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.

I don’t think I’m financially abusing my DH. Yes, I spend close to £1k on myself each month but I’m also not pocketing the remaining £6.5kish that I’m earning

He has zero to spend on himself, despite working full time, earning the national average salary and bearing the load with dd every weekday.

If you cut your treat money to 500pcm, he could have some treat money too. This is how decent marriages work - how many women have come on here in the past and said they can't even afford to get their hair cut working full time while their dh earns 6 figures?

Pay all your money into one pot then take the same amount each from this for personal spends. Cover all your family essentials from this pot and save what’s left. Stop insisting that you need £1000 a month to spend on yourself!

The money spent on expensive ready meals and takeaways and weight loss supplements seem to be an area that you could definitely look at. Improve diet plus money spent on it and you could drop the supplements. Win win.

Do look at YNAB and perhaps start following people like Dave Ramsey on Instagram.

In a way, what you earn is irrelevant if you've never learned how to properly budget. YNAB should help with that. My "longer term expenses" category in YNAB takes one of the largest chunks of my income, but it covers things that don't crop up on a monthly basis. So Amex fee (paid annually - we use it for airmiles); swimming lessons, white goods (so if the fridge, freezer, washing machine gives up the ghost, then this is covered. We put in £40 a month to this category. Then we have parties, gifts for birthdays, parking permit costs, road tax, car insurance savings (so we can pay annually and save money, rather than doing direct debit and paying higher interest); home maintenance costs, road tax, emergency fund, clothing.

Your pension contributions are low. I don't know how old you are but the tax benefits on pension savings, along with compound interest, means that you should try and up your contributions. I pay in 14% of my salary - my employer pays 6%. Ideally I'd like to up my contributions and will do once I get some funded childcare hours.

If you do start YNAB, then do watch the videos and tutorials, sign up to the classes and there's a YNAB UK Facebook page too.

DH doesn’t want to share the details of his expenditure and doesn’t want to adjust anything. I’m not going to make him because I’m sure he has his reasons.

You have made an assumption that he bears the load with DD everyday. Childcare is shared relatively equally, but on balance he has her a bit more.

He is earning the national average wage because his area of interest is traditionally attracts a lower wage. That’s just the nature of his industry and interests and it’s perfectly fine.

Thank you for the recommendations, I spend way too much time on Insta so may as well make the time more useful! Lots of good quick meal ideas in your previous post as well :)

@Starseeking Your spending is similar to mine lol - phew, I was starting to feel like a pariah lol. Make some changes with me!

ok, you’ve convinced me to cancel the Disney+.

Cleaning - DH and I used to get grumpy at each other about cleaning and this has completely gone away since having a weekly cleaner. The cleaner comes weekly as she also does the ironing, which is mainly school uniform and DH’s shirts.

Uber, travel and station parking - Travel and station parking are needed because of where we live, DD’s school (20 minute drive away) and because we have one car. We live in the Home Counties and both commute into London. I do morning school drop off and then park the car at the station, DH can then get straight into the car at the end of the day and drive for school pick up. I’m surprised nobody else has commented on the Ubers tbh. DH is convinced we would be rich if I cut out the Ubers. If I get home very late I can’t face the 15 min walk home in the dark so I pay £7 for an Uber. I can’t get in the car as DH will have taken it for school pick up.

My comment on him earning the national average wasn't as a negative towards him - it was to pinpoint hmthe fact that he earns well enough that he should have some spare money to spend on himself each month.

You are actually annoying me now

So so much of what you spend (you, not dh) is because you cba.

Cba to cook
Cba to walk 15mins home without the car
Cba to pack sandwiches for a day our
Cba to jog for free (like dh does because he cannot afford gym/pt sessions/diet pills)

@Nottodaythankyou123 yes Willows Farm is the one you’re thinking of. It’s excellent year round as has both indoor and outdoor activities and i think at £38 pm for family membership it’s good value. I’ll be taking a packed lunch for DD going forward.

The school is the expensive one but DD has a disability and of the 5 schools she was offered a place at (proud mama!) this one had the best balance of academics, pastoral care and wanting to support her without making her feel “different”. If I could have conjured the perfect school for her it would be this one so it’s a red line for both me and DH (to answer another poster, DH loves the school too).

DH doesn’t want to share the details of his expenditure and doesn’t want to adjust anything

Maybe he is scared that the measly amount he has left is about to be requisitioned for some other household bill.

Why not sit with him and say "on reflection, I can see that you get little to nothing to spend on yourself and its not fair. Let's go over all the figures so that we have equal fun money every month, as I've been taking a disproportionate amount for myself"

@SecondUsername4me i can tell that you’re getting annoyed at me! You are right though, I cba a lot of things because I work a demanding job and am often tired. Yes, I could walk home after work but I leave the house at 7.30am and get home at 10pm, it’s a long day by anyone’s standards. Same reason why historically I don’t cook, I’m tired!

That said, this thread has helped me to make some changes. As @Moonpig82 said, it’s easy to be bad with finances when you earn a lot but I think I owe it to my family and myself to be financially more responsible. DH and I talk about doing better all the time but I think we’ve got to the stage where we just need to do it. And it is something we need to do together because irrespective of who pays for what, this is our lifestyle and the way we have lived our life for years. DH needs to be on board before I swap out skincare for cheaper alternatives and long haul holidays for Eurocamp.

Takeaway coffee - I have officially given these up. DH is now going to make me a coffee in the mornings to take to work and I’ll be using the free coffee machine at the office.

Lunches - I’m going to make myself lunches to take to work.

Classes, vits and supps - I have committed in advance but I won’t be renewing these after April.

Ubers - I will walk unless it’s raining.

Takeaways - once a week only and DH and I will now think about whether we really want it or can have something in the freezer.

Cooking - most of the comments on this thread were about cooking. I’m going to use my Saturday morning lie ins to prepare two meals in foil trays that can go in the freezer. I can then take them out in the morning with instructions for DH to put in the oven when he gets home. At weekends, we will also factor in cooking together in the evenings as part of our downtime - music, wine/beer, a new recipe and he can be my sous chef or just keep me company while I cook.

YNAB - I’m going to download this and watch the videos and join the Facebook groups. I will leave all my skincare and fashion Facebook groups to help curb the impulse shopping.

I’m actually really excited about the changes we will be making and money we will be saving.

You really need a savings safety net op.

I'd be so stressed earning what you both do with no savings and debt

Re your cooking, I know a very busy family who said they ate stir-fries 90 per cent of the time. Super-quick, healthy, and only one skill to master.

We were getting a new car on finance every 3 years but at the end of our last deal we decided to pay the balloon payment and then drive the car into the ground instead of constantly driving new. I think it was a good, financially sound decision. DH sorted it all out so I didn’t have the details, but I have just checked our mortgage renewal application from last year and that says we took a loan of £10k for the car and pay £280 every month for it.

I am on PAYE but have to do self-assessment tax returns because of my salary. Not sure what happened but about half of my team at work have ended up with huge tax bills after doing our tax returns this year.

Wow. I'd honestly have thought that on that salary you'd be taking home more each month! That's quite a surprise for me.

Not sure what happened but about half of my team at work have ended up with huge tax bills after doing our tax returns this year.

I mean ... it seems extremely blasé of you not to want to get to the bottom of this. It sounds as if your employer has had you on the wrong tax code all year, and has got away without paying you any bonus as a result. That is not a casual mistake. Particularly in your case when you need to start budgeting properly, you need to have certainty about what your income is going to be.

Regardless of whether or not you're going to keep the car for an extended period (a) you'll need to budget increasing amounts annually to maintenance and (b) eventually you will need to get a new car. Saving small amounts now will avoid loans down the line.

@tribpot we all spoke to payroll and they said we were on the wrong tax code, tax codes were provided by HMRC and it wasn’t their problem. HMRC confirmed we were on the wrong tax code and said we should have been calling them regularly to check we were paying enough tax. Seemed strange when I’ve never had to call HMRC before and have always paid the correct amount of tax but HMRC were adamant that we were at fault.

OP, I applaud how you've taken so many tips on board.

But.

You work extremely hard and get paid handsomely for it.

Don't cut everything to the point that you feel life is all about work with no reward.

I think it's important that you and DH have a proper conversation to work out how you can both enjoy a good quality of life while building your financial security.

I find it so odd that your DH refuses to cook, and refuses to sit down and look at finances with you. I don’t think it’s terrible that he’s on a lower salary at all - but he’s got no business being indoors all evening having only made pasta pesto while you’re working till 10pm to pay for private school and holidays. Fair enough if you genuinely feel the balance works somehow (it wouldn’t for me!) but to be unwilling to be open about finances when his salary doesn’t support his comfy lifestyle, I find it obnoxious and red flag-y. I do agree with another poster also though that as long as both pull their weight (I don’t think he does!) that you should equal spending money. It doesn’t appear that he does, but then you can’t know because he refuses to be open with you which is outrageous to me.

Just to add re the tax code issue - same thing happened to me. My office had me on the wrong tax code but HMRC said the onus is on the individual to check their payslip/tax code and be sure it’s correct. Had to pay back £3k despite paying tax on PAYE and bumbling along nicely thinking I was doing everything correctly. My work took no responsibility. If I hear the words “the onus is on the individual” ever again I’ll scream.

@Gazelda thank you. I think DH will get on board with a household budget once he sees that I’m serious about it and putting it into action.

@EverybodyLTB I’m ok with his reluctance to cook. I never do the dishes or the bins and he doesn’t ask me to because he knows I don’t like to. I feel the same way about him not cooking.

I’ve been thinking about how unbalanced our spending money is and I don’t think the picture I have painted is quite right. If he wants something and doesn’t have the cash, he just puts it on his credit card and asks me to pay it off at the end of the month, pays for it from the joint account and asks me to do a top up transfer or he uses my bank card. My bank card tends to stay in his wallet as I use ApplePay and he uses my card as he sees fit to cover stuff. I know he sometimes uses my card to pay for groceries but that will be because he has paid for something else. His Amex has a ridiculous limit, something like £50k whereas my own credit card has a £1.5k limit which I’ve never bothered to change. I have his Amex card details and sometimes use it for online shopping. I’ve never then paid it off myself but I’m pretty sure he would just clear it from the joint a/c and ask me to do a transfer or use my card to clear it. We have our separate accounts but use each others cards sometimes and don’t feel the need to ask. This works for us because my money is ultimately his money, I just spend more than he does. This is a man whose wardrobe is predominantly Ralph Lauren, he’s not walking around in rags while I live the life of Reilly!

Why is DH as a low level civil servant commuting in?
He should be maximising WFH to reduce costs and save time
He clearly isnt career minded so if he won't earn more then he needs to do more

@TangoinTokyo his job requires him to be in the office 4 times a week. I don’t need DH to do more really, other than perhaps put food in the oven.

It’s a classic case of how lifestyle can creep up the same rate or just above salary, I’ve been there and done that.