Budgeting help

[ToastandJammy]

Hello

I am hoping for some help and advice.

My DH and I earn good money for where we live. We have a nice 4 bed house and are able to afford a holiday abroad each year. We certainly don't have a massive amount of disposable income but are fortunate and don't struggle either.

When we get paid, a set amount of each of our wages goes into a bills account. All our bills come out of this account with the exception of petrol and food shopping.

This leaves us with our spending money in our current account. Which we absolutely blow through by the middle of the month. I need some advice on how to control this. We save a little bit but I think we could save more. If I put more into savings then I tend to get it back out before the end of the month!

Any help or advice would be appreciated.

Remember that some savings will be needed for annual and irregular essentials (insurances, Christmas and other gifts/celebrations, broken cars, pets, washing machines etc).

It can be helpful to think of them as 'delayed expenditure' rather than savings that would be put away and not touched unless you needed to cover loss of income, new car, major work on the house etc.

It could well be that you need to put away hundreds of pounds a month to cover expenditure other than regular bills, food and petrol, before you get to the amount that you expect to build up as savings without being touched.

Have a look at the Moneysavingexpert Money Makeover some time over the Christmas holidays if you have some time, do everything that's relevant to you and that might put you in a position to be financially better off in 2021.

As above, big annual spends like Christmas and birthday need spread out saving.

Track your spending, dull but it works, everything you spend for a month. Both of you, there are apps or take photos of receipts whatever works.

See where the money is going.

I,useless with stuff like this, tracked my spending for a year. And saved up £10k on top of what I was already saving.

I was just spending money on crap and forgetting about things like saving for holidays and spending.

It made me think twice about buying a new top, and go8ng to look at what was in my wardrobe instead...

Thanks both! I do save for Christmas separately and usually if we've got a holiday booked I pay it off monthly when we get paid so we just chip away at it.

I have got some savings but I find it hard to save any extra. I think I need to send it to an account I don't access via an app! That's the danger.

In terms of tracking the spending, how do you do this? Do you just make a note of what you are buying and then it makes you think twice etc?

I don't track spending. We're fortunate to have very low outgoings and I just don't want very much so anything I do want, I can easily afford.

I never think 'I have money, what can I buy' so the money just sits in various accounts until I see something I want to buy. There is no connection between having money and spending it, in my mind.

One tip I've seen a lot is to put savings away when you get paid, rather than saving what you have left at the end of the month, so that might help, if you see money sitting in your current account as 'money that has to be spent' But then you'll have less money in your current account, and it will just run out faster.

It's probably worth analysing your spending to see what you actually spend your money on, and then concentrate on cutting down in that area or finding cheaper alternatives.

For example, if you spend a lot on eating out, lunches, coffees, takeaways or similar, you might want to work on doing that less often, or looking for cheaper alternatives, like supermarket meal deals rather than takeaways, that can be much cheaper for similar food. If you buy lots of coffees, Greggs or McDonalds are much cheaper than Costa, Starbucks etc, or you could buy a machine to make it at home for much less.

One thing we have done that has stopped the "too much month at the end of the money" moments is to give ourselves a strict weekly budget. We list all our bills, DDs and SOs (including savings but NOT including food shop or travel costs) and then work out what we have left over after that. Then we set a weekly budget (for us this is about £125) and that gets paid to our seperate spending account every Monday morning. That £125 is the only money we are allowed to spend until the following Monday and covers the food shop, top ups, travel costs for work and treats. Its quite a strict budget but we have whittled our food shop costs down by meal planning and eating less meat, and as another poster said, you really think about what you are spending and if its a want or a need.

We've been able to save a few hundred more per month doing this, whereas that money usually would have been gone with nothing to show for it. We're not perfect and do sometimes have to dip into the main account where the money remains until the new month, but it is painful to do so I try to avoid it 😁

My 2021 money resolution is to send regular amounts from the extra savings to our Christmas/Birthday/Clothing pots so I feel less guilty about spending money on these things as I know the money is already assigned to those costs.

We have a zero based budget, I start each month with 0 balance so any money left over from previous month is put away. As there's little interest? We have been buying premium bonds for easy access should we need.

Budget/ assign money to:
House + Bills
Living (Food + Car + Insurance)
Saving
Holiday
Fun (meals/ days out)
Gifts (birthdays / misc)

At the end of the month we look at actual vs budgeted. We used to look at our money in the current account and think oooo there's money, what can we buy... now we know each pound have a purpose. We look at money differently!

Good Luck with your saving journey

Can you treat savings like paying another bill? So, say 10% or so into Premium Bonds? If it's a percentage then when you get pay rises, the savings will increase proportionally.