Cutting back / budgeting

[TaupePanda]

I would love to hear from others interesting / different ways they have cut back / budgeted better. And, if people don't mind me asking, how much do you keep for yourselves each month? As in what is your personal spending month.

For context:

Our family outgoings including rent, utilities, childcare, car insurance, internet and main food shopping comes to about £4600. I put £1900 in and my husband the other £2700 - this is relatively proportionate to our incomes (I work 3 days a week).

Rent and childcare are the bulk of that and are average for the area (we live in a very usual 3 bed terraced house, with the world's smallest garden). Moving away is regularly discussed but for our mental wellbeing I don't think we can - everyone we know in the city is here, our eldest goes to school here and my youngest loves his preschool.

Food bills are high despite being vegetarian - my two each like adults! Plus WFH means we are having lunches, teas and coffees at home so the main bill is higher. That said, we are't buying out so much so that must be balancing out.

We do not have subscriptions - no spotify, netflix etc... and we are lucky to have access to a family-owned bungalow near a beach where we go for holidays. The cost is nominal to cover elec used etc and then we buy food and trips - each hol comes in at around £400, I'd say, and we do that around 3 times a year. So, £100 a month.

I feel like we are quite frugal. We own our car and will drive that into the ground (its pretty new anyway so got a few years left). We never go on other holidays, for financial and environmental reasons. We don't buy many 'things' - we aren't that kind of people.

And yet, neither of us feel like we have much spare cash to put aside more each month. Pensions are starting to play on my mind - I get the basic from work and am part time so its an absolute pittance. I top it up but I don't think I am saving fast enough.

I just can't see where we can scale back, if I am honest. Yet, we must be losing money somewhere if we are maxed out every month. What am I missing?!!

Best thing to do is write down all your actual outgoings over a period of time, not what you think you spend, what you actually spend & study that.

Other people's outgoings aren't going to help you.

We had a huge budget overhaul about 2 months ago as our mortgage increased and we are renovating our house. I use the snoop app which links to your accounts and groups your spending so you can see where money is going. Meal planning has drastically reduced our food bills as has getting a chest freezer so we can batch cook or pick up reduced food to save for another day. We have a revolut card that we put our going out for meals & drinks money on and don't go over this. We have our own spends for clothes, shoes, family birthdays. It seems to be working well for us and even though we are saving a good chunk each month and the mortgage has increased I don't feel like we are going without

Get a proper budget drawn up, MSE have a good one that has loads of categories on it.
Rent and childcare are probably the ones you can't do much about, but everything else can be scrutinised and checked against average values
For example food is about £50 per adult per week
My gas and electric provider tells me the average cost per month for a house like mine and so does my water provider
Clothes are variable but many people can go a year without buying new clothes and shoes only if utterly necessary
Cut down on gifts to other people and also to the kids on birthdays

Are you accounting for stuff that doesn't necessarily has to be paid every month but that over a year you have to or choose to spend? Clothes, dental treatment, new tyres, MOT, Christmas, birthdays, haircuts, new clothes, replacing technology and household goods, holidays.

My budget without those things would give the illusion of a lot more disposable income than in reality. We put away around £1.5k more a month than our on-paper monthly outgoings to cover all of the above stuff. If you aren't accounting for any of that and then have to find money out of your disposable income for it all, then it'll feel like you're never prepared and you won't know how much spare money you actually have.

Forgot to say, when you don't account for expected but irregular expenses then you end up with peak and trough months. Some months where you're absolutely skint (December for instance!) and other months where it feels like you're flush. In reality, for most people having an even cash flow is preferable, so every month works out somewhere in the middle.

Thanks all. I think the expected but irregular spending is probably where we fall down. In my mind those are low - the boys have slightly older cousins and we get lors of hand me downs - we haven't bought new clothes in ages. But shoes seem to last all of a month at a time so those should be factored in.
We'd love to bulk prepare food but we have a tiny fridge and only place to put a chest freezer is in the living room so I don't think that is practical right now.
Back to the spreadsheet I go, to start looking at 'other' spending

If your rent and childcare are high, that could account for a lot of it. The childcare at least will reduce significantly when your DC are at school, so that will help a lot.

You must both be on fairly decent salaries if that's your contributions to your household expenses, how much are you keeping back for yourselves?

But you need to review what you are spending. Your bank and credit card accounts will have this information so look at this for the last year if possible. You could well be spending more than you think in some areas.

It's possible to eat very cheaply as vegetarians, so your food bills shouldn't be high and DC who are an age that require very high childcare bills shouldn't also be going through adult quantities of food, it's likely to be one or the other.

But without any detail about where your money is going, it's impossible to say where you could cut back, but it could well be that you are spending a lot on some areas and there could be scope to cut back if you really wanted to or indeed had to.

But as a start, how much are you spending on groceries a month, how much is your broadband, phones and gas and electricity?

Could you fit a fridge freezer in your kitchen?

It's been really useful, thanks ladies.
We've done a breakdown of our costs and have started identifying where we are spending more than I realised - haircuts across family comes in at £350 in a year 😵who knew!
We still can't find places to cut back on our core expenses - our rent is £2k and our childcare is £1550, which covers 4 days of preschool (£800 p/m with 30hrs funded), 3 days of afterschool club (£150) drama, swimming and football clubs for the pair of them (£150) and speech therapy (£450) for my eldest who has verbal dyspraxia. That is a cost that we absolutely can't cut and only ever seems to go up!
Then our water is £40, utilities are £70 (we have solar panels), council tax is £190, Internet is £30, husbands mobile is £20 (mine is paid by work), gym is £20 each and the rest is food. My two will eat as much as adults - my husband is very tall and both the boys are significantly bigger than an average child of their ages. My youngest is 3 and is taller than some of my 5 year olds' friends. They are also very active - bike riding, hiking etc... and they just eat like they are starved at every meal.
I think the reality is that we have high outgoings and we probably need to just wait it out until DS2 goes to school next year and we save on preschool fees which will release quite a bit of money and can be diverted.

It sounds like you're getting a better handle on your outgoings OP 🙂. And you're right, your rent and childcare are very high - I didn't check, but these must be a big proportion of your income.

Can you increase your hours at work at some point?

Proportionately, we both put two thirds of our income into our shared account. I then put £500 into my pension, and then rest I use up. That's £700 for me and ut feels like a lot of personal money. But I think in reality I actually spend a lot of that on unaccounted for things and we actually need to put more into our shared account. For example, I've just bought new shoes for both the boys (£60 and unavoidable - kids feet just constantly grow) and we've discovered moths have munched our duvets quite severely over the summer so 3 new ones have come in at another £250. So I'm immediately down half that money.
We've found we haven't been factoring in the cost of my eldest's occupational therapy which has done wonders for him. But that is £600 a month, which my husband covers. Not a cost we'd ever cut but its a lot when we also pay for speech therapy.
So we basically have less spare money then we realise. I can't work more hours as my eldest needs shipping about to various appointments. I think now we've sat and had a think, the situation probably is what is and we'll have to just accept it.

If you have a DC with additional needs, is he entitled to DLA? That would help with the cost.

DH and I have the same amount of personal spends per month (£75), but it really is only for personal spends. And if we want something more expensive, we just have to save up for it.

Good luck, hopefully things will ease off for you soon.

Those are expensive duvets. £75 each.

I would suggest a bank account like starling or monzo to track your spending.

I suspect it’s the over £1k a month on therapies for your children. I don’t want to suggest cutting it out. Is it possible for you to reduce the amount of time you use and do more ‘homework’. DD1 physio has a plan of daily exercises and a list of other suggested activties to help.

£250 for 3 duvets? That’s pretty expensive you could have spent half that.