This is my income / outgoings - can you tell me how you would work this?

[MrTumblesbitch]

I am crap with money, and I want to turn this around. If I tell you my info below, please would you tell me how much you would save? How much would you pay off your debt? Am I being unrealistic if I thought I could get a mortgage in the next 5 years? I have 10k gifted to me for a deposit from a relative, but I would still need an extra £5k minimum.

Any tips for how to actually become good at managing my money and sticking to a budget?

Thank you! Info below:

In:
2,300 income - this fluctuates as I am self employed, usually £2k though
400 - child benefit and maintenance

Out:
950 - rent and house bills
200 - I am tied in to a franchise for next 2.5 years
100 - debt payments (I owe aprox £6k)
100 - sky / mobile / internet etc (will get rid of this at end of contract)
50 - fuel - I have a work vehicle so this is absolute maximum and there are no other costs to it.

200 - food? I currently would say I spend an obscene amount on eating out as I am knackered / lazy / depressed about cooking for 1 (Ds has a packed lunch on way home, cooked meal at school) so this is a guestimate for 2 of us for a month.

50 - cleaning products / loo roll / toiletries / bits that aren't food.

I have no savings and I need to find / put away money for my tax bill as from next Jan (which terrifies me)

Have I forgotten anything?

That makes total in - 2700 (though usually aprox 2400)
Total out - 1650

Why am I always broke??? If these were your figures, please will you tell me how you would run your accounts so I can learn how not to be so bloody crap!

A million thank you's if anyone has read this far! ps name changed as I am embarrassed - cubes of poo, your minge etc etc....

Yup that's right Sunbeam, honestly it's horrendous. It made my tax bill a quarter of my income last year.

Nightmare!

Synthetic thank you, that was really useful to see - it makes my money look manageable at least! I like idea of 2 days no spend too, I am a huge fritterer at the moment, I have some really bad habits I need to knock on the head.

Greengoblin
-I don't really buy us clothes on a monthly basis. School uniform and clothes for ds was last bought in Sept and was about £250. I will buy more about Feb, but about £100 usually. I have never had any money so not bought myself clothes in a long time!
-days out - yup, this is a big one actually, we can spend £50 a day at the weekend on a trip out and some food - this isn't every week but adds another £100 - £150 on to my monthly outgoings
-clubs for child - his dad pays these as they are added on to the school bill.

• birthdays, Xmas presents etc - I do these as they come up, but spend a lot.... I need to average it and make it a montly amount don't I rather than big pay outs 3 times a year (ds birthday, my mums birthday, christmas)

-do you have any sports memberships or similar - nope, no social life to speak of.... unless take away eating counts?! household maintenance? - house is rented from a relative, I do upkeep etc and decorating, but anything big would fall to them dentist - I don't go.... the buggers terrify me haircuts - twice a year for me, ds is every couple of months at a fiver a go. I just absorb the costs of this I guess.

are you total rent and bills really only 950? are you including all utilities and council tax - because I rent from a relative it is all included. It used to be their house so they just told me what to pay them to cover all bills and mortgage etc.
do you have any insurance? I have life insurance at £10 a month, I probably need to increase this now I am earning more too as it was a basic policy.
public transport or do you always use car? always use car, it is paid for by the person I do work for.

clashcity £460 a month seems impossible at the moment - I need a really hard look at all my finances and to get them into a state where i know what is going on.

Thank you all so much for this, it is really helpful (if not fucking terrifying!)

I set a task to shave £150 on my monthly bills

Changed my electric & gas which saved me £44

Changed my mobile to sim only as contract was up, this saves me £14 plus net do big data sim only.

I have ditched my land line £10

£69 so far

Eating for two, pick 10 minute quick meals or batch cooking and freeze two portions a week so when you fancy eating out/ can't be bothered to cook you can reach in the freezer. Pasta and pesto is always my can't be added to cook meal which take ten with added frozen peas and sweet corn it's fairly healthy.

I can't write down everything that I spend, I forget etc. So instead I keep every single receipt for each week, and use cash rather than card. I then have control of what's being spent.

Nope - I am just self employed, the franchise brings me in no money but costs me, my other role I have started a few months ago.

If I have been self employed for a few years but under the tax threashhold will I still have to pay the year afters half of tax as well? Or is it just if you do that in the first year? That makes no sense does it? Arse, arse, arse!! Why the hell do they do that? It is a stupid rule!!

Start budgeting for a dentist. They can be lovely these days, I see a fantastic Spanish woman, she is so kind and all NHS, look on here

You need to stop 'absorbing' costs and bring them to your budget to have proper control. Sounds like your total household haircut budget will be £22 a month (that's £50? a time for you twice a year and £5 x 6 times a year for ds). That's not nothing. Don't forget to include any tip you give.

Clothes add up more than you think. You've told us about £350 a year for your ds, and I think you must occasionally buy yourself maybe a pair of shoes or a pack of underwear or tights? How about £70 a year for you? That would add up to £420 a year, so £35 a month. Again, not nothing. Put it in the budget.

I think £200 is perfectly doable for food 2 of you, of course, but if you're actually spending more like £500 at the moment, it's going to be a big change. You'll need to have a think about what works. There are a lot of good mealplanning threads.

So say your tax bill was 3000 you would pay 3000 then 1500 of next years tax in jan and in July you'd pay the other 1500.
Then if the next year your tax bill was £3000 again you'd only pay £1500 in jan and £1500 in July,

It's so that you in your last year you don't have to make money to pay your tax then get taxed on that and end up having to work forever.

It's so irritating though.

God i think I have massively overstated the haircut budget sorry!! It's only £12 a month! Still not nothing though [climbs back on high horse]

I have to goto bed now as Ds keeps waking up - thank you all so much, I am so bloody grateful even if I am now terrified!

I am not disappearing, I will work on this tomorrow and will report back then.....

Suspect I won't be sleeping much tonight! Thank you all though, I needed to hear this

When you say you 'fritter' money away what exactly do you mean? What is it you buy most of? Takeaways?

Please don't worry OP it'll all be ok, you just need to get a grasp of it. Once you do you'll feel amazing x

annandale I was about to knock my twice yearly haircut on the head based on that

Maxwell I am beginning to see how being employed is easier!

I know I keep saying it, but thank you all again right, I am off to settle ds..... night terrors are a bitch!

Yeah, its always salvageable OP. And you have a whole year to get sorted!

Thanks for the clarity, Maxwell.

sorry, I really am going - but I'll answer first!

I fritter it on all sorts - I spent £50 today in boots and only went in for cold and flu meds. I ended up with conditioner, cotton buds, vics vapour rub, some eye make up I had run out of (which was on promotion so I got 2 extra pieces of make up so I got a free make up bag)......

Mostly though it is eating out. For breakfast I had a saisage sandwich (£3) dinner was a meal out after school (£27)

I eat at my local cafe at least one meal a day I would say (this is horrifying to admit to)

I feel like DS is okay, I cook for him and look after him well - looking after myself though? I am shite at it. I know I am. I struggle to feed myself, look after the house, work. So I buy crap like the above on pay day to make myself feel better and then have other people cook me food cos I am never organised / energised enough to do it myself

Really sorry - I always need a calculator to divide by 12 [70s education emoticon]

You sound like me, OP! We can do this! X

Why don't you speak to an accountant. It's going to cost you no more then a couple of hundred quid and they will advise you how to set up a business account as well as all the things you can write off against tax, as well as understand what your tax bill will be. I think it would be money well spent

You then just need to manage your disposable income

There's no need to be about it, you're hardly spunking it all on gin and poker. Sounds like having someone cook for you is a major comfort to you. You do have to start by being honest to yourself about what you are spending though. Maxwell's right, as a reformed spender [sort of] I can reveal that it feels great once you're on top of it (provided you do have enough to live on).

I personally wouldn't cut your supermarket spend down too much. You are going to find the transition to not eating out often much easier if you have some ready meals and easy stuff in the fridge. If you like a sausage sandwich, buy yourself some decent cold sausages, some good mustard and leaves, some nice rolls, and you will actually find yourself enjoying what you made more than the one you bought out. OK it will cost more than £3 to do that but it will pay for itself quite quickly.

youre overwhelmed and that's ok you have a lot on.
Would getting a cleaner make you feel like you were more organised?
I know it sounds backwards but when I got a cleaner it meant I had more time and energy to do other stuff and meant I actually saved money (truthfully I actually made money because the time I was spending cleaning I spent in my business).
I agree with pp about organising meals in advance. I love comfort food and I know I need to have something hot actually made when I get home or I will get chips so I use my slow cooker every day. I know it's not for everyone but it has saved me so much money over the years it's unreal.
this also sounds a bit mad but I found that when I have an impulse to buy something if I just put it in my basket then wander around the shop with it for a while the impulse subsides pretty quickly and I usually put my basket down don't buy anything. Sounds weird but
I used to be terrible for grabbing stuff I didn't need and now I just kind of hold it for a while then put it down. Not sure if that's a real tip but it works for me.
Take out the cash for the week and only carry as much cash as you need for the day. My husband does this and it works for him.

I really do wish hmrc would SHOUT about payments on account when people register for SA as self employed. It comes as a hell of a shock for many first-timers and can be a real killer.

Good luck op.

I would suggest seeing an accountant early in April and getting your tax return done straight away (you still don't have to pay until January) so you know exactly what you're dealing with. Do not, repeat, do not leave it til January to do!

I know how easy it can be to fritter away money - I am captain spunk of the spunk brigade. I discovered I was spending £100 a month on bloody lunches for work. If someone had told me that, I'd have said they were ridiculous. I now spend £20 a month by bringing leftovers, making scrambled eggs in the microwave or having soup or cereal. That's a saving of nearly a grand a year with very little effort.

Financially, if you can keep to your budget up top, you should in theory have £750 to £1,150 a month spare - so there's a lot of money going somewhere. Now you just need to identify it where it's going!

Maxwell, you are fab!!

maxwell I do that too! And I've discovered that the buzz of putting it back on the shelf beats the buzz of actually buying it then thinking 'why did I even buy that?'

Although staff at the local tescos think I'm nuts.

I do have great sympathy with you. I spent years sorting tax returns and bills as a self-employed person. The joy of now being retired and not having to do this!

I really do think that you need an accountant. I always used one and he agreed for me to pay monthly - I did not like seeing that money go out each month, but he knew every tiny thing that I could legitimately set against tax and he saved me a load! You also need to know that you are functioning within the law - the last thing you need is the anxiety of finding that you have inadvertently done the wrong thing.

Many franchise companies provide basic advice about tax etc. - does yours?

You have taken the first big step by realising that you need to get a grip on all this - so well done and good luck with it all.

Small stuff - but all helps...

Stay out of boots, hugely expensive. Cold meds come from supermarkets, Wilkinson, poundland. Generic drugs work just as well as branded.
Stop buying makeup, clothes for you, takeaway coffee ( carry a water bottle) , books ( use a library), magazines ( all total crap). No clothes for you unless you have actually run out of something and need it. Knickers , tights, socks, such as that.

Shop around for utilities and insurance ( contents , car), broadband/ landline. Do you need mobile internet?

No adult presents. Batch cook and freeze - takes no longer and means you have cheap good food in the freezer.

Its a start.

Depending where you live, £950 isn't necessarily cheap for bills. Are they on the best price for gas and electric for example?

If you are eating a lot of takeaways/convenience food, that is likely to be a big source of the 'missing' money and should be something to focus your energies on.

You say you do private mileage in the car provided by the business. What is the arrangement here? Could extra tax be due on this - businesses don't generally 'give' people cars - the cost has to be accounted for.

It is normal to pay tax for private usage of company cars, but perhaps not if you are not an employee. You do need to properly account for the costs though, rather than sticking £50 a month in as a 'moral obligation'. The tax system doesn't work on moral obligations unfortunately.