Very high spending - where to cut down?

[AguaMolePedraDura]

NC for this so I can be frank. My spending is a mess - DH high earner and great with sharing as needed so it’s not leaving us broke but I’m just losing my mind every month at money seemingly vanishing. To compound the mess some of my expenses are actually work expenses that I claim back in arrears, so I battle to get a handle on my actual domestic spending. Hoping writing it down will help (and what's here is my actual spending, not work stuff).

My income: £1,700 pt work + £600 net rental income from property + £1,000 DH transfers to me for shared costs - £3,300.

Expenses in September:
£1,165.00 - childcare + holiday club for half term. I think there's another £84 for after school care for the month that I paid late
£551 - groceries (bigger shops at Ocado + Lidl, then about 20 tiny top-up shops)
£283 - car finance
£250 - credit card - mix of airbnb costs from during building works + £100 in food shooping + takeaway
£211 - loan repayment, taken out during building works
£150 - eating out (various small meals/coffees with kids or alone)
£145 - swimming lessons 1:1
£80 - one-off physio appointment
£20 overdraft interest
£283 - car finance

£100 - withdrawn at cashpoint. Can’t remember this at all, wonder if it was to buy something 2nd hand for the kids off Marketplace etc.
£60 transport (£23 fuel, £7 Uber, remainder on TfL buses/tube)
£22 - Entertainment (Netflix, Apple cloud storage, bookshop)
£13.00 - app subscription DD
£3.80 - charity subscription
£45 - car insurance
£95 - SumUp - no idea what this was substantively
£48 - critical illness insurance
£4.60 x2 - google cloud - no idea why x2
£36 - gift for friend following surgery
£3.60 - booking for Halloween activity
£20 - new bin

= £3,743.60.

Childcare is about to get marginally cheaper (by about £100 pm) but as I have toddler twins + older child that will be expensive for at least another year.

Groceries doesn't even reflect our total spend because DH tends to "pop in" (doom) to M&S and buy things, plus will get lunches out. But it already feels high, because I often have food home from work (not exactly, but imagine I work in a kitchen and on a weekly basis get £30ish of fresh produce or similar that is surplus to requirements). So should be lower really. I've no idea why it's so high and wonder whether groceries + meals out is the thing to clamp down on. We don't drink at all so groceries is only food + nappies + household things.

Obviously there are other expenses (mortgage, bills) - these are with DH so I haven't included them.

Where would you start?

Both net @LesLavandes

I can’t believe people live like this. Joint account and joint finances.

I'd love to know what your husband does for a living?

Ok - I think you need to cut yourself some slack.

It's not nice 'asking' for money but if things are set up in such a way that even with pretty 'normal' spending you are destined to go into the red every month then you are going to have to keep asking. Sounds like you set yourself up to fail (not intentionally) and you need to restructure who pays for what or how much money you OH gives you (routinely, without you having to ask). I would discuss this with your OH and have a little confidence in yourself - you refer to your OH as the 'financially sensible' person and that you don't want to 'drag him down' but you are a team and all the members of the the team should be valued equally. Looking at your spending you are not dragging anyone down, you are spending all your money on your family.

I would talk to you OH about spending habits (both of yours) and agree what you want to keep and what you don't - you could probably spend less on food but you might decide as a couple that you don't want to, for example.

Me and my OH earn a lot of money between us but we basically spend it all every month at the moment (interest rates being the main reason as we are quite heavily leveraged) but I would never consider it 'my' job to spend less, I would think we need to discuss things as a couple and agree on our priorities. I would have different advice if you were spending hundreds of £ a month on expensive handbags and self-care but that is clearly not the case.

I'd love to know what your husband does for a living?

Tech

That is your first challenge to negotiate with your husband, work out how much the balloon payment is going to be on your car and start saving for it now.

It’s easy to not plan and cover expenses when you have such a high monthly income but the challenge is to plan these together and have the cash at hand.

Agreed - sometimes you are doing nothing wrong (ie. not spending unreasonably), it's just that things are a bit tight for a while.

Ask DH to pay the loan and credit card. These were joint expenses for building work and he can afford to prioritise those now holiday paid. This will give you £461 additional cash available each month. If he wont get and interest free credit card and pay £100 per month rather than 461.

Shared costs total 2272 (1165+551+283+145+45+13+22+48) so his share is 1136. You might want to ask him to pay more if possible. (Appreciate he pays whole mortgage and other bills though).

If it genuinely is you who wants to be independent he should be happy to make some changes so long as affordable to him and sounds like it is.

That is your first challenge to negotiate with your husband, work out how much the balloon payment is going to be on your car and start saving for it now.

@50lessfat It’s around £7000 from memory. I expect the car will be worth more than that because the (minimum, low as could be) annual mileage that we agreed was something like 10,000 miles a year, and the two year old car has 5,000 miles.

Not mentioned because I expected to get howled at more because of it but DH has shares as part of his income, and that could come from there if need be.

You need to it down with DH and discuss and tell him you are struggling and show him the list and decide together whether he can contribute more or you can cut back on anything as a family.

I'd mostly agree with this .. although I can agree that any ketchup is as good as heinz! (Aldis is gross....I digress) ...but I'm not convinced they can't afford nice brands of things with that income, rather that they're not allocating the income fairly.
However 550 + 20 top ups + 150 eating out + DH lunches + 30 food from work + possible other unaccounted spends, or kids food at childcare , there probably is some food waste snd areas that could be cut back on fairly painlessly.

It is a mistake to buy a car like this. You really should get a much cheaper car and either buy it outright from savings or take out HP so it is yours at the end of the term. It should cost far less in insurance as well.

I agree with others - it is pointless trying to do a budget like this with just your salary and only part of the bills. The pair of you need to sit down together and write down all the expenses. Everything. That total is what needs to be paid out of your joint income. Then look at who currently pays what, and re-jig it. Seems to me that you are paying far more than your entire salary in outgoings, whereas he isn't. That needs to change. I suspect that he has lost sight of all the bills like childcare that come out of your account.

Does your husband know that you are worrying about finances?

That’s not the challenge though with both your incomes over the next two years you should be able to save 7k in 24 months to pay for the car ballon payment, it’s about priorities. I’m not judging you as we were very much like you and your husband (not as flush) but we have both had to change our mindsets when it comes to money management.

BTW I would also keep a low mileage well serviced car too even if it’s not used much in fact I am as I will give it to my son in a few years. I paid for it on 0% credit card so it’s paid off now.

Here’s my plan for you.

1. Get a credit card in your name that gives you points. Use it exclusively for work expenses that will be reimbursed.
2. Open a joint bank account. Transfer all fixed joint family expenses (car, childcare, mortgage etc etc) to this. Fund it with enough to create a buffer each month, then set it and forget it.
3. Open a second joint account for discretionary & variable spending - food, presents, and eating out as a family etc
4. Use your own personal account only for personal spending.

Research YNAB. I think you’d like it but it’ll only really work if you have a joint family budget, so more communication between you and DH. In fact, get him to research it.

Cancel every single direct debit and only reinstate the things you decide you need after a month?

Do a weekly online shop of meals and snacks you've pre planned then you shouting need the 20+ top up shops. I bought a £45 coat on a top up shop and the other crap I come out with adds up when I only go in for milk.

Online you don't get tempted by a shop full of stuff

How much equity do you have in your flat? How much are you spending to service that investment? Because you could say that your income is higher than it is buy you choose to invest in property. Is it yours or joint?

I agree with the others - whether or not you decided to fully join your finances or not, you do need to look at your family budget as a whole when you have joint obligations like a honking great mortgage, car finance, children etc etc.

You are never going to get a handle on spending (and saving) if the right hand has no idea what the left hand is doing (or spending).

How much equity do you have in your flat? How much are you spending to service that investment? Because you could say that your income is higher than it is buy you choose to invest in property. Is it yours or joint?

It’s mine alone and has over 50% equity. The £600 income from it is net income, after paying the mortgage capital and interest. To add yet more complexity I expect the (lovely and I don’t want to shaft them) tenants are wildly underpaying, because I haven’t put their rent up in six years. In zone 2 of London.

I missed that, not sure how. Thank you to the (other) poster who pointed it out instead of ridiculed.

Research the going rate for your London flat and adjust your tenants rent accordingly maybe still leave a bit of a discount but 6 years no rises is ridiculous. When is your current BTL mortgage up? You need to plan for this anyway.

This is so much not about you cutting down on your lattes and yoga; you and DH need a fundamental review and a joint grip on finances. You're lucky that you jointly have loads of money coming in and a good base of equity; but you have high costs so the two of you need to sit down and work it all out from the POV of a joint pot.

FWIW DH and I put all income into a joint account and have equal personal spends into our own accounts from that every month. Anything relating to kids or household (including cars) comes from the joint pot; personal spends is for anything we do solo. Other methods are available but ours works for us - and over the time we've been together the higher earner has changed.

We have separate finances but all joint expenditures are from the joint account (including mortgage).

Basically we worked out how much we spend and put in money depending on our earnings. DH earns 5 times what I earn. So for every 100€ I put in the joint account, he puts in 500.

I know this means he saves more than me but it works for us.

We also readjust it every time DH gets a payrise.

Pool your income
Sorted
Cut down on food spend if you wish