What else do you budget for?

[spnfan]

DH and I have a fairly substantial amount of debt behind us (27k-ish). We are paying more than the minimum payments on the credit cards and so are on track to paying it off.

Now that I feel the debt is under control and we are spending sensibly I'm looking at trying to save some money each month, not just for long term spending but also short term.

We don't have a lot of disposable income - roughly 5/600 after bills but before food and petrol but I'm finding things like haircuts and new glasses and winter shoes all need paying for and we've not made provision for them simply because it didn't cross my mind to do so and as our disposable income is quite tight so these things tend so really make the rest of the month tough.

How much should I be aiming to out aside and for what?

Thank you!

We are in a very similar financial situation, one expense such as a new pair of glasses ruins the month! Of our £600 (ish) spare I try to keep £50 aside, however it does tend to get used rather than built up iyswim. Other expenses that we need to consider are family/friends birthdays and dd’s swimming/dancing costs. There seems to be something every month. It’s very tight but I am happy that we are on track with the debt and realise we just need to sit tight for a few more years x

You could work out what you need to buy in a year (clothes, shoes, haircuts etc) and set aside 1/12 of that’s per month. Given your difficult situation, I’d hope to live if on the bare minimum to get rid of debt so most of the 500-600 would go towards paying down the debt faster.

JoJo, it's not that I don't know how to budget it's that I was curious as to what I ought to be saving for that I'd forgotten! Spectacles, shoes, and
clothes are on my list but I don't know if there's anything more obvious that I ought to be factoring in. :)

Of that 5/600 left we have to buy food and petrol and my husband drives 60 miles a day so there's very little left to throw at debt. We already pay as much toward the debt as we can afford.

Elsie, it's so tricky, isn't it? Everytime we have more than £100 in savings it gets sucked into something else.

Birthdays are a good one, I'd not thought of that and the majority of our family birthdays fall in one month!

It's frustrating to know that there's not much more we can do about the debt other than just sit tight, isn't it? Still, in even 6 months we'll be in a much better position!

Break it down into categories.
car
Tyres
Servicing
MOT

pets
Innoculations
Insurance
Excess on pet insurance

school
Uniform
School trips

Christmas and birthdays
Presents
Celebrations

Holidays
Travel
Accommodation

Tv licence, phone, insurance, car tax, Christmas....

I’d look at my bank statements over the last year and highlight all the spending that caught you out or is likely to recur and factor it in.

And cut all non essential spends till you have paid off the debt. Work out when that will be. Money saving expert website very good. I’d also with that amount of debt look at talking to someone like stepchhange.

On the money saving expert website, there is a budget planner that mentions a lot of this kind of thing. Hairdresser, dentist, etc. I would also recommend using "you need a budget" programme. It has revolutionised my mindset about the way I budget and spend my money. Been using it for 6 years and I would hate to be without it. It has changed in that time, in that it is web based and now has some different features, but I know it is well thought of on MN.

Good luck on your debt busting way. It is a wonderful thing to be debt free. Even when I can't afford a new non essential, it is a great feeling to know I have enough for the essentials and don't owe anyone any money.

Could one you consider a debt relief order?

That is a lot of debt and I could not deal with it. If it was me I was make 2018 and year to clear as much debt as possible. One year to really reign in the budget should be doable as you know it is only this year and hopefully it will help you change your spending.

With regards to things like birthdays, while you have all this debt you can’t afford to buy gifts for anyone else other than children and just your own. Tell your family your situation.

Moneysavingexpert is an amazing source of advice.

Our debt is under control, yes it's a huge sum but in 6 months the final two finance agreements we have will be paid off, the remaining debt is a 9k car loan and the rest is on 0% credit cards until at least 2019 so while the debt is high it's well managed. We pay almost £800 off the debt each month too.

We live within what we have left each month now which is so dull!! but as I said, it only takes one unexpected purchase to thrown everything off!

Great idea, Mrs. I'll look at doing that next time in on the finance spreadsheet!

Hunter, I tried YNAB and I just couldn't quite get on with it. Perhaps I ought to give it another go...

Maybe chose a sum as a "contingency" for each month. Not savings, but ready to be spent on irregular payments. I would find it hard to have a different account for every individual bill.

I definitely agree that it's the "forgotten" things that screw you over when you start budgeting. I always have a "Unexpected / forgotten costs" category and try and put £100 a month in, however now we have got better at not forgetting things we often have almost all of that to roll over to the next month.

With YNAB you do still need to tailor the categories to you though.

This is the rough way I have it set up under each group header:

"Everyday Essentials" - Groceries, Unexpected costs, DD essentials (used to be nappies, now not much really, anything essential bought outside of the weekly online shop), DD clothes and shoes, Transportation (trains, taxis, buses, parking), Toiletries, Cat litter & food, Petrol, Home maintenance (inc window cleaning, stuff like unexpected plumber visit etc)

"Everyday non-essentials" - Stuff for our twins due in Jan, House (this includes planned projects like decorating etc), Fun stuff (for me and DH usually empty haha!), DD Fun stuff (soft play etc), Family days out, Eating and drinking out, iTunes and kindle, Garden

"Savings" - a long term savings category, then 4 accumulators where I put maybe £20 or £30 a month in and spend from it as we need to: Christmas, DD birthday, Other gifts (wedding presents, bday presents for our nieces, etc), Car repairs (this covers tyres as well)

"Holidays" - Next holiday accumulator (may be paying off a holiday we've already booked, or just putting a bit extra in towards an unknown future holiday), Accommodation and transport (just used when booking), Spending while on holiday (only used when on holiday)

"Monthly fixed bills" - ALL our monthly outgoings that are the same each month.Don't forget any monthly charity DDs in here.

"Monthly variable bills" - for us this is just nursery bills and NowTV subscriptions, I just like having them separate.

"Annual bills" - Anything that isn't paid monthly. I work out the annual cost and divide by 12 and allocate that much each month. For us this is Amazon prime (£79 so 6.58 a month), Car service, MOT (note extra repairs are covered above), car tax, RAC, stuff like national trust membership, annual vet checkup, all insurances as we pay for them annually. Also DD's toddler music and swimming classes which we have to pay for termly are in here too.

The annual bills bit can be painful if you start doing this in December and your house insurance is due in February, say. But over time it all evens out and you're only putting say £30 a month away for it instead of having to find £360 in one fell swoop.

I've just realised we don't have a vet bills contingency account...

So that is all our joint account stuff but I also have a budget for my personal spending and some categories may be useful:
Haircut, Saving for Tax (if relevant; I earn a little money from self employment so have to do a self assessment), Exercise class (I have to pay termly), Clothes and Shoes.

Sorry for very long post but hope that is useful!

should say *Don't forget any monthly charity DDs in here

I've got to say that the peace of mind after about 6m of budgeting with YNAB now, of knowing that most stuff is covered in our budget, is really great. Really now only genuine unexpected/unpredictable things surprise us now. Once you're able to start putting money away for stuff like presents and Christmas it really takes the pressure off when you realise you're going to someone's for dinner and you've forgotten to buy them anything and the only place near then is a Waitrose where all bunches of flowers are £15!

The app I mentioned above - Toshl - is pretty basic compared to YNAB - but it's really helped me that I've put in all the expected spending for the year - and looking back at spending over the year allowed me to input 'spikes' like car insurance and servicing. So I can see them coming on the horizon.

So while it sounds like YNAB might be more what you need - if you can't get on with it a simple budgeting/spending tracker app might give you a start.

It's good to see your 'contingency fund' growing as well.

For the first time ever I know have the equivalent to 3 months wages accessible in savings. I feel much more secure.

Also don't forget to make a note of everything "new" you spend on so you remember it for next year!

There's a good tool in MSE (called a SOA I think?) which breaks down the things you need to think about, but forget because they are not every week.

It's also worth looking in the DebtFree Wannabe forum - great advice in there.

My budget is in an excel spreadsheet and it's listed like this

HOUSEHOLD
Rent
Council Tax
Gas
Elec
Water
TV Licence
Sky
Virgin (don't ask, but yes, we are paying for both at the moment)
Food & toiletries
Home insurance

TRAVEL
Travelcard
DPs petrol

OTHER IMPORTANT EXPENSES
Nursery fees
Life insurance

PERSONAL EXPENSES
Spotify
Readly
Amazon Prime
Cineworld

CREDIT
Credit card 1
Credit card 2
Credit card 3
Credit card 4
mobile phone bill

TOTAL EXPENDITURE
SURPLUS (salary - expenditure)

DP and I have separate columns which take into account who pays what, and any transfers between us (I usually pay some of the rent, but I do also pay all of the nursery fees).

The spreadsheet also have different sections for each month as mostly, our costs stay the same, but I can then predict how changes will impact us.

I have a really high prescription so my glasses can cost a few hundred every 2-3 years. Of my surplus after everything, I usually have £300-£400, and I try to put at least £100 in savings every month.

I transfer a heap of money into my savings account every month, which is then subdivided on the spreadsheet into holidays, Xmas, insurances, replacements (a big category, that one!), car etc.

what's left in my account is divvied into DDs, miscellaneous, household, fuel, entertainment, beauty, school dinners etc.

So my wages are spreadsheeted to the nth degree, but for me it works!

Tbh, if the 5-600 includes food and fuel for a lot of driving + you already put £800 per month towards debt, I’d lean to the ‘contingency’ idea. So be frugal with food, spend on fuel whatever it costs and put the rest into a ‘contingency’/‘short term savings account’ to use for repairs, clothes and other bits and bobs as they come and just try to as frugal as possible. It’d be difficult to split the amount left into 20 different budgets.

You mention that in 6 months some of your commitments will end? Perhaps at that point, the extra disposable income could be saved if you get used to living on the current budget.