What are we doing wrong?

[CindiHoZ]

Hi

Dh and I earn an ok joint income of £4500 per month take home. Despite what think are quite reasonable living costs, we are constantly running out cash before payday and I am sick of it. At the moment we pay out the following

Mortgage £574
gas and elec - £294 ( can't get this lower)
groceries - £360
C tax - £138
Internet phone and sky - £59
3 X mobile phones - £82
Water rates - £32
House insurance - £34
Car insurance X 2 - £74
Appliance insurance - £8
Car loan - £179
Buy now pay later item - £38
School money/birtthdays/days out - £150
Car repairs - £50
Emergency savings - £100

Total - £2212

This means that we should have a very healthy disposable income. But we dont. There always seems to be something that crops up. We also need to factor in costs such as holidays etc.

Does anyone else wonder where it all goes?

definately agree with YNAB it's amazing!

House insurance is £400 year? Get that down surely.

Other costs seem low: mortgage, ct!

Our take home is about £5500 at the moment, rent is £1325, ct is £180 (£2k/year), energy is £125, water £35 etc. We save £1-2k per month.

No kids though, I imagine that’s where the money goes. We only have one car, and it’s paid for outright.

House insurance is £400 year? Get that down surely.
Have you renewed recently? That's now going to be near enough the average. Our renewal has just gone up almost 20% on last years, and even ringing around, trying another broker, etc. I've only taken the new quote down by a small amount. I wish it was as low as £400.

Have you renewed recently
Mine is £120 per year.

Yeah, got quotes £200 up from £140. Shopped around got £100.

That is just contents insurance? Not a home owner.

I have got an app called Snoop and it's fantastic. I can set a proper budget with unlimited 'pots' e.g. one for travel, one for pet expenses, one for energy etc etc and I can allocate particular payments to corresponding pots, so payments to Octopus for example always come out of the energy pot. I can link my bank accounts to it so lots of it is automatic. During the month I can see where I am overspending and need to cut back. It's not a free app but it's well worth the small outlay

Another vote for tracking the annual spends and for being meticulous

car service/MOT
dentist
accountant

Well for those of us that are, £400-£500 is becoming normal for Home and Contents. Up from just over £350 last year to over £460 this year.

Another YNAB devotee, here. They have a 34 day trial. I've been a user for about eight years, it's envelope budgeting but very sophisticated software.

Sound financial management and security have very little to do with your income figures, unless you’re at subsistence level.

It’s a mindset of how you regard money itself.
Many view it like a cake that arrives each month - to be divided up and shared out for the various expenses and activities they need and want. It gets tasted and nibbled at unthinkingly because it’s there. Sometimes you’re hungrier than other other times.

But for the financially savvy, money is both a tool - one that you must learn and hone your skills in utilising wisely; and also a unique opportunity. Every time money is spent, in some sense an opportunity is lost. And so is the time you worked to earn it.
And the most pressing opportunity lost first and foremost is that of building a financial life raft for you and your family for when stormy weather heads your way.

Tracking every penny, apps and gizmos might help - but only if you have the necessary mindset. Otherwise you’ll be like a dieter sat in front of the cake at dinner time.

What are the things that 'crop up'? - Those are the things you need to be keeping track of. As others have suggested, track your expenditure for several months and see what else you are buying. Fact is that you are spending it on something - you need to work out what and whether you can cut anything.

One thing that surprises me is that you have two cars but only budget £50 per month for car repairs.

I have one car - modern so no big issues - and it costs about this much for the maintenance and repairs it needs per year.

You also haven't factored in any MOT/ tax - unless they're new cars and not needed? And fuel costs as well?

Just looked this up and I like the sound of it - I currently use YNAB but I might be tempted to change to this one.

Does it have a web app? I don't want to be tied to the phone, I need a browser interface.

So £2228 is disappearing each month

when do you both get paid and where does the money go?

you have a car loan and insurance for 2 cars - are they both electric?

£120 per month for 90 meals each seems very low, that’s £1.33 each meal. I’m taking it there are just 3 of you as it’s 3 phones?

how do you organise your money?

id suggest having one account for all your utility bills that are a standard price

another account for supermarkets spending

an account each for pocket money for the month

and put surpluses into a savings account

then after a month it’ll be clear where the money is going

@CindiHoZ do you plan on coming back to the thread?

As others have said, you need to look at actual spending over a few months to see what you have spent it on, not just sit down and think about things. £2,000 per month "missing" is an enormous gap, and suggests you are both missing some very major items, and that some of the figures above are probably wrong.