How to manage this budget and spending

[Indie1234]

Hiya
This is my first post, I am 29 and on a new salary of 60k and living in a houseshare so rent and household bills come in at 450 a month

I also pay 3 percent into a pension and also have student loan contributions im paying back

My salary comes to 3255 a month take home but i am somehow spending all of it and more, has anyone got advice on how i can save / budget please

List your total outgoings. Then be honest and review how much you are spending on stuff you don't need.

How much do you save every month?

You need to list your fixed and variable expenses on spreadsheet so you can separate need from want. There are budget templates online.
Work out how much you could save if you cut the unnecessary spending. At the start of each month transfer this amount into your savings account (ie Pay yourself first).
Get a Monzo card or similar that allows you to set a budget for different categories and track your spending against it. Use this for day to day spending - you'll get a much better idea of where your money is disappearing to.

Firstly up your pension contributions if you can yes it’s less money in your pocket now but it’s worth it especially if your employer does matched contribution to a certain %

Do you live in a particularly expensive city
after house bills you have £2800 remaining for
commuting
food
clothes
nights out
subscriptions
write down an allocation to everything and set a budget within a budget

then put away portion into a savings account to buy a house/nest egg/ whatever

Get your purse out, go through all your receipts and write a list of every single thing you have bought.

Then ask yourself if you "really needed" £40.00 worth of toiletries, £50.00 worth of stuff from Primark, three takeaways in a week etc.

I did this and it was a shock how much money I was wasting on stuff I really don't need.

You should pay more into your pension as it's tax efficient to do so. www.thesalarycalculator.co.uk/salary.php

If you bump it up to 8%, at your wage, that will only cost you a hundred quid a month.

For the rest of it, you just have to stop going shopping.

Print 3 months worth of bank statements and grab some felt tips or highlighters. One colour for fixed expenses like rent, utilities, council tax, phone contract, car tax, insurance. Use another to highlight anything like debt repayments, credit card bills, direct debits which might be negotiable or possible to consolidate. See what's left - you may already be able to see exactly where your money's going (daily trips to Costa, buying lunch out every day, five takeaway dinners a week, pub every night for example). Then you need an honest look at how many little trips to the shops, clothes purchases, shoes, manicures, haircuts/stylings/blowouts there are on there.

Then start your spreadsheet. Put your take home salary at the top, then list your utilities and fixed outgoings (amount in one column, description on the same row in a separate cell). Depending on your direct debits and debt repayments you'll either list those next, or talk to the companies about cancelling or consolidating them. Then you need to have an honest think about how much you need to spend on groceries, clothes, haircuts per month. Add that up and see what's left from your salary.

The way I manage my money is -

1. Pensions: remove 9% at the source for my pension - employer matches with 18%. I don’t see that 9% money in my take home pay.
2. Mortgage overpayment: Remove a certain fixed hundreds of ££ into my standing order I contribute to our joint account which goes to make overpayments on our mortgage. This goes out 1st of the month along with my half of household mortgage bills and food for joint account - I don’t see that money.
3. Investments: Remove another lump sum on 1st of month by standing order to go into investments. I don’t see this money either
4. Spending money: A fixed standing order - far far less than any of the above goes into my Starling personal account. This is my small pot of spending money for the month. I see this money. It is categorised into fuel, optional extras, and I scrimp and save every penny.
5. something is left over after all this each month- this goes into easy access savings for rainy days, car repairs, sudden kids expenses, holiday savings etc. this could vary how much is saved month to month.

it begins by figuring out what standing orders you can set up to pensions/savings/house deposits/x or y - which you set for 1st of month and at source so you don’t see it really. Then work with a small “allowance for yourself” and see what you can do.

I like Martin Lewis' mantra "Will I use it; Is it worth it; Can I find it cheaper elsewhere?". I also suggest the approach of never buying something spontaneously - if you see something and think you'd like it, then give yourself 24 hours to think about it. I bet a lot of the time you'll decide you don't actually want it.

I think this www.stoozing.com/soa.php is a good list of things that you are probably spending money to make you think about where it goes.

Things I’ve changed in my personal “allowance” to myself - in order to prioritise overpayments, investing and pensions are -

1. invite friends over rather than pay babysitter for us to go out to restaurants
2. not buy lunches at work
3. get a fantastic selection of coffees teas at home and a lovely travel mug
4. Only buy clothes off vinted or eBay or marketplace
5. sell DC toys to buy next set of toys also off marketplace or eBay. Yesterday a next size bike got bought with money made from selling an outgrown garage
6. buy own brand
7. Stop online groceries and diarise time for weekly Lidl shop
8. cook differently and stretch meat out
9. use cash back sites for travel tickets etc
10. minimal cleaning products

the satisfaction this generates of saving easy access, investing, overpaying mortgage and healthy pensions and keeping eyes fixed on upsizing further in a few years is significant.

Get a Monzo account and set up pots with targets ( eg £400 for Christmas) and pots for other goals ( eg house deposit).
It's very encouraging watching the pots grow.
You need to think about what you want and save with a specific goal otherwise it's too easy to get distracted.

has anyone got advice on how i can save / budget please

Set up a direct debit to go out the day after payday to transfer money to a savings account.

You've got a very good salary and low bills. This is the time to save. I'd suggest £800 pcm.

Don't print 3 months' of statements and start highlighting everything 🤦‍♀️

Just export the statement into an excel and then sort per category. A couple of pivot tables, a few formulas in there and have your budget in half an hour.

Your spending is, to be honest, ridiculously high. Over £500/week discretionary spending? I get that it’s fun but you are right to be putting a stop to it.

Lots of good advice above but first stop for me would be save enough for you to live on for 6 months if you wanted to stop working/got made redundant and put that somewhere accessible and safe.

Review this year's statements then decide what you want or need to keep spending on.

Set yourself spending limits for different categories, try to identify areas in which you tend to overspend. Food, clothing, eating out, entertainment, health. You could start by tracking everything you spend money on. I use a simple spreadsheet and each time I spend money, I write it down on the spreadsheet, and give it a category.

You have a big income and low expenses, so you should be able to put a lot towards your future... paying off debt, pension, ISA.

First thing is to track where the money is going, as some will be going to things you need, but some will be going to things you want.

At your age (only a few years ago as I am mid 30's now). I was paying a quarter of my salary into my pension. And the rest went into a savings account ( I was saving for house not retirement). Not having the money made me live cheaply as it forced me to budget on a low income (I lived on minimum wage effectively). Now I don't need to rent and I have my own house I paid the mortgage off in 2 years and can put 50% of salary into my pension. As I haven't had the money available to spend I haven't really needed it even when it was available.

Basically by budgeting for minimum wage it makes it easy to save rather than saving whatever is left over at the end of the month.

Wow, you must really be frittering it away on crap. You need to remove the opportunity to do that as soon as the money comes in. Agree with others you should increase your pension contributions as well. Here’s what else I’d do if I was you

• set up a standing order to go into a savings account as soon as you get paid. It sounds like you want one you can’t easily access if you’re prone to spending
• set up a separate bills account your rent and bills (council tax, phone bill, utilities, subscriptions, insurance etc) comes out of
• get a Monzo for spending and use this for all treats, daily spends
• make your own lunches in big batches and freeze portions - curries and bolognese for example are good to do this with, and take portions to work instead of buying lunch
• shop in Aldi and Lidl instead of more expensive supermarkets

with that amount I’d do as follows:

3255 net pay

450 rent+bills, plus whatever else you need on top for phone bill, subscriptions etc - let’s say 650 - straight into a bills account

1000 straight into savings you can’t touch

that leaves you 1605

I’d transfer the 605 into a Monzo and use this for all other daily spends - groceries, commuting, takeaways, treats etc. you’ll soon see where it’s going.

Then you still have 1000 left in the account you get paid into - I’d be tempted to open another easy access savings and put 500 in and then leave 500 for emergencies and unexpected bills.

FWIW my net pay is 2750, my mortgage/bills/unavoidable outgoings are 1000, I then allocate 500 for all spending and save 250 and while it’s sometimes tight I don’t feel like I struggle - I’d feel pretty rich on your salary!

I don't mean to sound harsh, more trying to set down clearly what I see from your post.

What are your medium to long term goals? Buy a property, retire at X age, start a business, have a family, something else?

Because at the moment you're in a really good position to be able to achieve these goals, as you have loads of money spare after your basic costs, but instead, you're just mindlessly spending your money on 'something' that means so little to you that you don't even know what it is.

You may think you're having fun/living your best life etc etc right now, but your future self will regret the choices you're making when you can't afford to buy a property, are trapped in a job that you hate, or you're struggling with the costs of maternity leave/childcare and have no savings.

Make the Moneysaving Expert website your friend. Look at the budgeting section and get the weekly email for ongoing tips to keep you on the straight and narrow. Use the demotivator to work out the long term cost of frequent small purchases. It can be tens of thousands of pounds over a few years.

www.moneysavingexpert.com/shopping/demotivator/

If you have debts, you need to pay them off. Absolutely no reason to be in debt on your income with low basic expenses.

Open a LISA and put £1 in it. Then, once you are out of debt, put the maximum allowed amount in and the government adds more money that can be used to buy a property or retirement.

Save more money, you could probably save £1-2k pm and still have lots money left over for fun stuff/nice things. How about make a pledge to try and live on half your income. £1600 pm into savings and £1200 after your housing costs for food, travel and fun stuff, which is loads for one person.

Transfer the £1600 pm into a savings account on payday, pay your rent and only spend from what is left. If you run out, stop spending.

As far as a plan goes, have a look at: ukpersonal.finance/flowchart/

Good luck

If you're spending on 'things' eg clothes and accessories, is there anything you can sell? Things you don't wear/use or that don't fit or just don't like any more.

In a houseshare you must be quite limited on space, so having less stuff will be a benefit.

I was going to suggest monzo too. The pots are brilliant but it also shows you how much you are spending on things, groceries, eating out, transport etc. You know exactly where you're up to all the time. Give it a try, it's free.

I have the Snoop app and it tells you how much you've spent at the end of every week, with a breakdown, and how that compares to last week etc. it also gives a detailed summary at the end of the month and categorises what you've spent, ie £200 on clothes shopping, 579 on household bills etc.

It was an eye opener!

.

YNAB - you need a budget. Absolute gamechanger.

Unlike many of these spending trackers, you decide what your money is for in advance. If you don't stick to it, you have to work out how/where to move money to cover things. It's brilliant and really helps stay in control of money.

I recently downloaded a money management app called Emma which does the spreadsheet bit for you. You can import data from all bank accounts and credit cards, set budgets for catagories and seperate spends into categories. It has helped me to work out where all our money is going. It also pops up advice about things you could save on like subscriptions which you might not be using and cheaper broadband packages. If you want to try it, message me and I can give you a referral code.