Anyone bored and care to critique my budget?

[Deckthis]

Like many people I’m noticing my money is being increasingly squeezed each month and I’d like to see if I should be organising my spending differently. I’m 52, a lone parent with one teen, and I earn £50k pa which equals £2970 a month.

I’m currently paying 5% into a work pension scheme, and £100 a month into a small separate pension.

My ex-h pays sporadic maintenance of £500pm - with it, things are pretty comfortable. Without it, it’s very tight.

Car loan £144 (4 yrs to go)
Critical illness, income protection and LI £159
Mortgage £1038
Mortgage overpayment £100
Council tax £125
Gas/electricity £90
Pension payment £100
dental insurance £19
national trust £6
Netflix £6
TV and Broadband £30
Spotify family £14
Savings for son £40
Mobile sim only £10
car insurance £31
Son mobile sim £10
MBNA £25
iPhone payment £15 bought 2ndhand

Then:

£600 spend @ £150 pw. This goes on extra grocery top ups, extra petrol when needed, weekend days out, the odd meal out etc.
£260 food @ £65 pw
After school care £140
Petrol @ £150
School lunches £20
Plus Various savings pots for car service, Xmas, son clubs etc @ £100

I have an MBNA credit card debt which I need to tackle. And I have about £4.5k in savings.
pensions are virtually non-existent as I’ve only just started earning reasonable money ☹️
The big issue seems to be my big mortgage, and big outgoings.

Pension payment £100 - can you pay this direct from your salary? Salary sacrifice or is it a seperate non workplace pension?

Does your work place offer critical illness protection?

Why are you over paying mortgage? Not saying you shouldn't.

What would you like to do? Which of these pots would you ideally like to reduce? Obviously things like insurance are entirely dependent on your personal circs and needs - so people can’t come in and recommend you reduce to a lower premium insurance or stop the dental insurance or whatever because surely it’s something you’ve decided is right and needed for you.

so which of these categories are you open to rethinking? Then folk can advise in a way that’s relevant.

Oh sorry see you mentioned the pension. Can you salary sacrifice £100 into that rather than pay it separately

Go through CMS so that exH has to pay maintenance regularly rather than sporadically?

The thing that jumps out is why you need childcare for a teen (understandable if they have SN, for example) and whether on the flipside the teen is old enough to get a job :)

Other than that the main thing you can do is look at your discretionary spending (National Trust/Spotify/Netflix etc plus the £600 a month that is unassigned) and see if you can cut that down or prioritise.

If you've got savings then I'd clear the credit card debt. It'll work out better overall, no interest etc. Then keep the CC incase of emergency.

Mortgage overpayment - is that necessary? Maybe look at paying off your credit card instead, I'm sure the interest will be higher on the card.

I am in a very similar situation to you with a similar income. I wonder whether there is room for saving on the £150 per week spend? That's quite a bit to be spending on top-ups and treats.
I aim for £500 per month for all groceries, treats, days out etc. I admit that I do frequently need to top this up but that's what I'm aiming for. I love meals out, coffee and cake etc but I've noticed what a toll it takes on my spending so have tried to make these more of an occasional treat.

Is there no way to ensure your ex pays CM more regularly, CMS? Or is he a self-employed maintenance dodger? Your expenses are pretty high TBH, your list added up to near enough £3500 (so even in a month in which your ex does pay the maintenance you are only just within your means) by my calculation and that's before contributing to the pots for Xmas, birthdays and so on so in a month he doesn't pay you must be struggling for food/bills and you will have to dip into savings to pay the latter?

The things that stand out to me - after school care, does your teen def still need this or can they get themselves home after school and let themselves in?

The £25 credit card repayment, is that the minimum repayment or on a standing order (switch to the latter if so), and try really hard not to put any more on that as it will be costing you £££.

Mortgage over-payment/savings for son, I'm not sure as things stand you can afford this, and even if you can save something usually the advice is to pay off non-mortgage debts first, then build your emergency pot, then look at higher interest savings vehicles such as pensions and ISAs and only then to overpay unless your mortgage interest rate is particularly high or if you are coming up to remortgage and it will tip you into a lower LTV thus a much lower interest rate? I think I would save that money myself as a buffer against months your ex doesn't cough up, then start putting any spare money towards the credit card debt unless that's 0% indefinitely.

You have quite a few subscriptions which could potentially be cut, I know you don't want to suck all joy out of life but could you use free spotify and cut the national trust membership for instance? Your £150 pw 'discretionary/days out' pot is the other area you can probably cut down, I would try and avoid top-up shops if you can by meal planning and shopping efficiently, when I first starting living frugally this was the first thing I noted, how much I frittered away at the local shops by popping in for bread, milk, fresh fruit etc and ended up spending £10-£20 a time. Now I meal plan ruthlessly, always have a loaf of sliced bread and an 'emergency' bottle of milk in the freezer, buy a few tins of fruit and veg or frozen in my main shop so no need to buy fresh and reduce snacking and 'treats' to what I buy in the main shop and once it's gone it's gone, good for the waist line too! You can also look at cheap local day outs, if you do keep your national trust membership use that as much as you can, do a picnic on the beach or in the local park rather than eating out or whatever.

The petrol, car loan and insurance I'm assuming are essential to get to work? No chance of public transport, or moving somewhere closer to work/school?

Otherwise you are right, your mortgage is very big but hopefully when your son is grown, so in the next 10 years you might be able to downsize to a smaller house/flat and use the equity for your pension?

I'd use the mortgage overpayment to clear the credit card faster.

Childcare for teen?? Can that get cut back?

The 150 a week top up food/petrol/treats could be cut. Or is definitely worth looking into.

Equally, does Son need a savings account when I can't see you adding to your savings at any point in that budget.

I dont know about some of those.
And maybe it is too late now. But we dont buy cars unless they are old and inexpensive.

Haing said that, the last car we bought was prob about 10 years ago, so things may have changed since.

Is your gas and electricity currently on a fixed rate? If so, when from and when does it end? This could easily double by the end of the year, depending on circumstances.

Not what you want to hear I’m sure, but I would really try to increase your pension payments if you can. Does your work allow you to pay more through your work scheme? You’ll get tax relief on it to soften the blow slightly.

I’d cancel the mortgage overpayment.

Does your teen need childcare?

I'd cut to the basics until the financial landscape improves .

Cut back on savings for son and various pots but not pensions
Afterschool club for a teenager ?
Netflix etc can go
Do you need dental insurance
I'd take life cover only not critical illness
Your £600 items add up to more than £600 they are £670
£150 for petrol , is there an option to WFH a couple of days a week
Lastly that's an expensive mortgage relative to your take home pay .

Firstly cut up your credit card - what is the interest rate? If high pay it down with savings. Secondly look at things like Spotify - they now have a new duo for two people for instance. Do you need after school care?

For the future, dont buy phones on credit, buy outright, cheap phone if needed

I also would prioritise clearing credit card before building up savings - the card then becomes available for emergencies. And, as someone said above, check terms of employers pension to see if any critical illness etc provided just in case.

Your gas/elec looks low (thinking of current price rises, I don't mean its a negligible amount in itself) - would you need to budget more for oct / winter?

I think in your circs I would be focusing on the big amounts - double checking if any mortgage rate switch is worth it, for example (for immediate saving or to guard against rate rise).

Since I became a sole income household I find I need to operate really detailed buckets to see where the money goes clearly enough. (My budget has about 6o lines). Not everyone's cup of tea but it really paid off for me. I use ynab which isn't free but its been a lifesaver financially. It might be worth tracking the 150pw really closely for a month as that's a large enough amount to show patterns.

How big is the Credit Card debt and what's the interest rate? I'd be prioritising clearing this and the car loan before overpaying mortgage.

I can't see water and sewerage; MOT and servicing; buildings and contents insurance; do you have pet expenses?

Do the mortgage overpayment and son's savings need to be paid monthly? Can you put the amount to one side in case you need it for something else and then review, say every 6 months, to see whether you can afford to use some of it for an overpayment or into his savings?

I also would prioritise clearing credit card before building up savings - the card then becomes available for emergencies. And, as someone said above, check terms of employers pension to see if any critical illness etc provided just in case.

I agree with this. I never understand why people prioritise savings over paying off debt. It makes no sense to me. I would use your savings to pay off the credit card. Then you can rebuild your savings with the money you are no longer using to pay off the credit card.

I hate to say it, but by meal planning, you will probably save a lot on food top-up shops. I know it's a hassle though.

Sorry but another asking if childcare is necessary for a teen?

You have not included home insurance in your calculations

I also have car breakdown/recovery, which has saved me money in a few sticky situations

I agree that you would probably be better off;

Paying off credit card in full - the debt
Then pay it off every month

Contact CMS for regular child maintenance

Pay into one pension & find out if your employer contributes & check the tax relief. Investigate joining both pensions together if possible?

Critical illness, income protection and LI £159 This seems very expensive, do you need what it pays you? No workplace provision via your pension? Have you shopped around?

Gas/electricity £90 This seems quite low, you should prepare for this to increase over the next few months

MBNA £25 If this is not already on a 0% offer, have a look on Moneysaving Expert to see if you can transfer to an interest free offer (preferably also fee free) and set up a standing order for at least £1 above the current minimum payment, to remove the minimum payment marker from your account. If you don't pay the card off after the interest free period, make sure you transfer it again.

£600 spend @ £150 pw. This goes on extra grocery top ups, extra petrol when needed, weekend days out, the odd meal out etc £600 pm isn't quite £150 per week so just be mindful of this. Do you actually spend all this money, or could you cut it down? Do you find yourself spending it 'because it's there'?

School lunches £20 Is this a lunch every day? If so, it seems quite cheap, but if it's only some of his lunches, how much is it per day and is it good value as in is he getting a decent meal or is it just paying cafeteria prices for sandwiches etc that he could take from home for less?

Plus Various savings pots for car service, Xmas, son clubs etc @ £100 How much is in the pots? If it's plenty, you could divert some to overpaying car finance, credit card or mortgage, in order of decreasing interest rate.