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 commute to London too - I have started just taking in a packet of noodles and using the hot water tap to 'cook' them in a microwave pot. They are like 40p a day, same with mugshots etc. Saves me time preparing a lunch, and low space in my bag carrying it about. It's what I used to do as an apprentice on £80 a week, so bought this into my 34 year old life to save money. Fed up of spending my money on rubbish meal deals!

I have also found more I eat for lunch, later I stay in the office as I tend to leave when I am hungry. So smaller lunch makes me leave at an earlier time.

You’re under budgeting by calculating based on a 4 week month. You’d need 13 of those to make a full year. You need to multiply weekly cost by 52 and divide by 12 for a calendar month.

I’d start by halving my ‘personal expenditure’ and just make it work. Put the extra £450 into a savings account.

How is it going OP?

That's a very interesting topic as i am restarting the whole budgeting journey myself. I am also a big spender, but when i budget, i do make the changes quiote quickly and it works.
So yeah folks have pretty much said everything. People be defo using all kinds of subscriptions that are literally doing nothing for them in terms of any kind of growth etc. Just spending your time plus you are the one paying the extra on top of it.
The comfort-buys are also a thing.
Education about finances help a lot whatever liek the budget mom on youtube or something.
Since starting the whole budgeting journey ive been over to save up like 10-20% more than i usually did.
The thing is also to not try to cut out everything so you will feel sort of lacks or like feel yourself to be extremely pour lol.
I go sort of with the "is buying this or that really adding to my life's value".

You are frittering so so much money per month! Without being rude I couldn’t believe it when I read it. Owning parents money when you have so so much money is quite frankly ridiculous. You have fall into the trap of you throwing around cash by the look of it.

id do a hard reset. Cancel anything that isn’t a bill so prime, audible, Netflix etc etc. call up your contact lens provider, I’m paying £10 a month. Cancel the cleaner and start cleaning yourself. babysitting, £100 on make up theatre etc are all luxuries.

only 1 month of this will save you enough money to pay off both your credit cards.

you need to have a really hard look at where you are frittering money and what is a want versus a need as you have lots of nice to have wants on this list.

you could have so much in savings by being more careful and reining it in!

Hello OP, haven't RTFT but have read all your responses. Well done on securing such a well-paid job and doing so well. The great thing about a good income is it gives you lots more flexibility to make changes. I haven't ever earned at your level, but I have earned very much more than I do now, but also spent much more unintentionally, because time-poor and more stressed, so 'squandered' money in that sense. I have made much less go much further since really focusing on it and getting much more educated on financial matters, from budgeting to investing.

But what's done is done, no point in blaming oneself! If she hasn't already been suggested, Claer Barrett, FT consumer affairs editor, is brilliant. She has a book - What they don't teach you about money (which you can order from the library, or via BorrowBox if you like audio!) and a podcast. She also does a six week course on personal finance, for about £20, with content delivered to your email.

Ramit Sethi also great - again, lots of ways of getting his content, YouTube, Netflix programme, two books, a podcast. You will have plenty to keep you occupied on your commute!

Please save more into your workplace pension! You are leaving money on the table, as your contributions come out of your gross salary before tax, and your workplace may match your additional contributions.

Good luck.