How do you budget?

[Noshowlomo]

So, history, I used to be rubbish with money in my early 20s, bad credit etc, now late 30s, excellent credit, homeowner but I feel like I am in a cycle of just getting by even though my husband and I earn decent wages. Is it normal to be completely skint before pay day? I really want to move house and the house I want is £60k more than the one we have now, and on our wages we should be able to afford it but we both pay back loans which doesn't help, but otherwise I don't know what I am doing wrong.
We don't have a joint account- would this help do you think? All bills out of one account and then the rest is ours? Does that help for you? We are a family of 3 and spend around £400 on food a month.. to me that seems loads but I am sure I could make it much cheaper.

Any help and tips for a girl dreaming of her new home and hoping she can get it..
Thanks!!

Write it all down. Every penny you spend. On a bit of paper, an Excel spreadsheet, or use an app (You Need A Budget or similar).

Then you'll see where the money is going.

Then create a budget - how much money you have coming in and allocate essential expenditure - mortgage, bills, loan repayments etc. Then see what's left, budget a weekly/monthly amount for food and other important stuff.

What's left after that is what you have spare to spend. Don't overspend. Consider turning some of the leftover into savings - so a standing order at the start of the month into a savings account, to stop you spending it on crap.

When you write it all down its amazing how much can be frittered away on stuff you don't need.

Thanks @GoneFishingAgain I know I spend so much on crap and have nothing to show for it. Before all this corona kicked off I spent about £50 in Starbucks on one. I was disgusted with myself.. but kept going!
I’m gonna get a budget app for sure... didn’t even know they existed. Thank you !!

It's not trendy but I use cash - I withdraw £30 on a Friday and that's to last me until the following Friday. You can't keep track when you're tapping away on contactless

I think that some people don't know that other people don't just spend loads of money on things all the time. I've a friend who would think nothing of just impulse buying a set of pans or a new duvet cover. Clothes is obviously a big one where people will spend vastly different amounts. She doesn't know that other people don't replace their towels every year.

GreyGardens88 pre Covid we took our weekly food budget out in cash and never overspent, it's a good visual. We also meal plan so we only buy the food we need.

With limited shopping now is a good time to really get into budgeting food shops, planning meals, batch cooking etc.

Well, unless you're a brand addict (very silly), you can easily save 25% of your food bill by getting supermarket own brands. If you must have shop bought coffee, take your own cup, most of them do, or did, offer money off. A budget app or spreadsheet will show you where the money goes, it's much easier to cut back when the evidence is in front of you. A joint account is good......cos then you can pay your bills first and live off the remainder. Set up dd's for all household bills, this averages out leccy gas phone council tax over the year and REALLY helps, trust me on this!! If you run a car, make it an older one and DON'T get it on pch or the other shite deals and belgme, they ARE shite. Combine shopping trips with other trips if possible, not too difficult recently cos of something or other going on at the moment, shop around for insurance car and house. Make a list of stuff you have to buy and STICK to it.....my wife is very happy for me to do the shopping......and so am I the way she shops!!! I wasn't good with money when we got together and apart from shopping she organises the money and I do the diy and car maintenance, this means we have money and working cars!! I don't spend without asking her first, I have no hangups about money control. Did I mention about brand names, I may have done :-) but we love finding bargains and rarely pay full price for most stuff, clothes especially. We couldn't have kids so don't have to worry about infringing little Frogmellas 'uman rights to have everything regardless of cost, or her inalienable right to run about in the house wiv just a vest on when it's minus 5° outside either (in joke in our house). You can save huge amounts by cutting bills and living cheaply but comfortably as we had to about 10 years or so. Finally, any money you can save after setting by for a rainy day, use to pay off debts faster. The feeling when you make the last payment is almost as good as.....well let's just say it's pretty good. This is what we did and are now reaping the benefits, see the monthly income thread here. Good luck and if I have made enough posts to qualify please send a private message or whatever they're called here and I'd be happy to suggest more.

I was going to go back to cash before lockdown hit because I kept tapping on small purchases and losing track.

I have a payment go into the credit union on the day I get paid, I have dipped into it once or twice but have built up a nice chunk of savings this way. It is money I would have otherwise frittered away but I don't miss it if it is gone immediately. I know if I have a car repair or need a new washing machine I can pay cash.

You could definitely get your food costs down by better planning, I make one meal a week from lentils/pulses which makes a difference.

Thanks so much all! I’m not into brands at all, but I do impulse buy stuff- I bought a duvet set I fancied last month and a few other bits from Marks- I am a marks fiend I will confess. We are vegetarians so don’t even buy meat so no idea how we send so much.
Well I’ll suggest a joint account to my husband and I’ve downloaded an app. I’ll stay away from ASOS and marks this month and see what happens 🤞🏼🤞🏼

We write our approximate income, list all DDs by date and then work out the amount leftover.

We have £150 per week for all spending, including work travel and food, so split this between us in to our separate bank accounts. So when one of us does the food shop the other sends the money for half the shop. A budget is permission to spend, so if we don't have it in our spending account we can't buy it. This has definitely made me more mindful of what I'm spending as I have to weigh up if I really need it, what else I might need to spend until our next weekly payday, whether I am wanting to send a bit extra to my Christmas savings account etc.

Another tip which is always a good one, make sure any amount you save is paid to a savings account on payday, and budget using the remaining figure. Move all DDs to a few days after payday, try and get them to all come out on or near the same date so when they are all paid you know the rest of the money is yours.

If you haven't already, have a listen to Dave Ramsey on YouTube and Spotify, he's really put a fire in me to clear my debts and start being intentional with my money. Good luck!

Thanks! I’ve got my little budget app and I’m filling that out now. Haven’t spent on ASOS (I normally buy something before pay day and pay by Klarna).
I’ll get onto Dave Ramsey. I need that extra push! x

She doesn't know that other people don't replace their towels every year

That's insane. Who on earth thinks it's 'normal' to buy new towels every year.

OP, £400 pm on food isn't huge, especially if by this you really mean 'groceries' so it includes things like cleaning products, toiletries and other little bits and pieces you might buy in the supermarket.

You mention Starbucks and that's a biggie. If you normally regularly buy lunch and coffee out of the house, it's easily possible for a couple to spend hundreds of pounds a month on this as a family, so a good area to focus on.

Obviously we've all been forced into this at the moment, so might be a good time to re-evaluate and set a budget and vow to limit this sort of spending to once a week instead of once a day or whatever. Similiarly if you buy food at attractions, usually a lot of money for bad food, so it's not really a hardship to take a picnic, which also saves having to queue up in a normally overcrowded canteen.

Whether or not it is normal to be completely skint before payday depends on your earnings and expenditure. Some people don't have enough money to cover the basics, but it sounds like you don't fall into this category, so it's quite likely you can trim some expenses.

Have a look at the moneysavingexpert money makeover and when you've identified how much spare money you should have after bills, food, travel etc, put some away to save towards annual and irregular expenses like holidays, car repairs, insurance, Christmas, washing machine replacement etc etc. This could be a few hundred pounds a month if you usually have an overseas holiday, run cars etc, so don't underestimate. Then you need to save some money for your new house, unless you plan to just increase your mortgage, but it would be nice to not have to do that if you have money to save.

After all the above has been covered, then's the time to think about setting a budget for personal spends by you and your DH, which should be quite small if you have debts to pay and are looking to move house. You also need buy in from your DH because if he's a spender who carries on as normal, he's just going to be undoing any good work that you put in. Definitely needs to be a team effort.

www.moneysavingexpert.com/family/money-help/

And I think the cash thing is a great idea and I’ll start that as soon as corona is over, as most places say pay by contactless now.

Thank you @BarbaraofSeville I’m staying firmly away from Starbucks (even though they’ve just reopened by my workplace).
Really good advice there !

I’m so glad I posted this, feeling like I can do it!!

I work out my essential bills for the next 12 months in April when council tax goes up and generally add 5% for inflation. Money to cover that then gets transferred to a separate account out of which all direct debits and standing orders are paid.

From the rest I work out what other spends I have for the next month like hair cut, transport, birthdays, vet bills and an evening out. The rest I save or use to over pay the mortgage.

I also learnt to keep a large float in my current account and treat that as a zero balance so it covers smaller unexpected expenses.

I just don't spend on anything I don't have to either to be sociable, be presentable or to maintain the house or exercise. I don't go high end on anything and will generally buy basic or second hand but will go above that for longevity or if it is for someone else. I have always done this and I don't find there is anything left after that and I am now in a relatively well paid job.

All that has changed is that I now have a bigger emergency fund though I want to increase that as my job is under threat although I am still working at the moment.

Unsubscribe from any marketing emails to avoid temptation, dont go in to shops just to 'browse'. Dont replace things till they're beyond use, use Freecycle and similar to get things free. Have a direct debit for savings. Shop in Lidl/Aldi.

I used to be dreadful with money and had terrible debt. I'm now debt free and although I'm much better with money I still waste too much, so I second what a PP said as soon as I get paid I put a chunk straight into savings. I'm really lucky that in Wales we have a building society which you can only withdraw from by physically taking your passbook to a branch. Its a physical barrier to me spending on a whim. I don't know if such a building society exists in other areas of the UK?
I'm on furlough at the moment and I am so relieved that I have a few thousand in savings. If this had happened a few years ago I would have been up shit creek.
I also have a monzo card which I transfer my shopping budget on to every week and I use for online shopping..

My partner and I do the following since we've been saving up for a new kitchen - each transfer the same percentage of our wages - 70% into a joint Mozo account. It's great as you can track spending easily via the app, assign categories and budgets, set up savings pots etc. I'm assuming you've worked out all of your joint outgoings - mortgage, food, bills, plus what you want to save pcm. Everything joint and household comes out of there and I set a budget of £70 pw for supermarkets and I can see if I am going over it and need to cut back the next week.

Then we have a savings pot and transfer £500 at the beginning of the month and scrape over whatever is left at the end of the month (usually a couple of hundred quid) It's massively motivating to see that amount going up every month and I sometimes just find myself looking at it!

We are also left with a small amount in our regular current accounts to play with - so individual socialising, clothes, treats etc. We both also have a small rainy day savings account each so anything left from here goes into that.

Oh and other tips from actual money saving -

• Shop in Aldi where possible (there cosmetic super are great) but you have to be disciplined and avoid the middle aisle!
• Make a list of meals for the week, including lunches and breakfasts and only buy what you need. I used to throw away so much food!

- Own brand cereals/ porridge, and e.g. an Aldi sourdough pizza and some antipasti is £6 and tastes amazing rather than the £25 delivery we used to get

• Avoid going into town as much as possible and growing shops! I go clothes shopping a few times a year and set a budget beforehand and take a list of what I actually NEED
• re impulse buys - If I want something, I Stop myself from buying it. If I Still can't stop thinking about it, then I'll treat myself at the end of the month. 50% of the time I forget about it though, and think god I'm glad I didn't spent £50 on that ornament I don't need.
• Keep a list on my phone of things I need clothing wise or for the house and buy one or two items a month.

Well I have taken so much advice and I have £100 in my savings, a good amount left over for the month after everything is paid and I am not buying anything I don't need. Like @MrDarcysMa i am making a list of what we NEED and buying that.
My husband did the shop on my card though and spent £220 so I'll go to asda next time as it's cheaper and we have spent a fair but more so that budget app is great for seeing where all my money goes so I'll doing meal plans and stocking up on all basics to stop me nipping back into shops.
Thanks all! Such good advice- don't know why I didn't start YEARS ago.x

Good for you!

We have a spreadsheet for all monthly outgoings - literally everything except personal expenditure:

Rent / mortgage
Council tax
Water
Electric
Car tax
Insurance (household, car etc)
Car maintenance
Petrol
Vet
Groceries
Netflix or similar

...and so on.

Any bills that tend to be annual, e.g. car maintenance, MOT, vet bills, we divide the cost by 12 and add that amount to the monthly total. That means we can anticipate the year’s outgoings and make sure there’s a pot built up for anything that isn’t a monthly payment.

We have two savings accounts - one for general saving and one for holidays. Money goes into these on pay day. We have a joint account for the monthly household expenditure and each pay our share into that on pay day.

After those payments are done, whatever’s left can be for personal expenditure. We never use credit cards except sometimes where it makes sense for the payment protection (e.g. paying for big ticket items), but the card is always paid straight off in that case.

I’ve always found Asda surprisingly expensive btw, especially for fresh fruit and veg. I think they play on their budget image but it doesn’t translate into reality. I find Lidl and Aldi much better value (and quality).

It sounds like you’re doing amazingly well OP!

I’ve recently become a bit of a budget addict. I’m not perfect but I’m doing so so much better than I used to. Previously we spent every penny we had every month and didn’t plan for future purchases and this became a cycle that meant we ended up in debt for big things like holidays and insurance.

I have a spreadsheet that lists our income at the top then all bills come off this amount THEN a 12th of things like car insurance, MOT cost for next year plus a set amount per month for clothes (which I’m considering increasing), holidays, fuel, food shopping, entertainment and all kid’s activities.

This shows me how much we truly have available every month after we’ve paid for everything and planned for big purchases.

Changing my ways and doing this has meant I have been able to pay back hundreds extra to my credit card every month and I now have a plan to get it paid off by the end of the year AND we’re able to save money for things we still need to pay for for our wedding this year.

Before I’d have said there’s no way we can put money aside now for next years insurance etc but we do and knowing that come renewal time we’ll just be able to pay that is such a good feeling.

Monzo has been an absolute life changer for me. I have all my pots for the savings I’ve mentioned above and a pot for food and fuel etc that I sort out on payday (ridiculous how much I enjoy it) then the money is there when we need it.

I’m by no means perfect yet but I’m getting there! Good luck OP.

Even Christmas is half paid for this year already and usually we’d have just used November wages for that.

Once you’ve added up everything you spend on bills and worked out how much “spending money” you have. I recommend putting that money onto a Monzo or Revolut card and only taking that out with you. You do have to be strict with yourself though and acknowledge that when it’s gone it’s gone and you can’t keep dipping into other pots.