Is this realistic?

[tomsmom80]

Hi

I am a single mum to 1 ds aged 7. I work full time in a good job but I do need to organise my finances better in the new year. Next year I want to focus on paying off some debt that I have accrued. I have been putting together a budget and would be keen on your thoughts -

So... after I have paid my mortgage, household bills, all essential direct debits and travel costs, I am left with £1830 per month.

I need to divide this money for food, debt payment and things for me and ds such as clothing and haircuts etc. I was thinking

£375 - CC debt ( this would be a big overpayment - it's 0% for 24 months)
£300 - Family loan. There is no pressure for this but I want to start clearing it. it will take 9 months
£280 for food
£100 - clothes, haircuts, stuff for ds
£150 - 'me money', although this feels indulgent and will not be a priority
£150 - savings for emergencies

Total - £1355

This would leave £475 of unallocated money. I want to save for a new car so I will stash some of this away. I only want something second hand for a few grand.

Does this look realistic? This will be from January

How quickly will the credit card be paid off?

I would add in some more categories to your budget for things like car tax, days out, Christmas and birthdays. Those are the sorts of things that will disrupt your carefully planned budget. Basically add a lot more detail.

For instance I know we love a day out and there's no way I want to have to not go on one or go out with friends because I couldn't afford tickets that month etc. So I allocate a chunk of money for that every month. My travel budget is calculated to cover petrol, train fares for whatever commuting I need to do that month, and extra for unexpected journeys such as needing to get the bus home from town unexpectedly.

I allocate myself £200/m for my own spends.

At the end of every month I check what I didn't spend of my allocated amount and sweep into savings. For instance I somehow managed to underspend on food by £100/m, so I put it into savings before topping up the bank account I use for food with the next month's budget.

Also work out what you are going to do with the money currently allocated for debt repayment when the debt has been repaid, and then actually do what you planned with it!

Also, thinking about your £475 unallocated I like the concept of "give every pound a job" - I find that if I have unallocated income it just gets spent, but if I put it in a named pot it somehow stays there. Monzo is great for creating pots for each category, I think starling you can do the same. So when I have unallocated funds I put it into different pots eg a bit more into my Christmas pot, or a head start on the pot for holiday spending money.

Thank you. All of my travel costs are in my main 'essential outgoings', and I also save £50 a month with Park Christmas savings that is also in my budget.

How much do have in savings at present? If none or very little, I would be aiming to build a 3-month salary emergency buffer in an easy access savings account before all else. You never know what is around the corner, and this will improve your financial robustness substantially. Likewise with ensuring you have adequate life insurance in place (and a Will). These are absolute essentials for a single parent.

After that, your plans look fine!

I wouldn’t want debts hanging over me, especially with mortgage rates rising.

id be using the £150 pocket money to pay my CC making that £525, get rid of the debt before zero interest finishes

and the £475, I’d use £400 to add to the family debt to pay off earlier. Then leave £75 pocket money.

when the debts have gone you can save £1000 a month for 6 months and get a different car

there are some great regular savers with Lloyds you can save £250 a month and get 4.5 interest but still have access to your money