Overspending every month! Help me!

[friggssake]

We are spending between £100-£500 a month more than we earn...Below is what we have spent roughly this month. Please can you tell me where I am going wrong...? We bring in about £4300 monthly.

Item Cost
Housing 1337.00
Food 670.00
Family pocket money 310.00
Pensions 275.00
Council Tax 183.00
House Insurance 13.50
Gas & Electricity 67.00
Water 57.00
Cars maintenance, tax etc 115.00
Petrol 120.00
Mobile phone 55.00
Cleaning & window cleaning 115.00
Holidays / weekends away 250.00
Children's clubs, swimming etc.. 142.00
Childcare 120.00
Broadband & House Phone 90.00
Exercise classes / gym 90.00
BUPA 65.00
Haircuts 57.00
Adult pocket money 100.00
Christmas Fund 75.00
TV Licence 12.50
Life Assurance 41.50
Clothes (mostly kids) 30.00
Babysitting 30.00
Work lunches 25.00
Gifts 75.00
Car Parking 7.00
Contingency / unexpected extras 75.00
4602.50

snowy, as an experienced frugaleer, here's my penny's worth

if you buy cheap on stuff like that, you don't usually buy twice. But let's imagine you did. If you had to replace the £9 in a time outside of the warranty, what have you lost?

so far it's not happened to me with anything. Of course it depends on your circumstances, but I always try the cheaper version first and so far it's fine, even on appliances that are used very heavily indeed. I'm still using the microwave I had a student. (I'm 40)

I do think an awful lot gets spent on a misleading perception of quality, and also I think people often replace stuff for the sake of it.

before anyone complains, I'm not telling anyone what to do - do as you please with your money. I'm just explaining this because the OP asked for help and advice.

Housing 1337.00
Food 400.00
Pensions 275.00
Council Tax 183.00
House Insurance 13.50
Gas & Electricity 67.00
Water 57.00
Cars maintenance, tax 40.00
Petrol 120.00
Mobile phone 10.00
Childcare 120.00
Broadband & House Phone 45.00
Christmas Fund 40.00
TV Licence 12.50
Life Assurance 41.50
Car Parking 7.00

Ive re-jigged your £4602.50 outgoings to what people would normally spend! grin

£2800 roughly saved you £2000

Totally what needs doing pandpops. But I'd keep the gym as it is affordable. Save ¾ / pay off any cards you might have and spend the rest.
Any gift etc money is what you can afford at the time.
We save for holidays £750 & Christmas £100 and factor in fun money - for a night or meal out.

Window cleaning can go - do it once per year
Gifts 75 ? Very high
Christmas fund is high
Food is v high too but I don't know how many of you there are
I would seriously consider saving some money too - in case of a job loss or for your children's future. What about university or saving for a deposit for their rent? You have nought to fall back on!

good news on savings.

pensions; make the most of any company contributions and tax relief, because neither may last. They say you should be saving half your age as a percentage of your income. That's very difficult to achieve - if you earned enough to do that comfortably you'd probably hit the lifetime limit. But the amount being wasted on tat-exchange can be put to far better use. Declare a present cease-fire for adults and a strict limit for kids.

other thoughts; petrol. You may well have a long commute, but are you driving efficiently? No excess crap in the car, anticipation, etc etc etc. And the main thing is to use the car as little as possible.

work lunches; bugger that. If you are working, they pay. If it is a party, don't go.

pet food - plenty of cheaper options. It will eat it or starve, and I assure you it won't starve.

Here's what MSE says on pensions:

"Take the age you start your pension and halve it. Put this % of your pre-tax salary aside each year until you retire.

Make sure you include your employer's contribution in that percentage.

So someone starting aged 32 requires 16% of their salary for the rest of their working life. "

It also depends on what your employment benefits are. My employer will double my contributions up to 5%. I'd be mad not to put in 5% because that's free money, on top of tax relief.

But if you can't do that much immediately, better to do something rather than nothing. Compound interest means putting away a small amount regularly is worth more than a lump sum of the same amount later. If it's invested over a long period, regular contributions also mean you are buying when stocks are low, as well as benefiting when they grow.

Savings: I've heard people suggest you should have half of your annual salary available as savings in case you lose your job. I think that depends on your lifestyle and what you earn: 6 months in your current lifestyle could last a lot longer if you had to economise.

It also depends what your long-term goals are. If you want to buy a house, you could need more than that. If you want to start a business, it depends on what that is. You might want to save for kids going to uni, or help them buy a house.

But as with pensions: small amount regularly is a good start.

If you get a payrise, split the difference: half becomes new regular payment to savings, half to enjoy your new income. Or if you are happy with your lifestyle, save all the extra.

If you have any debts, pay those off before savings or pension.

Are you sure you only spend £25 a month on lunch at work? Plenty of people spend a lot more than that, or does it come out of the pocket money?

People have jumped on the pocket money spends but if that covers lunches, coffees, snacks, drinks out plus books, hobbies etc etc, it won't go that far and plenty probably spend more than that.

You don't seem to have pet insurance for the dog - what would you do it it needed an expensive operation?

But you do seem to have a good handle on annual expenses. Plenty of people don't and then moan about being skint due to 'unexpected' car repairs.

Any way you could save on water - are you in the south west? Could you go on a meter if you are currently paying according to the rateable value?

Most obvious scope for saving would be food, broadband/TV, Christmas and presents. Only buy presents for your DCs and perhaps a token for you and your partner - no need at all to buy for loads of other people. You could probably wipe out your overspend on these items alone.

I would keep the holiday if at all possible, and what you're saving is probably only going to pay for a medium level week abroad plus a weekend away or two so it's not like you're spending loads on holidays.

But the biggest waste of money you've mentioned is the ironing board - don't you know that no-one on here irons . I'm probably going to get rid of ours and for the one or two occasions a year that anything is ironed, I'll just do it on a towel on the kitchen island.

I love that the ironing board is getting so much attention !

lorelei9 thank you that's food for thought

work lunches; bugger that. If you are working, they pay. If it is a party, don't go.

OP has already said she works from home

Ah yes, I missed that they are both at home for lunch a lot. Still a lot on food though, even for a family of 5. Should easily be able to shave a couple of hundred a month off that without having to live on beans. Look more closely into what you are buying and what is wasted too.

OP, is your DH on the same page as you spending wise? As in have you included everything he spends and is he also amenable to cutting back?

Because if not, it can obviously lead to problems like someone on another thread the other day, who mentioned her DHs £600 a month Starbucks habit, which sounds pretty impossible unless he eats three meals a day there and/or is always buying coffees for his team or something.

I was joking about the ironing board snowy.

I know Barbara .

£600 on Starbucks !

We spend £700 a month on food (5 of us) DH and I both work at home and DC's eat a ton of food. I even do half of it in Aldi and cook everything from scratch but it still ends up being loads.

OK, on the food front, I also have a 'special' diet (dairy free). Admittedly there's only one of me, but my weekly food shop rarely goes over £20, I don't see why you can't do it in £100 for a family of 5.

-If you're also dairy free, Alpro is regularly discounted in Sainsburys. When it's down to £1 per carton I bulk buy the UHT ones and keep them in a cupboard, particularly the almond and coconut ones you can't taste the difference once it's chilled.

• Buy meat when it's on offer, most supermarkets will do 3 for 2 every few weeks. Split into portions in tupperwares/food bags and put in the freezer. I often eat vegan but meatless Monday seems to be quite 'in' at the moment, curry with chickpeas or tofu is significantly cheaper than with meat, so you only have to swap one meal a month to make a small saving. For spaghetti bolognese/chilli con carne, buy packs of sausages instead of mince and pull the meat out of the skins, much cheaper and looks more or less the same.

• invest in some tupperwares and prepare your own lunches if you're out and about. It's amazing how much I save doing this, sometimes I will take a packed lunch into Starbucks if I'm meeting up with friends there and just buy a coffee but eat my own sandwiches/salad. They don't care. And if you are going to somewhere like Starbucks regularly, get a loyalty card.

• look at the kind of fruit and veg you're buying. Often supermarkets will charge you a significant amount extra for pre prepared/fancy packaging. Don't do it.

More generally, a diary is definitely a good idea, I have a spreadsheet on which I record every penny that comes out of my account and what it goes on. I then colour code according to essentials (food, prescriptions, train fares etc), clothes, entertainment, socialising etc. Easy to look at it and immediately see where the money is going that way.

Why the expensive day trips? Go on walks together, bike rides, take up Geocaching, do crafts together at home. Book train tickets online in advance if you're going on a daytrip, often you can get major discounts.

How about running outside and investing in some home weights and a yoga mat instead of the gym? I would love to go to more yoga and dance classes than I do but I can't afford it at the moment, so I do a lot of home yoga practice and one class a week, few dance classes and go on runs in the local park, which is working for me.

My hair also grows insanely fast but I can only afford to have it cut twice a year so when it is cut I cut about 4 inches off and let it grow back out. Is that not an option? £57 a month on hair is

You don't need to put £250 a month away towards holidays. You really don't. Ditto £75 on gifts and £75 towards xmas.

I'd tackle the food bill first; we spend as a target £400 for the month (food/toiletries/cleaning) with a few top ups. This is going to be the easiest thing to cull (online shopping is your friend). The car/cars seem expensive; you need to keep an eye on that and make sure you are not paying over the odds. Next the home phone; we have a Virgin package (tv/broadband/phone) and it's £55-£60. You have to be disciplined and only use the phone after 7pm and at the weekend. We have a water meter; 3 loos, 2 showers and ours is £37 per month which is virtually the same as the standing charge without a meter (SE).

I also noticed that you appear to be underinsured; someone mentioned you didn't have pet insurance. It looks as though you haven't got contents insurance either - the figure you quoted for 'house' insurance seems like buildings cover only.

I think for the rest you either 'trim the fat', little by little or you slash and burn.

I also bought a Brabantia ironing board having bought one from ASDA for £5 and it collapsed and died on me.

re the sports clubs - local tennis club with floodlit courts and all that has family membership for £36 a month. Local running groups free or local athletics club which is massively active with huge club nights and lots of variety in what they do is £35 a year. For sure a gym is not always the expense it looks like, if you spend most of your leisure time there it works out OK, but if you're in debt on a take home income of £4300 it is time to rethink some assumptions...

by switching every 12-18 months you can have unlimited broadband and unlimited anytime landline calls for under £30 including line rental.

extra TV channels are an obvious luxury but again you can shop around for those.

OK, I have been trimming and slashing... things are coming together and the bills are coming down somewhat.

Yep, DH is on board totally. I've been talking about getting grown-up with the finances for so long that he has no more resistance! We are no longer in denial... barely anyway :)

The pension stuff ... needs a lot of work. I am NOT looking forward to life where we save 30% of our income! One step at a time though...

My ironing board is the most talked about ironing board on the planet. Fact.

Oh and is there a cheaper YNAB?! I can already tell I'm going to be hooked!

But its a very nice ironing board
Look at Google apps for money related there are loads.

Tbh I think it's more fun creating your own spreadsheet and fiddling with it. This can replace a lot of expensive nights out