Budgeting when some income is self employed.

[StarsShineBrightly]

I think I've screwed up but won't know for sure until later in the week.

I've earned better than I thought in my self employed role. I don't know what my tax bill is going to be, but I'm pretty sure I've not saved enough for hmrc in Jan. Fuck.

It's left me looking at how we spend our cash and how I don't have enough because we don't live within our means. I pay off our credit card each month and the rest goes to save for tax... but it's not going to be enough.

Tried to discuss with DH whose solution is to move house. I can't face that right now, it feels drastic and I think the there are surely other things to try first such as budgeting and at least trying to live within our means.

This means cutting down our spending. So I've been looking at what we've been spending on.

I think the biggest problem is that we're disorganised and keep buying food and snacks. I think we need to do a proper budget but I've no idea where to start. He tells me it's not possible to reduce this by much, but we're spending on average £1500 a month on food. We're a family of 4 in southeast.

Our other problem is impulsive spending. DH and DD do most of the shopping and are both impulsive. Plus DH can't say no. This is mainly food shopping but whenever they go out they come back with something extra that is not necessary.

How on earth do I get others in my family to stick to a budget and how do others budget around food? We've never been on the same page with finances and I've taken my eye off the ball. I think I've just tried to earn to manage his spending, but I'm at breaking point and this strategy is clearly not working!

If you're spending £1500 pm on food you can cut that significantly if you need to.

DH needs to grow up and stick to the budget.

Impulse spending and extras/luxury versions are way down the list of priorities. Certainly after your tax bill and other essentials like emergency fund, pension and sinking funds for annual/irregular essentials like insurance or car servicing etc.

Can you split money into pots so he can see what needs to cover bills, essential food, tax, savings etc and what's left over for spending on a 'when it's gone, it's gone until next month' basis?

Yes, i think cutting this outgoing is reasonable.

I'm just not sure what is a reasonable amount for food.

Pots isn't going to be very easy, although I like the idea. We need a starting point.

Stopping takeaways and looking for high snack days and managing those differently is where I'm starting.

We do this:

Family of four -

No meals out/takeaways except on occasions (birthdays, holidays etc). Birthday celebrations will often include having a more special meal at home (Eg. Steak).

Snacks are bought in the food shop but when they're gone, they're gone. Everyone takes a pack lunch unless there's no time to make it 😂

We take a flask of coffee and a picnic if going out anywhere, like old people 😂

Shop in different supermarkets on rotation and try to get the best deals in each one. Always look for yellow sticker reductions and freeze anything you can't use immediately.

Online food shops reduce the impulse buying because you just get what's on the list. Buy in bulk where possible- Eg rice/pasta. Buy big packs of mince, make a large spag Bol/chilli and then freeze the leftovers for another day.

We spend roughly £100 per week on food. Sometimes it's more if buying alcohol but we've cut that right down too.

Moving would be a bit extreme.

For the tax, once you've submitted your tax return, you should be able to request a payment plan if you can't pay it all on time. Pay what you can upfront as you'll get charged interest on the late payment. If you have access to your HMRC online account (and if you don't, I'd recommend setting it up, much easier than trying to call HMRC), you should be able to request the payment plan through your account.

We're a family of three (teen boys who eat a lot) and I budget about £550 a month, shop mainly in Sainsbury's with top ups at co-op and Waitrose, I do look for offers but I don't really scrimp.

The two things I do, are

1. have a spreadsheet of all outgoings and work out a reasonable budget for the non fixed costs, I also pay a monthly amount for my tax to HMRC so I only have a bit to pay at 31 jan.
2. use starling bank account with the online pots and have virtual cards for certain expenses like food so I can see how much I have left. I split the money into household bills, food, mortgage, kids, holidays, car, tax, Christmas etc.

Can't help with getting DH buy-in as XH never showed any interest in the bills/shopping so I did it all. We had our own personal bank accounts and transferred money into a joint one for bills.

Also I meal plan which helps avoid wasting food.

The easiest way we find to limit our spending is to pay ourselves a weekly allowance. A month is too long a time, too easy to lose track and overspend.

Our food budget is £200 a week for a family of 5. We pay that into a separate account on a Monday and once it's gone, it's gone.

If we do well over the week we splurge on a takeaway on a Saturday night, or buy expensive steaks or whatever for Sunday lunch. If we piss it up the wall and have a takeaway on Monday, don't meal plan properly and are 'skint' by Thursday...well, we have a leaner three days until our next allowance on Monday.

Generally though, we eat very well on £200 a week and it seems plenty...and that's 5 of us, two of whom are hulking teen boys.

I really appreciate the replies as I'm so upset about this.

DH really enjoys shopping and cooking, however budgeting is not something he finds easy.

I've tried to suggest online shopping and getting into a weekly routine and food planning, but he said we didn't stick to it. I'm trying to get him to go back to it, but he is quite resistant and I'm not sure why. This would avoid the impulse buying but it requires forward planning and he prefers to just go in and buy what he fancies.

So if we aim for £150 a week that sounds reasonable.

Those that meal plan, do you plan in snacks as well. We find that whatever snacks we buy are gone really quickly. So we may need to adopt a once it's gone, it's gone policy. At the moment we just buy more.

I like the weekly budget in a separate account idea. Simple and effective to make DH stop spending on shite.

The more complex version is to use YNAB which is an app.

You enter all your income and then assign every single penny to a category / pot.

So firstly I syphon off mortgage, utilities, savings and tax. Also petrol.

Then amounts for annual bills eg insurance / MOT & Service / Christmas / amount for kids clothes

Then discretionary monthly bills eg TV subscriptions / cleaner / kids hobbies / school dinners /

Then monthly spends for food, top up shops, eating out, entertainment etc

Suddenly makes a big income number look very very small!! When you realise how much is already committed you are much, much more careful with the meagre amount that's left in the food / fun budget.

Then You link it to all your accounts / credit cards and it brings in all the transactions and you assign them to the relevant category and watch your remaining eg food budget reduce.

Ideally, when that pot is empty, you either don't buy the next thing OR you trade eg cancel the next takeaway to pay for an overspend somewhere else.

It's absolutely changed the way we manage our money and we are so much more comfortable as a result.

I meal plan and I include snacks in as much as I buy enough of a variety and once they’re gone that’s it. There’s always fruit and yoghurt available if need be when more treat like snacks are gone.

For three of us I’ll buy a multi pack of crisps, Kit Kat type biscuits, plain popcorn, crackers and soft cheese along with 5 minute noodles, pepperami. There’s always carrots and peppers for veg strips.

There will usually be crisps and biscuits left at the end of the week so I’ll buy a bit less the next week.

How do you not know what your tax bill is for January? You should have done your self assessment and put it in as HMRC works a year behind.

So the money ive earn since April 24 is not going to be taxed until Jan 26 and I already have the bill for January 24

If you can't pay the money can you have it taken out of your wages from the non self employed part? Or have I read that wrong?

I feed 4 at the dinner table 4 nights a week and 3 the other 3 nights a week, this is two courses so main and pudding - breakfast for everyone and this is a selection of meats, cheese, toast jams and frozen croissants - I'm spending under £90 per week. Only lunch for me though but I usually pop one bottle of wine in the trolley and have guests on Sunday for a roast dinner and pudding. I'm shopping at Lidl though for everything.

The 23/24 tax return and payment isn't due to HMRC until 31st Jan 2025. It's not ideal, but the majority of people leave it late. And the OP said she'd earned more this year so probably hasn't had payments on account, or they've not been high enough.

Get the tax return done asap so at least you know how bad it is.

Thanks everyone.

I'd budgeted based on previous years and I haven't submitted yet as I was waiting for my accountant to get back to me regarding a question. So I roughly know because I've seen my accounts and my income is higher than expected. Eye has been off the ball for various reasons.

My question was more about living within our means. The self employed income was always supposed to be for a little top up to finances and extra for nice things. It's turned into necessity because of how we're spending and that's what I need help with. Both our salaried incomes have increased so really we should be comfortable.

We have roughly 2k available after mortgage and monthly bills. So out of that 2k we have to manage food, petrol, going out, clothes. That's not including the self employed income. People manage on a lot less. So we can certainly do better.

Having an idea on what others spend on food has been really helpful. I'd really just handed this over to DH to manage, but I'm going to have to get more involved to get the costs down.