Getting the budget right

[Labourer]

Good morning,

I’m determined to go into 2024 with a more organised approach to my finances. Im a single mum of 2 dc’s 13 & 15. Ex dh and I share custody and this works well. All very amicable.

I want to save some money this year and be more organised in how I manage my money. I have a decent job and whilst the cost of living has affected me a bit, I should be able to save more.

my take home pay is £3782. I earn above the threshold for child benefit.

im midlands based so mortgage isn’t too bad at £772 per month. I transfer £1500 into my bills account and this covers mortgage and bills/direct debits. We like to eat well and spend about £500 on groceries each month.

my car is on finance and I pay £279 a month for this. I’m also paying off some 0% debt at a rate of £200 per month.

I put £400 into a regular saving account each month that I use for holidays/Christmas/emergencies

I think I’m I’m doing ok overall, but adding to all of these costs gives a total of £2879 which is less than I take home. I don’t have a lavish social life, or shopping habit so I need to be saving more.

Out of the Surplus £900, how much would you save and how much would you enjoy?

As you're a single parent, my advice would be to pay off any debts as quickly as possible before any other considerations. That's not any sort of judgement about using credit, but there is always a higher risk profile if you are dependent on one income.
Then build up a substantial emergency fund, buy income protection insurance, and boost up your pension arrangements if it needs it.

I'd look at Dave Ramseys baby steps.

Sounds like step 1 is covered (£1000 Emergency fund).

Step 2 - pay off all debt. I'd slam every penny possible into the debt until it was all gone, including the car. This will then increase your disposable for saving (or spending).

Step 3 - Save 3-6 months essential outgoings.

I'd be saving or investing a lot of that £900.

Do you have any investments? As you have money to spare, you could look at investing approx £400-£500 per month?

I'm not investing myself yet - but everything I read or hear says how it's important to have some investments (but not at the expense of an emergency fund etc) so that could be something to consider.