New budget about to kick in

[Foxyfog]

Hi,
i’ve made some major life changes recently- finalised divorce, new house and mortgage and a new job (promotion) from January. I’m just trying to get my head around my new budget.

my new take home pay will be £3900. Mortgage and all essential bills and direct debits will come up just over £1500. This means I’ll have £2400 for fuel, food abs stuff for kids (12 & 14)

how would you apportion the £2400? I’d like to save some but set up some pots for various expenditure etc

how would you organise this!

£80 per day.
any daily money not spent goes to savings.

£2400

£400 aside for groceries

id put £1500 into a saving account, easy access with high interest. I’d set up a standing order monthly on payday

that then leave £500, I’d open a chase account as they have linked savings paying £4.1% and put the money into this account for spending - just transfer the money when needed. What’s left in that account will earn interest

then in 12 months time access where to put £18000 to earn decent interest. Obviously you may have spent some of the £18000 on summer holidays and Christmas.

I have always been a saver and have various savings accounts and ISA’s. Depends how good you are with managing your money, you could open different savings accounts for different things or just have one that you put money in each month. I also had savings accounts for my 2 sons, where I paid in per month, they are adults now and were able to buy their own first cars and pay for driving lessons.

I'd split the £2,400 into food, daily spending, takeaways, treats and fuel for car (I'm the same family size as you and have £660 for these )
Then I'd portion out savings for annual spending, birthdays, Christmas, clothes for myself and children, any hobbies, car (mot etc) and savings. Any leftover I would add into extra savings. I wouldn't use the £2,400 as a target but a limit, if I thought all my annual spending would be £1000 then I'd put the remainder into savings.
Personally I save £50 each for Christmas, birthdays, kids clothes, hobby, car. The smaller amounts for my other pots.
I also second Chase, dialysis savings at 4.1% and so easy to use.

I'm a pot/ different accounts fan

Work out how much you need/ want for these accounts: a monthly general spends account ,Food account , Fuel account and then save / ring fence the rest.

I personally have a holiday saving pot, Xmas/birthdays pot, car/ home repairs pot, a general saving account which I can dip into, plus I send money over to non touch savings pots like fixed bonds etc,

The next step, I would suggest, having established your monthly bills, is to check your non-monthly essential expenses. These are things like:

Insurance: house/car/life/pet (as needed)
MOT and car service
Dentist/Opticians
Annual household costs: boiler service, green bin...
Any professional memberships needed for job
School uniform (if needed)
Any essential clubs needed for kids, term time bus passes etc
Any annual subscriptions lihe Amazon
Any essential documents like passports

It's worth spending half an hour going through bank statements to identify what these are. Add them up, divide by 12 and take that out of your 2400.

Then there's things you will probably want to cover but have flexibility on costs: things like haircuts, Christmas and birthday, 'essential' clothes and shoes. Again add up costs and divide by 12

Then there's expenses to designate savings to, that might not be needed this year, but will come at some stage. Things like, new car tyres, new car, technology replacement for when phones break, appliance replacement for when washing machine breaks, house and garden maintenance.

Then emergency fund in case of job loss...

After that, what you have remaining is for the fun stuff like holidays, days out, eating out, 'non-essential' clothes, takeaways, beauty treatments etc

It sounds like a lot, but the key first step is to make sure you've accounted for all the essential, periodic expenses in your monthly budget so they don't ambush you when they arrive. I use an app called you need a budget to track them, but you do this without it

Ridiculous suggestion. You could eat out every day and save nothing with that approach.

Make sure you account for all annual and irregular costs (cars, holidays, Christmas, school uniforms etc). This can be a significant amount.

Then save some money 'just because' - what happens if you're sick? Do you still get paid? Review your insurance provision for your new circumstances. Do you want to overpay your mortgage? Will you need to save for DC university costs?

Have a look at Moneysaving Expert for budgeting:

https://www.moneysavingexpert.com/family/money-help/

Then the financial flow chart for working through financial planning:

https://ukpersonal.finance/flowchart/

We have a joint household account that pays all bills whether monthly or annually. All are added up and regularly reviewed using a simple Excel spreed sheet. This includes car repairs etc so at some times of the year it has a lot of money in it and then decreases. We usually find we have a lump sum left every 12-18 months we take out. We pay a standing order in monthly.

All that is paid for out of personal account is food and clothes etc. makes it really simple