Critique my Budget & Savings

[2020bust]

I separate my budget into the following categories:

Direct Debits & Bills: £1540
Childcare: £900
Food: £350 [£80 a week]
Petrol: £120
Cleaner: £125

= £3035

Our joint income is roughly £3530 [this may be slightly higher if either of us earns bonus but it's never much more] Or possibly slightly less if someone has a day off sick.

After the above outgoings it leaves us with about £495 to spare.

I have a monzo account and try to save what's left into different pots so:

Emergencies: £100
Christmas & Birthdays: £225
Extras: we don't put a set amount in here but it'll be anything left over so if we get any bonus or the childcare bill is less than the amount allocated, etc. That'll be put here.

Then the remaining £170 is spent on tobacco. I know, I know. I'm trying to half this to start with, with an eventual plan to quitting it altogether.

I always end up with no money left in the food budget and having to dip into the extras and/or the emergencies pot. I think it's a combination of bad planning, snacking, drinks, etc. And things that aren't accounted for normally like running out of things like mayonnaise, forgetting to make lunch and getting lunch out, needing new lightbulbs, etc.

I also feel like we don't have a lot of leeway for things like new clothing, haircuts, etc.

There's a few DIY project we need to do this year but no money or budget to do so, new furniture needed in certain rooms, etc.

There's never anything spare for days out which is a shame but obviously, non essential but when slogging away working full time for very little reward and feeling like there's no money to actually enjoy the time we aren't at work, it's a little disheartening.

I also started selling stuff on ebay. I didn't have much high value stuff, just outgrown toys, clothes, some unused presents and made £250 on stuff I'd normally have given away/ charity shopped.
I am going to try and regularly put things on there now, so I probably won't make as much in a short period again but still helps.

I do wonder if perhaps the issue is that we just don't have enough money. Surely, budgeting and cutting back only takes you so far. I'd have no idea where to start bringing more money in though. We both work FT. I earn a lot less than DH but without gaining some sort of qualifications, training to do something different, etc. I'm unlikely to ever be able to earn much more. Wish I could though. Hate my job!

Forget trying to give up smoking for now, but would vaping be cheaper?
I've no idea personally on the costs but I assume it would be, plus it's easier to start cutting down with lowering the nicotine content.

The reality is that 5 kids with one in full time childcare is going to be expensive. That’s just life. Do try and write things down or use an online budget though. You may find money here and there that you can save. Things like meal planning will help.

Sorry if missed but does your dh have to pay CM?

Ah sorry just seen

I wonder how the heck his previous partner is coping with CM of £440 for 4 children!

Yes, he does pay CM. I included that in our Bills and Direct Debits. Its about £440 a month.

It's already been asked but please split out your bills, unless you've already spent time on them it's very likely that savings can be made

There’s no point waiting to quit smoking. What are you waiting for? Go for it!

In terms of bills, you need to think about the basics and work from there.

Look at your "bills" section - is there anything in there you don't use (Netflix subscription, gym membership ...) or don't get value from? Cancel that. Have you shopped around for cheapest prices for utilties? What are you spending on mobile phones? If it's more than about £10 a month per person, there are likely savings to be made there by switching to PAYG.

Childcare and petrol I'll assume there's nothing you can do about (but perhaps think about whether you use the car for short journeys).

I'd look to cancel the cleaner and get everyone including all the children to pitch in once a fortnight (unless they are all small, which seems unlikely). Or if you're loathe to do this consider whether you value days out with your children (for example) more than a clean house.

Birthday/Christmas is very high even with 5 children. If this was £100 a month that will still mean £100 per child on birthdays and Christmases plus some over for others.

If you cut the birthday/Christmas down you can put some of that money towards "medium term" savings - to spend on general house maintenance/replacing things etc.

I'd allow your self the food budget you actually spend and then make yourself stick to it. Meal plan and go shopping once a week. Only top ups allowed are milk and bread.

I'd put some money aside for "fun things" as soon as you get paid, then it won't get frittered away.

@Bringringbring well, obviously I don't know the ins and outs of her finances and don't like to presume anything but I know she and DH get on well. If she ever needs any help with anything or extra money for things then DH will help as best he can. She's great actually. I have so much respect for her.

Bills broken down:

Mortgage £576.40
Life Ins £31.18
Buildings Ins £23.13

Council Tax £137.81

Gas & Electric £91.13
Water £28

Water Debt from previous House £25 (Only 3 more payments left I think)

Car Ins 1 £43.10 Renewal this Month
Car Ins 2 £26 (just been renewed think it's a couple of pounds less now but need to check with DH)
Car Tax £25.37

Maintenance £440

BT £29.99
Netflix £8.99
Amazon Prime £7.99
Phones £31
TV Licence £12.83

BT, Netflix and Prime seems excessive - so you really need them all? Do you actually use more than one screen at a time for Netflix? If not you could downgrade your package and save £3 a month (all adds up!).

Your gas and electricity seem a little on the high side, although depends on your house of course. Assume you're doing all the usual turning things off when not in use, water on for minimum time required if you have a system boiler etc?

I thought your food budget didn't seem too bad but sounds like it's actually more than that if you're dipping into other funds for food. Although obviously depends how often you have the step kids round! Do you meal plan or buy a lot of branded stuff? Do you have much food waste?

I'm at the cost of your car tax, but not much you can do about that.

Your bills seem OK.
I'd go for the cheaper Netflix. Get a new deal for your Internet mines only £17.
Look at sim only when mobiles come up, I'm going to do the same.
Your car insurance and tax are pricey. Might be where you live or maybe changing car would help.
Really all you have left after doing that is cutting your present budget. But if you did it all it would make a big difference.
£50 less on presents, £13 saved Internet, £2 Netflix, £10 phones. £170 smoking. Sell stuff on eBay. All would add up.

Definitely shop around for gas and electric, we have a big ISH house and pay about £75 with bulb.

Have a really good look into what around you is free/cheap. You will be surprised.

Your dc is only 18m right now they only need your love and attention. Take them to the park, see if there are any cheap soft play options.

Definitely quit smoking. It's just so so bad for you, especially roll ups

We've recently changed the way we sort our finances as we have a toddler the same as as yours. Firstly I got a monzo account and transfer £500 a month for food, petrol and any spends. This stops me dipping in to other budgets as I can see what we are actually spending as well as whether i can even afford clothes/hair cut/outing etc. DH changed from smoking rolled tobacco to vaping when DD was born and finds it cheaper. Plus its safer for DC as there is no 2nd or 3rd hand smoke risk. He has poor MH and used smoking to help so he couldn't have gone cold Turkey but really hasnt noticed any difference to vaping - he actually prefers it due to the flavours and being able to bulk order liquids online in a competitive market.

I would suggest you downgrade your Netflix as you probably wont notice the difference. We have prime as it stops trips to the shops but make sure you can genuinely afford it or maybe cancel it and see if Amazon do you a free months or something (I bet they will). We use Amazon subscribe and save for things like dishwasher tablets, cat food, toilet roll/kitchen roll and it saves a fortune. I have ordered us a few hello fresh boxes as there are deals on the first few and then i can cancel. We also changed our power supplier to bulb which immediately reduced our bills by £30pm from ovo. Plus my friend referred me so we got a £50 credit each. I now also have a Tesco delivery saver pass for £6.99 a month so can get as many delivery slots as needed for that which stops me impulse buying. Buying online can be more expensive but at least you see what you're getting and what's on offer.

Your childcare costs are so high. Could the person who comes to clean watch DC for a day a week whilst they are there? Could you both use AL for 1 day a week to reduce nursery hours? I also live in SE so know how expensive everything is!

If you buy something like National Trust membership (assuming you drive and have places reasonably close to visit) that will entertain you all at the weekends and means your entertainment budget isn't frittered away as it's already spent. Bring a pack lunch and thermos obviously.

Have a look at zero budgeting and give yourself 3 months to get on top of things.

I do wonder if perhaps the issue is that we just don't have enough money

More like a combination of high essentials (childcare, child maintenance) and spending a lot on non essentials (smoking, cleaner, presents). Most people can't afford all those things so have to cut back somewhere.

I'd also question whether you need two cars given that you don't seem to drive them very far -£120 pm isn't that much petrol for two. Can either of you cycle to work or take public transport?

Your £100 pm emergency money probably isn't enough either if it's got to cover maintenance (and replacement?) of two cars, plus broken white goods etc. These aren't unexpected costs, they will crop up sooner or later so need to be properly planned for in your budget.

Your life and home insurance look quite expensive, any chance of shopping around on those, both will be less if you manage to stop smoking too.

On the matter of smoking, DP quit successfully using Champix tablets after years of heavy smoking and unsuccessful attempts to quit. Ask your GP or stop smoking clinic.

any actual savings? What happens if one of you loses their job? It can happen to anyone at any time.

You need to lose all those extra TV subscriptions and obviously the smoking. Huge amounts on tatmas and birthdays also need to go right down until you have a cushion.

most of the essentials don't seem too bad, although just to check you aren't paying insurances monthly? If so, go to annual as the interest rate on monthly payments is high. And of course shop around at every renewal. With two cars a multi-car policy may (but only may) be cheaper.

There's never anything spare for days out which is a shame but obviously, non essential but when slogging away working full time for very little reward and feeling like there's no money to actually enjoy the time we aren't at work, it's a little disheartening.

This last paragraph of your OP , grates a bit , considering you spend

Cleaner £1500 per year
Smoking £2040 per year
Presents £2700 per year on 5 children

£6240 per year , thats a big chunk of money that you have chosen to spend on items others may not choose or are able to spend

The secret isnt what you earn its what you spend

For things like running out of mayo, gravy granules, bog roll, that type of product, I've found it useful to spend an extra few pounds one week on getting a bit of a rolling stock in, if you see what I mean. Aim to have these things in reserve and be a jar ahead of yourself. Cheaper in the long run than running to the corner shop to be overcharged, but does require initial outlay and space.

You do have a point that £3500 isn't a massive amount to have to cover nearly £1500 a month on childcare and maintenance on top of everything else. And you're combining that with pets, two cars, a cleaner and an expensive smoking habit, so it doesn't surprise me that things are tight even with cheap housing.

That's not to say you can't shave a few things down, and they can add up. Would agree you don't need both TV subscription services. Might be able to get cheaper insurance, and that is shitloads you're spending on presents.

Honestly, your bills are good @2020bust I think between the smoking, cleaner and presents, that's where all your extra money is going. Between them that's over 6000k you could be saving. I'd absolutely switch to 100/month for the gifts and you could give up smoking tomorrow. Use Alan Carr, make appt with your GP and just commit to doing it. Not only for your finances but for your child too.