake with Sarah next week)? Or do you reduce your debt payment this month?

I'd recommend YNAB - they have a 34 day free trial. I've been using it for years. You can really break down your spending, you can input spending at the shop on your mobile phone, so you always know the state of your budget, and you know how much it's available for spending, not just what's in your bank account.

With YNAB, I could have £1000 in the bank account, but if there is a bill that goes out for £850 tomorrow, I only really have £150, and that's what YNAB shows you.

I fully understand it’s seen as a luxury to have 3 kids but to be completely transparent - contraception sometimes fails and this is us a family of 5.
And it’s not like we’ve just had 3 kids, they are now 8,10 and 13 so when they were all born things were very different and as we all know kids become expensive as they get older.
thanks for your honest and helpful post.

It doesn’t matter if it’s for interests though, if you’re adding to your debt then you can’t afford it. You and your DH might feel like you’re doing without so the kids can have their clubs but you aren’t really.

You need to be incredibly clear about your spending.
You need to work out what exactly all your bills have been over the last 3 months, total up every penny you’ve spent in supermarkets - including every small amount when you’ve nipped for one or two things.
Itemise every other thing you’ve spent money on, £100 here on a term of classes, an item you bought etc
You beed to know where your money is going, what is your essential spending is and what can be cut. You cannot decide whether X amount on kids activities is reasonable until you’ve done that, you can’t work out what a realistic grocery budget is unless you know the full picture.

You cannot just continue as things are while getting further and further into debt.

If you don’t currently have a strict spending limit on things like groceries, activities, family spending then the fact is you aren’t trying that hard.

Cut down on clubs. No reason why you can’t take a ball to the park, you have three kids so they can play together or invite mates. Go on bike rides, cheap/free bikes usually available on facebook if this is an issue.
Talk to the kids in an age appropriate way and explain why you have to cut down on certain things so you don’t get constantly whined at. it would be a useful lesson to help them not to get in debt themselves one day too.
When I was young, I knew that I couldn’t go on some of the school trips or have the expensive hobbies, new bikes, new clothes, holidays etc. that my classmates had because my parents didn’t have the money. We made the most of camping trips and toys and books from charity shops, it’s not always fun but you can do it.

To be honest I hate being a TA and purely stick it out for convenience, kids are hard work these days and fed up with the abuse. There is no way I could become a teacher but thank you for trying to find a solution.
I am currently on the job hunt and just trying to find the right thing that works or will actually accept me for an interview!
yes football kits are all bought cheap online - DH Gate is what we use. Great sight.
yes party will be minimum with a few friends and nothing extravagant, it’s just more gifts. He’s happy with clothes and things he needs. He’s so grateful for anything he gets.
thank you

I second using YNAB, it changes your mindset from checking what you’ve spent your money on, to what you’re going to spend your money on. It means that at the start of the month you know exactly where your money will go, and where you have wiggle room.

It also sets you up to put money aside for annual costs, be that the car insurance, Christmas or birthdays. Yes you can set up spreadsheets that do the same but if you’re new to zero based budgeting it gives you a clear format to follow. It means you don’t see £500 in your account and thinks it’s there to be spent, because you know what that money is allocated for.

I use it to keep me on track, I can see where my money is needed and what I can save, and what I’m saving for because you allocate all your money to a project/cost as it arrives in your account.

I also like Dave Ramseys Baby Steps, it’s a bit Americanised so some of the language doesn’t land well but the principles are good.

Thank you, I’m more of a small spender as I’m the one with the kids a lot. They do get the odd treat here and there through out the week but not excessively.
any days out, park trips I always take food and snacks.
i think I’m doing all the right things but clearly going wrong somewhere.
if I could just wave a magic wand and make the debt disappear I know we’d be ok and could actually enjoy life again rather than struggle.
thanks

I promise I mean this nicely, but all of the above is just words…what you need is an actual written down, penny by penny budget…only then will you see where you’re going wrong.

How do you track everything currently?

Thank you, good to see someone else’s budget plan.

Move to a cheaper area?

Please don’t feel you need to justify having your children. It’s no one’s business how or why you have made the choices you have and three children isn’t a big family. In any event you can’t put them back where they came from so there’s no point in people giving you a hard time.

It’s hard financially for lots of people just now - salaries aren’t keeping up with costs and work isn’t easy to come by.

Thanks some useful tips, making me see how we’re spending / budgeting in a different light.
maybe we’re not trying as hard as we think and we clearly need to make a lot of changes.

On spreadsheets but sound alike we’re doing it the wrong way with some of the advice on here. I think we’re looking at what we’ve spend rather than what we have to spend for the month ahead.
helpful info on here that has made me see things differently.

Although food items are constantly rising are you buying wisely. I remember years ago someone complaining at a checkout about their food bill but their trolley was full of ready made apple pies, cakes etc. I used to go shopping with cash only in my pocket and mentally add up as shopped( days before phones with calculators or smart shop) it certainly helped me budget. There are lots of articles on how to feed a family cheaply, it might help in terms of lowering your food bill. Look at Good food website.

Same!

I try to do treats as free things, so in the summer try to choose interesting walks that involve a paddle and a picnic, or a walk with hot chocolate thermos. The free swimming sessions at local leisure centre. Trying different playgrounds in locality. Going fossil hunting (a few places near us). Walks through woods and playing with sticks! An afternoon baking. Treasure hunts. A chippy tea in the park. A bike ride. A board game night. We do the Lego club in the library. We also pick up books in the library.

We do go camping as a family.

I just keep telling myself it's not forever and will get easier.

We haven't spent anything on the house for years.

None of our friends seem to have same financial worries though. I don't know why us and not them!

Hi OP, I also have 3 kids and whilst DH and I do both have 'career' jobs and earn a decent amount, we are also struggling and have a lot of debt. We were doing ok but then the mortgage doubled, the utilities and food rocketed, wages stagnated etc etc.
I track every penny and try my best but I can't make the figures magically improve, and I want to give my children the best I can so they all go to clubs, we have 2 (camping) holidays a year and I don't scrimp on birthdays and Christmas. I use flex/klarna etc to help.
My take on it all is that I need the debt now and I can pay it all back eventually. You're a long time dead and I have good life insurance if I die before it's all paid.
I do however have everything on interest free, and I'm always shuffling money around to keep it that way.
Basically be kind to yourself, it's hard, we're all trying our best but geopolitical stuff is outside of our control and then we get punished for other people's decisions. I've stopped losing sleep over it and just try and concentrate on my family and having a nice life.

Agree with @TDSR26. In my view, financial circumstances change but family is forever.

I also would recommend setting up a buffer fund. It's really tempting to over pay debt when you have spare funds, but then something else in life goes wrong and bam, you're in more debt. I'd consistently chip away at debt, and put a fixed small amount aside as an emergency fund if you can. And define what you count as an emergency with your spouse.

I did a challenge in Jan to list one thing on vinted a week and made £80. Got rid of a load of old books and clothes I was going to donate.

Well done OP! This was a mistake we used to make. By knowing what needs to be paid ahead of time rather than when it's gone - you change your outlook. You become in control of your money rather than your money controlling you. You can then work with what's left.
This has been a useful thread for me too - seeing how others manage their money - has given me some other ideas as well.

I don’t mean to be harsh in a nasty way, sometimes it does just need cold reality shown to you though.

We had 2 different times we needed to live on an incredibly lean budget, and it worked for us.

Once you have had a really serious look at where your money goes then you can set goals and budgets. It’s all very well saying I feel like our groceries are economical, I feel like we don’t spend much money on ourselves etc
Once you have seen where it all goes you need to set quite a strict amount for the various categories
X per week for groceries
X per week for family entertainment (including kids activities in this)
x per week for whatever.

To me this isn’t just a budget issue, it’s you and your DH totally reframing your mindset regarding spending. Because you have slipped into debt several times you need to learn accountability, if you spend more than the budget on groceries it needs to come from another category and vice versa. You buy a little item or do something with the kids that pushes you over budget, then it’s pasta and veg sauce for 3 days in a row or whatever. You can’t just accept over spending and getting into debt.

The good news is once you get out of the cycle you will pay off the debt and have a much better financial mindset after.

I would join the Money Saving Expert Debt Free Wannabe boards. You'll get good advice there.

You may need help to manage the debt. Or if you decide to manage it yourself, great advice on how to do so.

Are you paying interest on the debt currently? If so do you know about things like the snowball method?

Is anything due to come to an end that might give you more flexibility?

How important is your credit rating? Does your husband work in finance for example where it can have an impact? Do you already have a mortgage? If so when is it up for renewal.

It's good you are recognising that it's a problem and there will be options in terms of how best to tackle it.

Have you cut as much spending as possible? Even small things help. You can cut all TV subscriptions ( apart from licence assuming you watch any scheduled TV), there are plenty of programmes on iPlayer, ch4 etc. so no need for netflix, prime, sky etc.

My phone contract just finished and I've kept my phone and gone on to SIM only, £1.48 for 3 months then 4.90 a month. I daresay I'll buy a new phone at some point but not till I need one.

I've just had 2 £20 gift cards so £40 off my supermarket shop by buying my house and car insurance through confused.com. You get a £20 gift card for each car or home policy.

Make sure you sign up to supermarket loyalty schemes for points.

Changing your current account can give hundreds of pounds in cash, MSE has the best switches, sign up for his weekly email for all types of ideas to cut spending. My son and DIL did a lot of current account switching last year after buying a new house, between them they got a thousand pounds for simply switching a few times.