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.

Hear hear.

I cook all the meals at home ( apart from Friday night take away) and love someone else making my lunch for me! i.e. Itsu.

Don't give up on the things you enjoy, or it won't work, and you don't have to with that salary.

What I would do (and I am going to do myself for the next month as we are spending some money on the house and I want to save more) is create a spreadsheet and write everything you spend in it every day rather than the spreadsheet by categories you have made. I'm quite good with Nutracheck and logging food so I can do this with spending. And with online banking etc it's easy to have the information to hand.

Then you can get a handle on what you really spend and put it into categories after.

TBH though I don't really see a problem, you make good money, you spend it and you already managing to save.

This thread is classic many a mickle makes a muckle. It's easy to discount a coffe here, a lunch there, when you are earning a lot but it all adds up. I bet you will find your savings from the changes add up too, but you must resist the urge to think "I've saved on X so I'll spend on Y" (eg I've saved by not buying coffees so I can splash out on new shoes or whatever).

@Sarabudgetly Might be worth you logging into the Government Gateway. You can tell HMRC what you expect to earn which will adjust your tax code so at least some of what you owe (ie no personal allowance, etc) will be recovered.

I loved Willows Farm and that membership seems like a bargain!

Makes sense re the school - I’ve got friends and family who teach in schools around there for that age group so they may well teach her.

The only thing I would say, is is it worth it? You earn a lot but according to your posts you’re out 7.30am-10pm routinely. Is it worth it? You might earn less elsewhere but you might have more disposable as you’ll have time to do things you currently outsource or don’t have the energy to do. Just seems like a hard life given despite earning so much you’re having issues budgeting - for hours that long I’d never want to have to worry about budgeting. Not a judgment, I’m curious about whether you consider it worth it

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.

OP, I can't make up my mind about a lot of things on this thread, but re the above, how can that be when you're out of the house until 10pm every day?

@excelledyourself I do the morning routine and DH does the evening routine. DD goes to after school club until 5pm and is in bed (more or less instantly asleep) at 6.45/7pm.

Lol, I just recognise your "can't be arsed-ness"!

In truth, I only really save when I absolutely have to.

About 10 years ago when my EXDP and I wanted to buy a house, he was shocked that I had £10k in savings and was £20k in debt. At that time I was on a salary of about £100k, while he had £70k savings on a salary of £45k. I told him I'd sort it, 18-20 months later I'd cleared the debt and had £60k in savings, so in total £70k (£50+20) not spent on random needless stuff. This was before DC, mind you.

These days, I earn far more than I did back then, and am a single parent so I hold 6 months savings, then top up with my bonus once a bit is spent. I think very very carefully before I deduct anything from savings, and it has to be for a needs-based reason.

At present I'm not bothered to implement the day to day lifestyle changes that result in hard savings that I did previously, however having done it before, I know what needs to be done. You need to be completely ruthless in curbing your spending, and not make excuses to yourself about why you can't give up x, y or z.

Good luck OP, I'm sure you can do it if you really want to make the change! Having knowledge of your DH spending will also help, it's odd he doesn't want to work out a household budget, and I'd try get to the bottom of that if I were you.

He is still tied to being in the home those three nights on duty til you get in. So yes, dd asleep or not, he is responsible for her from 5pm til 10pm 3 nights a week.

We cannot afford the takeaways any more.

That doens't mean I don't have "can't be arsed feeling" almost every night occasionally when it comes to cooking for me/DH/DC. But I just get over it and one with it. And make sure I have "can't be arsed" options available for those evenings (pasta/beans on toast/jacket potatoes, tuna & bean salad in wraps etc).

When we could afford it - yes, takeaway was an easy option.

When we realised how much money we were spending - because we had to cut back - it actually just takes planning and cupboard planning and you can avoid it easier than you think.

OP does that mean on the 3 days a week you get home ar 10pm you eat then?

Are your office days excessively long, or is it the commute taking up the majority of the extra hours?

Obvious for me would be reducing takeaways, work lunches and Tv packages. Can you drop the cleaning to 2hrs a week?

It's all very overwhelming so maybe start with one small thing at a time. Obviously YNAB. Get to grips with it (Nick True is a YouTuber who does brilliant videos that my DH found more useful than the official videos). I really can't recommend it enough. The only stumbling block I had was getting DH to update it with his spending daily (he's a spender, I'm a saver) and then stealing money from categories AFTER overspending. You really need to both be on board or it gets anger inducing.

Then have a think about really quick meals you can eat instead of takeaway. They aren't as cheap as cooking from scratch but they're a lot cheaper than takeaway. Fresh pasta and sauce, pizzas, a steak with some veg and microwave mash, fresh noodle with stir fry veg and sauce, even a mix of ready to eat fridge bits is cheaper than a takeaway.

We batch cook but it takes time and planning so that can come later. One of the fastest meals we make is pasta and bolognese. We batch cook the Bolognese over 4 or 5 hours on a weekend but it's mostly hands off, then freeze individual portions flat in freezer bags. In less than 10 minutes you can boil the kettle, cook the fresh pasta, reheat the bolognese and cover in Parmesan. A batch makes 15 portions for DH (I'm veggie so have pesto myself). He says it's worlds apart from a ready made bolognese and feels like a real treat. One big tip if you start batch cooking is to buy foil takeaway trays too. It's so much easier to save some leftover curry or something that can be pre-assembled (we do macaroni cheese, lasagne and shepherds pie) when you have 50 available containers. When I have time I stick the foil tray in the oven, when I don't, it's easier to peel it back and dump the frozen block in a bowl for the microwave compared to getting food out of Tupperware .

Kudos to you for starting the thread and taking all the ranging opinions on board. I think you and many posters are massively missing the point though.

You are an extremely high earner and your DH earns an above average wage, yet you have no security, no savings and various debts. Making a ham roll and taking a coffee into work isn’t going to substantially change things.

You need to get serious about setting a sustainable budget which includes all your income and outgoings as a household. I cannot get my head round your DH not being willing to discuss this and how little you know about things like the mortgage term and rate.

What kind of life do you want long term as well as now and work back from there. You seriously need to up your pensions contributions and fully understand your DH’s pension and benefits. Also have both an emergency fund and other longer term savings. You have to do this together.

I’d recommend looking at Ramit Sethi, either his podcast which is money coaching for couples or get his book, and then the two of you work through a chapter a week. It sounds like you are carrying the mental load and the two of you don’t sound like a partnership. Agree with others that your life sounds exhausting. I would not make these choices especially as it’s not giving you security or you have a plan to do it for X years and then get to something better.

https://www.iwillteachyoutoberich.com/ Ramit Sethi’s cheesy named website.

Where are you for the other two days per week, OP? You don't mention lunch, so are you at home?

Is there no way of cutting down after school care if you and DH have 3 days a week between you where you're not in the office?

And why are you paying 18 weeks a year holiday club? Do private schools get so much more holidays than state? What about the annual leave you and DH take for holiday periods?

I agree with ‘myturntonamechange’, you are living life boldly and with so little financial security. We don’t know anything about your life and perhaps this is influenced by other factors- maybe you have a back-up plan, super rich parents, an expected inheritance, etc. maybe you had a wealthy childhood and the way you are earning / spending is totally normal for you. Maybe you have lots of high earner friends and this sort of spending is totally normal in your social circles.

However, the more our family have earned, the more we have started to prepare
for the future (and count our blessings /
money in and out) and squirrel it into pensions etc where we can. It all seems so fragile and redundancy can happen to anyone, anytime. Being a x1 earner household makes us feel more vulnerable, but most people aim for at least 6 months spending in the bank just in case. This could be something you strive for however you are going to need to turn your spending on it’s head to save this much, and it might take a year or two.

"Save what is left".

Decide on a comfortable level of savings and set up a standing order for pay day like any other bill, then save any leftover money as an extra transfer.

My income is very different to yours (pretty similar to your husband's, actually) and I'm a solo parent so obviously my financial circumstances are not at all like yours, but I'm currently busy trying to up my savings (building them back up following moving expenses, saving for some expected future costs, and just generally to counter cost-of-living factors that have shifted the balance towards things being a bit tighter and there not being 'leftover' money at the end of the month).

I worked out all my regular bills and essential costs, including commuting costs and a £50 weekly supermarket delivery. I then figured out an amount (£500) I can afford to put across into savings/sinking fund each month, and this goes straight over on payday. The remaining amount (which for me is £68 a week) is what I have to spend on everything that isn't strictly essential. Craft materials, lunch out with my son, clothes, entertainment, the odd lottery ticket, whatever. And then I keep really close track of that in an app - I essentially 'pay' myself £68 every week and log every single time I spend. And I can use that on whatever, but since it's (very) finite it's a balancing act and I do have to think quite closely about each cost. I've spent the last couple of months hoping I might manage to afford a few new pairs of tights as I'm running low on pairs that don't have holes in them, but they've not quite won out against other costs yet. You can clearly afford more than £68 a week for this sort of spending, but at some point the same principle does have to kick in - if I want this thing, I can't also afford that thing.

In doing that, the business of taking lunch to work etc naturally kicks in because there are plenty more interesting things to spend money on than a sandwich, but the money saved doesn't just get frittered on something else. The old adage about 'watch the pennies and the pounds will watch themselves' very much holds true.

Also, where I'm able to save money through e.g. a voucher or whatever, I treat that as though I'd actually spent the money, and shove it straight into savings. So if I've used £7 of clubcard vouchers on my shop, I'll pop £7 into savings.

I'm also looking really hard at those small costs that seem inconsequential because they do all add up. Which is not to say I'm cancelling everything, but if I'm paying for something it does need to pull it's weight.

There's nothing wrong with any of the things you're choosing to spend money on in and of themselves - but you can't afford all the different treats and conveniences you're correctly paying for, at the rate you're currently paying. And you need to be systematic about scaling them back, so the money doesn't just get frittered on something else.

Also, I appreciate that everything I've said there might sound a bit 'well duh, that's how counting works' but the big shift for me has been in recognising that I could no longer just afford to buy effectively whatever I wanted and still have enough money to get through the month. Cost of living pressures have really made a difference, there - and for you, school fees will also be part of that.

I have just reread one of your posts. Your DH asks for transfers and/or you pay his credit card. Again, another reason he probably does not see the need for any financial adjustment. Imagine if you start trimming all your extras off...but he is still living life as it was.

If he has £1700 (straight to mortgage) from you, plus salary of say £2000...that £2000 goes on utilities/insurance etc. Our utilities/insurance and financial products total c£1200 a month (excludes mortgage). Yours maybe a bit bigger. But he could have a chunk of his £3700 left over.
Plus you transfer money if he runs out
Or he shoves stuff on a credit card - which you pay - if he runs out.

I am not saying this is wrong - it is how you have been working stuff out.

But it means you cannot do this solo.

Budgeting is horrible to start with if you have been used to all this can't be arsed/I have earned it. I totally get it probably makes you feel sick and it can mean horrible conversations (not necessarily arguments, but it can be easy to fall into defensive mode when you start looking at individual spending patterns on non-essentials).

You have to talk this through (and don't put it off).
You have to agree a plan.
You have to accept you have been living a private jet lifestyle (OK slight exaggeration) but now you have private school fees to pay, you need to cut back to first class. And if you can occasionally cut back to business (or even economy) you would find yourselves in a much more secure position.

I havent read full thread but every suggestion so far you have given reasons why it can't work. What do YOU think you can do? With that salary, there is no way your parents should be loaning you money ...you are all grown up now.
What could you start to cut down on do YOU think?

The whole 'just paying off DH's credit card when he asks' thing would unfortunately have to stop if you're budgeting, as you'd need to be able to account for that somewhere in the budget. So it's basically impossible for him to opt out of budgeting entirely, unless he agrees to live within his own means, i.e. never asking for any additional cash beyond what you already put into the joint account.

Why is your critical illness cover so high?? I earn a similar amount and mine is £30 for 4x my salary.
You’ve forecast parking for 52 weeks of the year but you won’t use that - surely you’ll have weeks off?

I think people are generally missing details in the original post. OP gets a bonus, and this is her instant savings each year. This means that she can generally get away with living month to month on the large take home pay as the bonus provides the buffer most years and should build up to the 6 month safety net over time. OP is just feeling nervous because of an unexpected tax bill, the roof falling in this year along with the start of a commitment to gigantic level of school fees for a 5 year old.
OP, I don't know why insurance didn't cover your roof falling in. I don't know why you were unaware you'd face a tax bill (learn fast so this doesn't surprise you in future) and seriously - please reconsider the specific school you have chosen for your child. It is far more expensive than necessary. Children often move from one private school to another in those early years and it wouldn't be the end of the world if yours did too.
You need to fastidiously save your bonuses from next year onwards because senior school fees will be harder to cover and you need a buffer for those years as well as a general safety net so that you don't have to go to your parents again. Everyone is correct that you also need to address your pension although I understand that it feels impossible with the mountain of school fees ahead of you along with remortgaging at some point no doubt.

No holiday next year and no takeaways, pay your parents back for the car earlier than budgeted and you will be able to get yourself back on track.

I acknowledge that I was initially resistant to change because I guess I felt defensive but I think I’m past that and have been taking on board what everyone is saying. I didn’t like the suggestion that I was financially abusing DH and got a bit sidetracked by that.

Someone suggested earlier that I spend the way I do because I grew up wealthy but I actually come from a poor background (evicted every couple of years poor) and worked incredibly hard at school and in my work to escape poverty. I have made a lot of sacrifices along the way and now earn a lot of money so I tend to think “I deserve all the nice things”. DH grew up with money and it’s his parents that bail us out. He doesn’t seem to have the emotional attachment to money that I do and he hasn’t got that feeling of “I deserve all the nice things” that I do. He was taught financial management growing up and bought his first flat in his twenties with help from his parents. I, on the other hand, have never learned how to manage money, I just spend what I have. If I’m entirely honest, I still don’t really know how mortgages work or pensions work - I just pay what DH says I have to pay and contribute 3% to my pension because I think that was the default. But I all grown up now and my goal for this year is to learn and everything I have read so far has said that I need to budget.

I know that’s not the question you have asked but I thought some background might explain why I was coming across as resistant and perhaps entitled.

My main focus is the personal expenditure as I agree that’s very high and also holidays.

You definitely need to put more into your pension. As a high earner, it makes a massive difference. Even if you can't do it now, make sure that when you next change jobs, you negotiate it in as a part of your overall package.

Between me and my employer we put 17% of my salary into pension (me 5%, emp'er 12%). Everyone else in the company gets a total of 10% (5% emp'ee, 5% emp'er) as no-one appears to have thought to ask (I only know this as I approve company-wide payroll).

P.S. I grew up with two parents who were both care workers, and I earn vast amounts now, so I know where you are coming from.