What do you earn? What do you spend? What do you save?

[Mimiandme]

I’ve just gone through our finances and with everything going up I want to try and act now to get my arse into gear, cut back where I can and save more. My husband thinks that with our wages that it’s just not possible. I don’t think our wages are that and I don’t think our outgoings are that high, I think we over spend and just don’t realise where we are sounding. It’s all £20.00 here, £30 there… mostly take out and eating out.

I work part time after having our little one but my husband works full time. Together after tax we have an income of around £3300. We made quite a bit of money on our last house having bought it before house prices went up. We moved to our family home which we have no plans on moving from as won’t outgrow it and have a mortgage of £120k, which I think it a small mortgage, we are both almost at mid thirties. After all our outgoings bills and food (the must haves) we are left with around £1000 a month between us but at the end of every month we are both in our overdrafts. I think £1000 left over is a lot of money but it just goes. I don’t think we live a lavish life style. We don’t have cars on finance, no credit cards, loans etc. Out of that £1000 we do buy petrol, take out, meals out, having hair done, family days out? Where are we going wrong? We don’t really set a budget and I think that’s part of the problem. I’ve recently looked at doing YNAB but I’m put off by the subscription cost? My husband thinks it’s impossible to save and ‘that’s just the way it is’ but I disagree. I want to save more, I want to be in a good position in the future and I want to be comfortable and not be in my overdraft at the end of the month! Curious to know what others do… sorry for being nosy, I just need a nudge and to know I’m not being unrealistic… I don’t think I am…?

A no spend January is a good idea. Could save enough pay off your overdrafts and break the spending cycle.

After bills we allocate a set amount for food shopping then both put £50 each into savings this is to cover relatives birthdays, car repairs and some of Christmas. We then have a set amount each to spend each month but we both tend to save some of that. I also plan for upcoming things and note it in my phone so if I have £130 a week for personal spend it’ll look like this
£30 petrol my car
£5 collection at work
£20 child’s shoes (share cost with husband)
£5 sandwich at work
£10 child school trip (my half)

so I can see I’ve got £60 left to myself,
I’ll save £20 for a medium term goal like paying my half for my child’s birthday
£40 left

probably complicated way of doing it but works for me!

Budget, budget, budget.
nothing gets spent without nit being recorded on a spreadsheet and ina category.
our income is similar enough to yours and we save £1000 a month. No mortgage helps.
our takeaway budget is £20 a month. We often get the dine in from the supermarket in this budget section, so one one month and two the next.

have I said you need to budget ?

Very similar to what I do!
Try and predict costs in advance as some months more expensive than others for example

I suspect that some of your ‘essentials’ can be cut back too. If you are paying more than £8 a month for a mobile phone then you are overspending. If you have Sky/Netflix/Prime/Spotify then all of these can be reduced or cut out. If you don’t shop round for car insurance you are miss out on savings.

So when you do your review, be brutal with yourself about needs and wants.

I am not saying that you can’t spend money on subscriptions or a fancy phone, but be aware they are wants not needs and you have to cut back elsewhere on things you might prefer (e.g. paying off the mortgage or having a holiday) or get into debt to have them. That might help focus your thinking.

We take home about about £4k a month and save £500 pm into long term savings.

The most important thing for us is to save it first - so it's listed as a household expense next to all our other bills and just never figures in our disposable amount iyswim.

We use Monzo and we have other savings pots that we contribute to for birthdays, Christmas and holidays of about £500 a month too - but they are more budgeting tools, to spread these expenses over the year and the pots get emptied regularly as needed, so it's not really 'savings'.

As for a budget, I could never be arsed to keep receipts and write down every little thing we spend - but we take money out at the beginning of every week for food and petrol and once that's gone, we're skint until the following Monday. Sometimes we're reckless and waste it on a meal out or takeaways - and we both know that means we're on lentil stew and bean chilli for the rest of the week as that's what we always have in store cupboard stocks 😂. But we find it's a good way to keep us in check and the following Monday, it all resets, we get our next weekly money from a Monzo pot and make better choices that week!

50:30:20 is another way of looking at your finances. Using this ratio, 50% of take home pay on ‘Needs’; 30% on ‘wants’ and 20% on ‘Savings’. I found it useful to work this out as it gave me an idea which area we needed to increase/decrease. So that our Needs (the non-discretionary stuff) was about 50% but we needed to double our savings to get to 20%, by decreasing our discretionary spending - your takeaways etc. It’s very simple and obvious but made me think if I’d done this years ago, we’d be in a much better financial position now. The 20% is put into savings on payday, treat it like a direct debit. If you work out the sum you might save per year, it can be a great incentive.

😄 I always think I’m a bit strange for having all these little systems!
As well as the money we save that comes out before we get our set amount, I try to save as much as I can and budget for things.
E.g.
January - save for Feb half term
February - save for Easter holiday
March & April - save for child’s birthday
May, June, July - save for summer holidays
August - no chance of saving!
September & October - save for child’s birthday
November - save extra for Christmas
December - no chance of saving!

I work shifts, I get the ravenous hunger and/or too tired to cook, plus feeling you deserve a treat. I'd say embrace it and manage it:

Start cooking things for your DC that can keep for you and OH to eat later, or at least have some elements that work. So anything like bolognese you could cook for the 3 of you and reheat later, or reheat just the bolognese and cook fresh pasta. Same with curry, other mince based dishes, pasta bakes, salads, soups etc. You could consider getting a Charlie Bigham meal for two to have on hand each week. They are expensive but I would think still cheaper than the takeaways?

In terms of desserts, if you know you're going to want them don't fight it. Make/bake and freeze, would be a nice activity with your DC and a microwaved frozen brownie is delicious! If you don't have freezer space or need maximum convenience, invest in some decent mug cake mixes - I like the ghiradelli ones from the chocolate emporium as a luxury option.

For now at least I would accept the need for some convenience and just look to lower the cost, you can move to eliminate it entirely down the line. Plus, allow yourself to still have the takeaway, just not so often. Chances are you'll enjoy it more!

It's kind of counterintuitive in some ways, because you could make much bigger savings but I think smaller steps are easier.

Calculate how much you spent on takeaways etc the previous month. Next pay day, transfer that amount into a savings account. Whatever is leftover after bills and savings is what you have to spend for treats etc.

I set up several standing orders of £100 each month for premium bonds, savings, ISA and private pension.

www.moneysavingexpert.com/banking/budget-planning/

You need to meal plan, use a slow cooker or save your DD’s food and reheat for your DH.

We have a very high income and I bet we get a takeaway 3 or 4 times a year. I prioritise experiences, holidays, pension, savings.

You need to decide your priorities are. I used to see my spending as parts of a holiday

• if I take a flask of coffee, I can save towards my holiday.

• if I have a reheated curry I can save £40 towards my holiday

Its not going without, it’s redistributing.

"It's not going without, it's redistributing."

Love this way of putting it,@Sunsetintheeast - I always tell myself it's about being intentional and discerning. With time and a system, you can afford most things, but not everything. You're so right - it's not deprivation, but rather consciously choosing priorities.

@SuperPup86 We do things a very similar way! I find it much easier to manage my money weekly so every Wednesday we move a certain amount of spending money in to our shared Revolut account and once it's gone it's gone until the following Wednesday.

Your figures are very similar to ours. We bring home just shy of £3k a month and after bills and food/petrol we have around £1000 left which we split equally. I usually save £200, DH is usually close to zero before the end of the month. Not even sure what he spends it on cos I'm more prone to get a coffee than he is. Different mindsets I suppose. Oh and we put away £200 into savings as part of the bills and £50 into a savings account for DD too.

We used to get a takeaway every Friday night but have reined it in a bit in the last 6 months since the energy bills started to go up. If we get a takeaway now it's more likely to be a chippy for £15 rather than a fancy Japanese one for £35. Even doing that 4 times a month is a £80 saving so it all adds up.

I pay into my company pension

I pay my bills

I save every month

Then I spend

Your food eating and takeaways is silly. Why are you not prepping food for all 4 of you? Make a spag Bol, chilli, lasagne, curry, sausages and mash, pie and steamed veg, whatever, and then Dh heats it up when he comes in.

I’m going to share about habits rather than what we earn. I used to have similar issues to you. I learned the YNAB approach which is to give every pound a job, not just tot things up afterwards. I made a spreadsheet with a budget for each month. And then I wrote down every single thing I spent as soon as I spent it.

I have now stopped logging my spending because I am in better habits and don’t need to. I still have the spreadsheet with my monthly budget however.

When I get paid, money goes out by standing order to the joint account for all our joint bills, and to various savings accounts. I use easy access savings to ensure we have money for sporadic and unexpected expenses - knowing it’s easily accessible makes it easier to feel ok about putting it away. The way we have things set up, DH puts a bit more than me in the joint account and I put more in savings (I’m the higher earner) just to minimise how much we move money around. DH also has separate savings for his tax bill as he’s self employed.

So I put money in savings first, not just what’s left at the end of the month. And then I check my bank balance every day, keep an eye on what I spend and really think about what I need. I’m in better habits - I don’t just mindlessly buy little treats all the time, I actually think about how I want to use the small amount of spending money I leave in my account.

So to summarise: save first, and then really think about what you spend. It doesn’t ‘just go’ unless you’re sticking your head in the sand.

I’m much happier now!

I think 30% is too high for wants and 20% is too low for savings.

And the reason I’m posting this is not to be smug but to show that your habits really can change - I’m a reformed overspender, I used to waste all my money!

Monzo bank app has pots you can allocate for different things, eg family days out, treats, might be worth looking at.

@planefullofotters That is great advice and it's pretty similar to how we organise our finances now (I too used to be the big spender)! The 'give every pound a job' really works if it's always at the back of your mind.

NC for this. We have also noticed that our usual expenditures are costing more than I had budgeted last year, and we ended up in the red over Christmas, so we are planning to be more careful this year. We do have an emergency fund, but try to live within our means and continue saving without dipping into the emergency pot if we can help it.

We have 3 older primary age children.

Our monthly income is about 11.5k after tax, and our breakdown is as follows:

Needs/fixed expenses: 5400 (mortgage, council tax, assorted insurances, gas and electric, phones and internet/streaming services, car maintenance and petrol, food, etc)

Wants/variable expenses: 2500 (travel, Christmas and birthdays, clothes beyond necessities, cleaner, events and days out, extracurricular activities and clubs, camps, home improvement purchases, etc)

Giving: 1250

Savings/pensions/investments: 2350

We supplement with annual bonuses, but those aren’t a part of the budget because they are variable year to year.

Our main frivolous expense is travel, and that is what is being cut back this year.