I need to start budgeting! Any tips?

[tinkerbug]

DH and I need to start budgeting! I have never done a proper budget before and don't really know where to start.
DH is on a salary with occasional overtime, I'm self employed so my income varies, sometimes by several hundred pounds, each month.
We have some debts on credit cards and a personal loan. No real savings other than for the DC.
I've started doing some reading, I'm reading the Dave Ramsey book, have had a good root around MSE website and have started looking at the YNAB website too.
Any top tips?

If you’re any good with Excel, draw up a spreadsheet with all the months of the year, amd your fixed outgoings every month. Then add in realistic spends on on off things like birthdays, car servicing etc against the appropriate months, and that should give you an idea of ho much money you have left to play with.

We have everything possible on direct debit/standing orde, right down to ds’monthly allowance, and we then withdraw cash every week to pay for food, fuel etc. We rarely use our debit cards, which means you don’t get the numerous small spends that seem to knock hell out of the account.

We’ve done this for years now and it totally works for us

Look at YNAB (you need a budget- some online software) if you have a good google you can get a free 3 month trial. We are both freelance and it's brilliant for us!

If you've looked at MSE, their Money Makeover tells you everything you need to know, eg reducing expenses and making debt as cheap as possible.

For your DHs overtime, I'd discount it from the initial budget and then when it comes in, use it to make extra payments towards your debts. When the debts are paid off, it can get added to savings and/or pay for an extra treat, depending on how your savings are looking.

For your income, work on a low average figure, and again, if you have extra money, pay towards debt, savings, or treats, in that order. Maybe get your income paid into a separate account and then set up a standing order to pay yourself a regular monthly 'wage' to even out the peaks and troughs.

Another top tip is to make sure you account for irregular and unpredictable expenses. You need to put aside money each month to pay for insurances, Christmas, holidays, and anything that breaks, whether it is a car, household item, or vet expenses if you have pets.

Many people say that they are 'short this month due to an unexpected car bill' but what they really mean is that they failed to save for car repairs, which are very likely to happen sooner or later and spent the money on something else instead.

Same as @SheSparkles, I withdraw a set amount of cash on Thursday that has to last until the following Thursday (so spend wisely!)

Meal plan (same dinner every Monday/Tuesday and so on) so I only buy food wise what I need.

It's taken nearly 20 years of being crap with money to get here, but it seems to be working for me.

Keep in mind that your budget won't be perfect, it will take months to get to a point where your budget is near perfect.

Work out what you spend money on and fit that into categories. Transport, Clothing, Food, Utilities (electric, water, internet etc), Housing (rent:mortgage, council tax, maintenance, ground rent, gardening).

Food is often a category which people think they spend less than they really do. So you will find that Dave says to have a cash envelope for Food. Really track what you spend on food, get a good feel for what is a reasonable amount to assign to that category for your family.

Rachel Cruze I expect has some videos on YouTube about budgeting.

Agree with PPs take your husbands wage without overtime & your lowest monthly wage. Then use that to work your budget. If you can afford to live off that then any extra is a bonus which you can use to clear debt quicker or have a little treat.

Remember to list everything from car insurance right down to your daily coffee. Set a plan for saving for insurances. For example my insurance is around £800 so I make sure I put by £50 a month & then I only need to "find" £200 extra when its due. However if I have any money "spare" at the end of the month I top it up so I don't have to be short on the renewal month.

Look at if you can reduce your debt such as a 0% credit rate. It might only be a slight decrease but at least your debt isn't increasing whilst you try to pay it off.
Look at which of your debts has the highest interest & make the biggest payments to them.

I also withdraw a set amount of money each weekend & I don't allow myself to get anything more out. I have found that I tend to have money left this way and have an expected amount left in my bank at the end of each month. I use it to top up my savings so I can relax with a pillow for any unexpected bills.

My partner and I are really starting to tighten our belts at the moment & the above are a few things we've done. However we also make sure we dont live like hermits and put a little aside for a few drinks with friends or a cinema trip.

The reason I recommend YNAB is that it has you allocate your money as it comes in- and if that income is variable it's brilliant. Obviously you'll start by allocating the essentials- rent/mortgage, minimal groceries, key bills etc, and then when those are ticked off you can put a bit here and there towards the fun stuff, and the sporadic stuff. It's brilliant for occasional expenses too- so say that 800 insurance bill- set that as a savings target for the month its due, and YNAB will keep track of whether you are putting enough by.
You enter in your transactions as you make them, so you always know how much is left in each pot (oops, only £10 left in groceries, better put back the caviar...), and you can move money as you need to, but only the money you have, not the money you think you'll get (eg- you've already allocated money to next months rent, but you need to pay a larger than expected gas bill now. Move the money to your gas section and then allocate the future rent back in once the money comes in.). It encourages to gradually get a month ahead- so money set aside for everything you need to pay for next month- and it really works, somehow.

Honestly, I used to do spreadsheets and taking out cash, but I find YNAB somehow makes it clearer. And we really do spend less, more mindfully and with less sense of impending financial doom, since starting it last January.