How do you budget your earnings?

[Hello55]

Hi just wanted some advice on how you budget your money like what percentage of your income do you put aside for things? Do you have categories like hobbies, bills, savings, investments, treating yourself, holidays etc? If so could you share your category headings please?
Also do you put aside money for your children if so what percentage in separate accounts for them?

Wanted some advice as I feel a bit clueless on how to budget money!

Tia X

I am self employed and have different accounts on my banking app.
30% goes into an account for tax savings
10% into a savings account which I never touch (immediately after I get paid).
5% into an account for bigger spends, savings for christmas etc
rest stays in current account, what I don’t spend after bills, paying credit carr (which I pay off every month), childcare etc goes into savings account. Even small amounts.

£100 per month to child’s savings account, DH does same for other child. Money they get for Christmas and birthdays I use to buy them premium bonds.

To add, after I pay my tax bill I move all leftover from tax savings into an ISA.

You need to start with your mandatory monthly outgoings - all those direct debits like rent/mortgage, council tax etc. So after all those have come off your monthly salary, what is left? A simple excel spreadsheet will calculate that. Then from what is left over you can spend or save. You can set up different accounts for different things.

Hi thanks I realise this. Just wanted to know how others split what they have left in categories x

Thank you. Do you have like a separate holiday fund? Do you set an amount you can spend on hobbies/treats for yourself? X

Hi thanks I realise this. Just wanted to know how others split what they have left in categories x

I have my bills account so all utilities, council tax etc comes from that account and there is extra put in that account to allow for annual bills - AA membership, car insurance, MOT and house insurance. Then the remaining money I have left is placed into savings - all bar the grocery money and the fuel money.

The savings is divided up into more than one account - one easy access savings, one current account savings (with chase they pay 4.1%) and then a regular savings account - I have several regular savings accounts but each started 4 months apart, so the first regular savings account to finish is used to top up the next account - each pays around £90 on average. But it means if I want a holiday then I have money in the easy access account and if I need xmas shopping there is money in my chase account which I can access when Im out and about - but its earning interest.

Thinking of putting my utilities away in an easy access account and then just paying monthly what I owe - that way I get the interest on the account through the summer months and not the utility company

I think if you posted some more details about your situation, people would feel more able to be forthcoming with their own details.

After mortgage/bills/food money (which we transfer into a separate account) I transfer an amount to my daughter's savings account and then I have the following savings pots for my annual spends that I save for monthly:

Car insurance
Car repairs/servicing
Holidays
Christmas
DD - birthday presents

I use paper and write down everything I have to pay for the month including food/petrol/direct debits
Leaves about £5 which I buy a coffee with
Fun

Hi thanks I realise this. Just wanted to know how others split what they have left in categories x

It's hard to suggest as it really depends on your situation. We put quite a lot into pensions and have a pot for emergencies that we don't touch (£20k) and then have a savings account which about £1500 a month goes into. This is the account holidays come from, birthdays, Xmas any any household spend like replacing things, repairs etc. I roughly assume £10k a year for holidays. We're a family of 4.

All my monthly bills are scheduled so they leave at the start of the month.
Within the first 5 days.

So I'm hopefully not having any surprise bills towards the end of the month.

My pay comes into one of my bank accounts.
I put my monthly cash I'm allowed to spend into the bank account that had all the bills that come out of this. The part that isn't transferred goes into savings and isn't touched( hopefully). In this way I live the lifestyle of approx 50% of my income after tax.

Then from my main account once all the bills have been paid. I take about £300-400 out and move into another account.

I try to only use what is in the current account and then have a buffer of £300-400 I can dip into if needed.

Then if I have anything left over of the £300-400 I loved over it increases my buffer.

If the buffer reaches a certain amount e.g. £1500. I will move extra into savings.

As my pay increases I increase the amount I save and try to limit my monthly spends- try to avoid lifestyle inflation. I follow the FIRE movement but not too strict. So am very careful with spending and try and avoid wasteful spending if possible.

Kids are the one thing I do splash out on but try and limit spends to the amount in current account.

Bills and groceries all come out of the main joint account, then we have accounts for joint savings, DS savings, DS monthly spending, holiday pot, birthday and Christmas pot.
DH and I then get personal spends and I split mine into spending , saving and trips eg with friends etc. Not sure what DH does.

Go to money saving expert and find their budget planner. You don't need to reinvent the wheel here, its all done for you.

Your expenses will essentially split down into Needs, Wants and Savings/Investments/Debts.

Start by allocating what it costs you each month to cover all of your essential outgoings such as mortgage/rent, council tax, gas/elec, food, fuel. If you pay annually for things such as car/house insurance then just divide it by 12.

Personally I would then start with allocating money for savings/investments/debt payments. This will depend on your individual circumstances and what your goals are.

Then allocate what's left (if anything) for your wants, your fun money. eating out, drinks, socialising, self care etc

Thank you that's really helpful x

Thank you very much, sorry what does FIRE movement mean? X

Thank you, I think with me I am a bit reckless on personal spends! What percentage of your salary would you say you allow to go towards your personal spends? X

I will check out the budget planner thank you x

FIRE= Financial independence retire early.

Basically people live like hermits save/invest as much as possible and then retire early once they have enough cash in savings/ investments. The interest/ returns from investments fund the rest of their life.

The basic bills come out on the 2nd of the month. Mortgage, council tax, utilities.

Then I have one other bill a month - house insurance, car insurance, service&mot, RAC&car tax, water bill, Xmas, ds birthday. and I allow £300 a month for groceries & petrol.

I try to keep any other general spending as close to zero as possible.

On the 5 months with no big extra bill, I have £500 to spend on repairing and replacing. Anything from shoes & school uniform to tyres & the washing machine.

Anything left in my current account at the end of the month is swept into a savings account and used for holidays and emergencies.

I pay roughly 10% to savings, do save change, the rest used for bills, food and fun!
Not exactly, what is needed, just cat and I

I do lots of categories! It really works for our family but some would find it restrictive.

Sometimes we might need to move funds about a bit between categories if one is healthier than another but generally we stick with the budget. It also means costs don't tend to creep up on us as we've already saved for it e.g. school uniform.

I haven't put the amounts next to each but for perspective our joint household income is approx £50k, family of 4.

House stuff (e.g. new towels)
Mortgage
Childcare
Cleaner
Holidays
Dates for me and dp
Xmas
Birthdays
TV licence
Tesco delivery pass
Amazon prime
Netflix
Boiler care
Home insurance
Car MOT
Car insurance
School uniform
Family days out
Clothes
Haircuts
Kids sports activities
School lunch money
Kids pocket money
Long term savings
Council tax
Critical Illness cover
life insurance
Contact lenses
Mobile phones X4
Gas & electric
Window cleaner
Bank account fee (includes phone and travel insurance)
Broadband
Commuting train
Personal spending
Petrol
Food
Diesel/petrol
Audible

My spends as follows

1k in savings
1k bills and food
£500 to blow.

My parters is identical but the 1k is mortgage.

@Hello55 our income fluctuates because of unsocials hours payments, on call etc, everything else is static so if there's a reduction the reduction is from personal spends we get between £600-£900 a month each ps and cover our mobile bills and petrol from that, we both have our base quite locally so petrol outgoings are low, less than a tank a month between us and no other commute costs, any further travel for work is claimable. I save about £250 a month from that, jointly we save around £1000 between our savings, DS savings and holiday/Christmas fund

We used to save more but our mortgage just went up by £600 a month

I have a spreadsheet with all of our monthly outgoings. I then figure out how much "fun money" we will have for the month for takeaways and if we have expenses such as MOT, birthdays etc. everything else then goes into savings

I then have an additional spreadsheet projecting our expenditure for hols/xmas/kids birthdays for the next 12 months. I monitor it daily (takes 5mins) and move money around accordingly.