Budget help

[Sarabudgetly]

Created a new username for this.

I’m terrible at budgeting and have generally managed to get away with it by earning a high salary. But I’ve resolved to get a handle on my finances this year after getting stung with a few tax bills recently and my DD starting private school in September. I earn £160k and my income is £7,600 pcm after all deductions including pension, critical illness cover and PMI. I get bonuses but I haven’t factored these in as they are discretionary. This year’s bonus will be used to pay my tax bill.

I don’t have any savings and I don’t have much left over each month, sometimes I am in my overdraft. This is stressful and in the last year I’ve had to borrow money from parents on a short term basis to cover unexpected bills (such as my roof falling in). Everything else just gets paid from my salary when the bill lands.

This budget reflects my everyday life without making any dramatic changes. I appreciate that I earn a lot but, putting that aside, looking at my budget are there any areas for obvious savings? What aspect of my budget seems unrealistic or wasteful to you? I have friends who earn much less but seem to have bigger homes and a better quality of life. Admittedly, they do not send their children to a private school so probably just have more disposable income.

My mortgage (£1,700pm) is paid from my contribution to the joint account. My husband is on a much lower salary but also contributes towards our mortgage and pays for our car (a 3 year loan of £360pm we are repaying to parents), food shopping, fuel, utilities and other clubs for our DD. He also doesn’t have a lot left over each month.

Here’s my budget

Immediately I can see three areas: Takeaways, work lunch and theatre. Do you NEED the takeaways and theatre? Work lunch can definitely be cheaper too.

Also, cancel the pure gym membership if you are also paying for classes (classes, vits and supps)?

Also, you dont need to spend £200pm on family days out if you have the other memberships (Nat Trust, farm etc) - there are plenty of cheaper or "free" things you can do as a family without spending an additional £200 pm on top of memberships?

Takeaway twice a week.
Work coffee if there's an alternative cheaper (taking in a small nespresso machine into your room)
Lunch (take yoir own?)
No holiday for one year or a £5k maximum one
Gym of you don't go! If you do it's fine.
Farm membership depends what that is?
Dinner and drinks with friends...invite them.over to yours instead of going out?

The bottom line is that you are spending more than you are making and it's leading to all this stress. I would suggest a couple of years of serious budgeting to get yourselves straight and amassing some savings. Go through your expenses and delete unnecessary subscriptions. Ditch the takeaways, meals out and start packing lunches. Work on eliminating all your debts, scratch the holidays until you go have cleared your debts. It's not going to be easy but you will feel more in control. Hopefully in a couple of years you will be able to enjoy your lifestyle, which you should be doing on your salaries.

Sign up to YNAB, you get a free trial (without putting in any card details) but it makes you account for every penny.
Has revolutionised the way I budget - I look forward to paying bills because I've already accounted for the money, so no shocks!

you spend a lot going out, take aways and coffees. I would spend a month doing all of your own cooking and taking coffee into work from home.

what is the standing order going into the joint account for?

I also recommend YNAB. I saved a fortune in the first few months of using it and earn a fraction of what you do.

One thing I'd ask.... do you need Prime, Netflix AND Disney+?

Also meant to ask about the joint account. Is your partner paying their fair share of the bills or have you fallen into the trap of paying for the more expensive bits out of your own money?

Another vote for YNAB here.

A question - I can’t see anything in your budget that’s a type of sinking fund. What do you budget to cover things that aren’t a monthly outgoing? So for example: MOT/car service/white goods repair or replacement/Christmas/birthday presents/birthday parties/home maintenance costs/emergency fund/holidays etc?

I used to be like you until I got YNAB and it truly makes such a difference.

You earn well - but you also spend well. I'd say you need to maybe go back to basics for a month and work out what you are getting value from spending on and really enjoy, and what you are just spending on because it is habit. Do you really enjoy the twice weekly takeouts, or are they just habit?

A couple of things that jumped out on spending for your DC - £1,000 pa on uniform and extras? What are the extras? When I kitted out DC for private school yes, it cost a lot the first year, but I rarely spend that much now and just replace as and when (usually from the marvellous second hand uniform shop at school).

Also - haircuts? £60 a haircut for the DC? Find somewhere that does children's haircuts for £20 - 25 a go.

Thank you all for input.

Takeaways - I work (very) long hours and am rarely home in time to cook and my DH can’t cook so we have two takeaways a week together. The Friday night takeaway is a tradition but we can definitely get rid of the other one. I’ve tried batch cooking but I have historically lacked the discipline to do it consistently. I can do better though and prioritise this.

Theatre - Nobody needs to go to the theatre, we just like to. It’s an obvious area for cost cutting though.

Family days out - we tend to go out to National Trust places using our membership but by the time we have paid for fuel, lunch and tea it’s generally cost us £50! We also have trips to London usually to visit museums, art galleries or family and again once we have paid for travel and a snack here and there I found it’s set us back about £50. We can get better at cutting these costs down and still having a nice day out.

Work lunches - yep, absolutely no reason I can’t make my own lunch. My canteen is subsidised so I tend to think it’s good value given the cost of groceries but I’m sure a homemade sandwich costs less than £5 (whatever I tell myself).

Dinner and drinks with friends - i enjoy these occasions out so much and have so little opportunity to go out and just have fun with my friends that I’m loathe to cut them out but we can definitely do it cheaper. I can’t host because my house is tiny but I can persuade my friends to occasionally host to help us all cut down the costs.

I wouldn't cut the dinners and drinks with friends. You work in a high powered, well paid job. If you can't go out and enjoy yourself, what's the point in having a job like that?

Coffee and lunch and takeaways. I don't spend anything on these. I take my own in and I hate takeaways. Vits and sups are not needed if you are eating a healthy diet also scratch either gym or classes. Don't do both. You need to start making use of the second hand uniform swap at school. As you are privately educating you can take term time holidays so I would cut that holiday budget to 5k and put 2k into savings per year. Entertain at home. I mean, you are living the life of reily so of course you don't have much left over. We take home 5k a month and save a minimum of £1k a month. You can't have it all!

I agree. Plus if you loathe to cut those out you might end up feeling resentful that you have to. Important to have a good balance to be the best version of yourself, for you and your family :-)

I couldn't get the budget large enough to read so not commenting on the specifics but there is no reason why your DH can't learn to cook. I bought mine a copy of Jamie Olivers 5 and left him to it for a month. He can now cook! Not the greatest and not the healthiest but better than a takeaway.

Also rather than batch cooking an actual meal think about batch cooking "building blocks" for the freezer. So one weekend make a really big vat of bolognese sauce and freeze most of it in portions. At the same time make and freeze some mash. Then if you take out mash and sauce in the morning you have an instant cottage pie to chuck in the oven. Next weekend make a big pot of veggie chilli and freeze it in portions. Defrosted chilli a sachet of microwave rice and a splodge of natural yoghurt - another instant meal. Frozen lamb or beef stew or even curry plus a sheet of ready rolled pastry - pie or pasties one evening. Defrosted mash plus a couple of tins of tuna or left over baked salmon fillet plus chopped spring onions and a tin of sweetcorn mashed with pesto - easy quick fishcakes etc. I had a very long hours job and this is how I survived.

What is your DH doing? Is a SAHP or PT? If so, he needs to learn how to cook and do fakeaways etc.

I'd cancel Disney, Prime and the 3.99 apple bill, cos it looks as though you're not sure what that's for. I'd also cancel audible and look at free books via borrowbox at your library (they have a selection of spoken word stuff)

I'd also look to cut toiletries and make up spend in half.

My contact lenses cost 13 quid a month via specsavers, so potentially savings to be had there.

I'd look to go on cheaper holidays for a couple of years to build a savings buffer.

Your days out spend is high because you think you need lunch and dinner out. Bring a packed lunch and don't use the on site cafe.

I wouldn't alter the fabric your life too much, that'd be a shame when you work so hard and also have fun as a family together. I'd just focus on the things you care least about first and slash away - expensive cosmetics? vitamins? so many streaming services? takeaways? DC's haircuts? Whatever is farm membership anyway? Also, this year could you do a fun, cheap holiday to save a couple of grand so you can put the money into an emergency fund?

@Advice400 re holidays, we usually have a Centre Parcs long weekend over Easter, a two week summer holiday and then a long weekend away with just me and DH. We have put off booking our summer holiday this year because of money worries caused by the tax bill (which was a £7k surprise) and are thinking we will either not do it at all or go away off peak in October.

Contact lenses - £420pa. I use RGPs; they cost £150 per pair, last for roughly three years and, IMO, are far superior to soft lenses, because:

Vision is much sharper.
Astigmatism is corrected because your eyeball is shaped by the lens.
Ease of handling.
Less chance of contracting any nasty infections.

One of my friends is an optician and he says soft lenses tend to be recommended because of the ease of fitting (RGPs can take about a week for the wearer to feel fully comfortable with them), and also, of course, profit.

The easiest thing to do is set a saving goal and set up a direct debit that takes the amount the day after your salary hits your account. You could overpay your mortgage, put some into short term high interest regular saver, put some into a stocks and share ISA.

Start with £1000 per month and go from there? Your random spends will reduce with you bank balance.

In theory, I should be able to do my own cooking. My excuse is that on the rare occasions I finish work before 10pm I’m too tired to cook and just want to sit on the sofa with DH, a glass of wine and TV. At weekends, I spend Saturday mornings catching up on sleep and then we tend to hang out as a family on Saturday afternoons and Sundays. I could of course find time to batch cook if I really wanted to and I’m willing to give it a go. My friends manage to batch cook and they are in the same job as me but have twice as many kids so no excuse really!

@londonmummy1966 thank you for the batch cooking suggestions. DH is long suffering and I don’t think I want to make him learn to cook. Maybe we could do a cooking class as a joint activity - but I suppose that costs money rather than saving money.

He works full time as a civil servant. I’m not sure what his take home pay is but his salary is around £35k, he is not a spender and doesn’t have much left over each month.

@Wolfpa @flatmop The joint account payment is my contribution to the mortgage. I’m not sure but I think it covers the whole mortgage and then DH covers the car, food, utilities and DD’s activities.

@DappledOliveGroves A question - I can’t see anything in your budget that’s a type of sinking fund. What do you budget to cover things that aren’t a monthly outgoing? So for example: MOT/car service/white goods repair or replacement/Christmas/birthday presents/birthday parties/home maintenance costs/emergency fund/holidays etc?
We don’t have a sinking fund 😬. I do earn a lot so it just comes out of my salary and I suppose I naturally then cut back on other areas. If it’s a massive bill our parents lend us money on a short term basis.

@doppelgangermirror A couple of things that jumped out on spending for your DC - £1,000 pa on uniform and extras? What are the extras? When I kitted out DC for private school yes, it cost a lot the first year, but I rarely spend that much now and just replace as and when (usually from the marvellous second hand uniform shop at school).
The school uniform shop is fab! I’m time poor so I buy 5 sets of everything to avoid mid week laundry. We are averaging one pair of smart shoes a term at £50 a pop as she’s growing. Extras are things like the annual book fair - I’ve just paid £75 for us to go as a family and for the author signed book. School photos cost just over £100. It’s stuff like that.

Also - haircuts? £60 a haircut for the DC? Find somewhere that does children's haircuts for £20 - 25 a go. DD has beautiful, very curly, thick hair so I have her hair cut by a senior stylist at Toni & Guy every 3 months. Yes, I’m mad and this is why I have no money. But … I actually think it’s worth it as it’s hard for young girls to love their curly hair and the schmancy salon experience helps in that regard.

Subscriptions - Netflix is for DD and Prime is for me. I like to stream my tv shows on my commute as that’s time I used to decompress. Today I’ve cancelled Paramount+, Now TV and Apple TV! I could cancel Disney+ too as DD doesn’t watch it as much but it doesn’t seem like that much of a saving to bother.

Audible - I’m part of a book club and the only way I can ever get through the book is by listening to it in the car and while doing chores. Hadn’t heard of the borrow box and will investigate.

Downloading YNAB this evening. It sounds great and willing to give it a go.

You should get yourself on the MSE forum...