Review my budget please

[Huggey]

I'm terrible with money! Really need to start saving -recent unexpected costs have taken all savings.
We should live reasonably comfortably?
+Monthly amount in is £2.3K
-Mortgage £765
-Bills £400
-Credit card £100
Leaves £1K a month to live on -1a and 2c.
I try and budget 80 a week for all food shopping, household and toiletries etc.
The childrens activities are £84 a month.
We should then have 600 over.
It just goes! Though I have no childcare expenses now.
Car expenses, days out, clothles and shoes etc.
I want to save for emergencies. Holidays. Christmas and birthdays. To move house. To support the children when older through Uni etc.
How can I budget better please? Every month there's unexpected spend!

I would bet actual cash that your recent unexpected costs weren’t totally unexpected

Or rather… shouldn’t have been!

Most people get that a budget is a list of income and outgoings. But a lot fall at properly thinking about outgoings. Like a car tyre puncture. Sure, you can’t be expected to know that in August, you run over a nail. But what you do know is that if you’re a car owner, in any given year there’s a chance you’ll do it. And if you don’t… that’ll be the year the microwave gives up.

Write down all the obvious expenses.
Then, go back through 6 months of back statements - if you have only banking and are happy with excel that’s not going to take long. If you’re own and paper… buy a large bar of chocolate and settle in for the afternoon!

Categorise EVERYTHING.

The good thing about looking back is that if you’re only ink what you spend going forward, you’ll keep missing the same things you always miss.

Your “emergency” savings aren’t for things like car tyre punctures. That’s your “car maintenance” or “all things running costs” budget. It’s only truly emergency savings if you’ve accounted for everything else. By looking back at what you’ve spent, you’ll know what you can expect to keep spending on average.

You say that you try to budget £80 a week for supermarket… “try”?
This is the exercise that will reveal to you that the main shop is £5 so that’s £20+ gone but £85 is so close that to don’t feel you’re over. And then you see that every other week there’s a little top up of £10. So actually your £80 budget is ALWAYS a £90 spend.

Harder if you do a lot of cash spending. But even then, let yourself be shocked if you find you average out (say) £100 a month in cash that you simply can’t account for now. It’ll encourage you to account for it this month

The key to a successful budget is having realistic numbers. MoneySavingExpert is brilliant for advice, including what you may have forgotten to account for!

Thanks @Cocomarine . I'm going to do that this week!

Agree that you need to think separately about annual and irregular expenses that will/are likely to occur sooner or later vs savings for genuine emergencies like loss of income.

What is the £100 pm for the credit card? If you are paying interest on this, have a look at a balance transfer offer so you can repay it interest free.

It's good to use a credit card for some of your normal spending but only if you pay it off in full every month. Also useful for things like car hire and for purchase protection, eg we got the cost of expensive flights booked at short notice refunded when Monarch went bust 2 days before we were due to fly with them.

You need to split out the cost of your bills and reduce the cost of those which you can (gas, electricity, broadband, TV packages). Also look at your last few month's spending to see what the money that 'just goes' actually goes on.

Some of these will be your 'unexpected' costs, which are not unexpected at all, eg cars, pets, household items and children need money spending on them from time to time, so you need to include provision in your budget.

The other thing that can cost a lot of money is food and drink out of the house, which almost always costs far more than the same food from home and can be easy to reduce the cost significantly, eg packed lunches, coffee from home, picnics on days out. Saves queuing for ages at busy attractions too.

For all things budgeting, look at Moneysaving expert. Start with the Money Makeover:

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

Also get the weekly email for ongoing tips on staying on track and being better with money.

If you want to save the best thing to do is to take a set amount out before you start spending and put it into a seperate account. You can have two accounts - one for emergencies, and one for savings. It doesn't matter if you start with a small amount, you can always increase it once you get used to spending a set amount each month.

budget planner

I can see someone else has already posted a link to Moneysaving expert. I’ve posted the link to the budget planner. Out all your expenditure in it. I remember when I first did iti was surprised how much things like haircuts cost - it soon mounts up.

Then set up a second bank account, or have a tin, and put money in each week or month. If you spend £50 every each month on haircuts for you and dc, then you will need to put £25 aside for this each month. School uniforms and shoes can cost £200 each year, for example, so you will need to save another £20 per month for these. Put another £50 per month for Christmas, birthdays and holidays (£150) and that’s nearly £200 a month you need to put aside each month already. However, if you get into the habit of doing this, you will have the money upfront, rather than playing catch-up all the time.

Yes to separate accounts. One for your direct debits, one for savings, maybe one for food, travel and other essentials and finally, one for discretionary expenses, which it sounds like is the one that you want to control/limit the amount spent.

So if you're at risk of thinking 'have money, will spend' it may help to limit the amount of money for free spending to one account, on an 'when it's gone, it's gone' basis.

Also look at the Moneysavingexpert demotivator tool, which adds up how much the 'it's only a couple of quid' over a month/year/decade if you do it regularly.

Hi @Huggey,

The problem you're having is so common! I hope you are not feeling bad. You have a great start with your budget, your numbers are promising and positive but it seems you are missing automation, control, and a clear plan.

Start by creating a financial plan - this is basically a long-term budget. A budget will help you plan out only ONE month, but with a financial plan, you will be much more motivated and know where you are going for the 12 months!

Set up automations once you know how much you can save etc. So if your financial plan says you can save £x per month, set up standing orders with your bank to pay this into a separate bank account (that you cannot touch), literally the day after payday.

Finally, self-control! This can only be achieved if you know exactly what you want, and believe you can get it. You mentioned being terrible at money, STOP SAYING THAT, as you are likely believing it... therefore will act as though you are. Find the self-belief (self-efficacy), that you can and will achieve all that you have mentioned.

Believe in the plan you create.

I wish you luck, and feel free to message me if you'd like more help!

Separate accounts all the way for me. I save for Xmas and bday every month, car MOT etc I save monthly. I have a holiday fund, and another account for later dated direct debits. I’ve recently started adding £400 to tesco card that’s new, so can load it on and spend that. Limited expected costs

You have to drill down into your expenses to identify what exactly it is that costs so much.
Supermarket spends - people normally buy the same things every shop. If you meal plan there shouldn't be any waste. Are you making a lot of impulse buys?
Clothes/shows : should not be une

Great advice thank you all. We now have no money left over as have split the remainder up into the various costs we'll need over the year. (Will most likely open a few accounts so that it can go into each separately). My biggest downfalls are extra trips to tesco express/not wanting to cook so dinner out/Amazon! (Though seeing the next year in black and white and what we could have instead, hoping keeps us ontrack).

Have you tried a Munzo account

You need to split your money further - petrol, days out etc so you know where you stand

You also need to keep a check of your account on line -

Have a bills account and ‘over pay’ into the pot.
Have a fun account and plan how to use it

Don’t be tempted by online offers or Tesco offers - you can do this

If you're at risk of expensive solutions to not being arsed to cook, have a think about what you would have if it was in the house and buy that as part of your normal grocery shop.

If you can go out, you can put something easy in the oven or do something really quick and easy, so buy that instead of ambitious things that you won't make.

Eg nice fresh or frozen pizza, nice ready made fish cakes with bagged salad and cherry tomatoes, fresh or frozen ready made risotto or paella, M&S ready meals - the £10 gastro pub meal is really nice and often enough food for more than one meal, baked potatoes, eggs or beans on toast, etc etc.

Limit your eating out/takeaways to an affordable amount of once a week/fortnight/month etc and look at the difference in what it costs,
eg if we go out for nice pizza and even one drink each, it's around £30. Or you can probably get a couple of pizzas and a bottle of wine to have at home for around £10 = £20 lower spend. Do that sort of thing most of the time, and you'll slash your spending in this area.

What you’re doing feels really tough at first but honestly you will soon be loving seeing those amounts build up. I’m sitting here feeling quite pleased with myself that I have £900 in my ‘Christmas Pot’ and it’s not even a thought every month to save that. Previously we’d have just used the whole of November’s wage on Christmas and be left with nothing else. We have Monzo pots for many many different expenses. The first few months in that crossover period can be tricky but it’s completely changed our finances.

You list is rounded up figures and vague, this adds to your accounting problem

List your regular monthly outgoings

Council tax and is it paid over 10 months or 12? Yearly divided by 12
Water
Electric
Gas
Tv licence yearly amount divided by 12
Internet provider
Phone bill
After school activities
Mortgage
House insurance - yearly divided by 12
Car insurance - yearly divided by 12
Car MOT -yearly divided by 12
Car service - yearly divided by 12
Fuel monthly amount

Then put aside £25 per person for food & household shopping

Credit card amount

Then however much is left over put into savings - save all of it as you can get back out any emergency money

Then keep track of what you spend extra for a month - or think about not spending for a month and see how it goes