How to change family finances and reduce unnecessary spending

[Ryeman]

DH and I earn well (approx £110k between us) and on paper I think that should afford us a fairly lavish lifestyle but I really have to watch my spending because I think we (mainly DH) fritter it away on the wrong things. We don't go on foreign holidays, I buy all clothes etc on vinted, always searching for a bargain at the supermarket. I'd love a bit more financial freedom but also be able to build up some savings. I've suggested to DH that we change how we split our finances - that we get our salaries paid into the joint account and each draw an allowance. I think that way we wouldn't burn through our money so quickly and we'd be more conscious of what we spend it on. DH isn't keen though (I think he's a lot more spendy than me). Currently we pay a proportion of our salaries into the joint account for bills etc and the rest is our own. Which is the better way of doing it, do you think?

The better way to save up together is to leave more in the joint account and only take a certain amount out for individual spending.

However, if saving is not your goal, and being completely free to spend every last penny that isn't accounted for by bills etc then obviously just putting in the money required is the way to go.

We do the first option because we don't like spending for the sake of it, but some may find this controlling if both partners aren't on board.

The easiest way to manage and budget is to have both salaries paid into a joint account and then allocate funds out. You each get an allowance paid to your open account. A portion goes to joint savings and whatever is needed to cover mortgage, bills etc stays in the joint account.

The effect of moving your contribution into a joint bills account and spending what is left vs everything into a joint account and taking an allowance is likely to leave you with the same amount of money for personal spending, so that's not what you need to look at here.

Of course your DH wants to carry on spending as he likes, but the music is going to stop one day isn't it? And it's quite irresponsible to carry on like that and then he might regret spending every penny he had available to him.

It's also selfish and unfair of him to take a bigger share of the free spending money, for himself, because that's what's likely to be happening here, especially while it sounds like it's you that's boosting the family disposable income by implementing the cost cutting measures you talk about. Why do his wants trump everyone else's?

What are your pensions like? If you don't have decent pensions you're either going to have to work forever, or have a very poor retirement (unless you receive an inheritance or release money by downsizing).

How do you fund large purchases like cars or home improvements? Ideally these should be saved for, so you don't end up in debt.

What if one of you loses an income? Will you be able to pay your bills on one salary for a while?

Do you have DC that will go to university? If so, you will need to contribute hundreds of pounds a month towards this, do you have savings or spare income available?

As for what sort of lifestyle you should be able to afford on £110k, that depends on your essential costs and how much disposable income you have left over. But it's quite likely that it doesn't allow you to spend freely all the time, especially if your wants last longer than the money available.

You could review your budget to see if you can cut any costs to free up more money to save and/or spend.

You could also go through the financial flow chart together which is a 'to do list' for managing your money and starts with setting a basic budget, building in some stability and spending modestly, then when you're in a better place with pensions, savings and paying down your mortgage, talks about spending more freely.

Have a look at:

https://www.moneysavingexpert.com/family/money-help/ and

https://ukpersonal.finance/flowchart/ (just skip any steps that are irrelevant such as applying for benefits or getting out of debt if you don't have any non mortgage debt).

The first step is to monitor for a month what you're actually spending on. Then make a realistic budget based on that. If you're spending £700 a month on groceries there's no point suddenly trying to budget £300.

Factor in EVERYTHING to your budget. Personal spends. Savings. Sinking funds for Christmas, birthdays, holidays, car insurance and other annual bills. Specific savings for when the washing machine packs up and you need a new one.

Do you know how much you spend each month and on what?
Do you have savings?

It was like this with my ex. I was cutting back all over the place and he spent what he liked including dipping into the joint cc for things that were meant to be personal spends.

We split and I had more money than before even being on my own with 2 children and getting minimal maintenance!

Not suggesting you split but nothing worked, even if you implement the same spends he will probably just run up overdraft / cc bill unless he is onboard with the less spending.

We get paid at the end of the month.
On the first of the month, money goes into savings. What is left is for spending. If you put, say, £500 (yes, I know it's a lot, but you have a heafty income) into a savings account just after being paid, would the lower balance stop you spending? Or do you spend without knowing how much is left?

My husband and I are also opposite when it comes to attitude on money. He is more spendy while I am very into saving. In our case, when we still had our mortgage, I included massive overpayment into our monthly bills. I also include saving for our daughter into monthly bills as well and increase it every year. Money for the bills go into the joint account and we save individually. I definitely save much more than him 😊

If you would like him to be less spendy and build "joint" saving, you could include saving allocation in the monthly bills and treat them as normal bills. You can call this holiday saving to persuade your husband to get on board.

I do allocate budget, though; and try hard to stick to it e.g. groceries about 110/month, eating out 200/month. Although we do end up slightly over the budget every month but it is still "acceptable" to me as I could still save.

You don't say much, apart from how much you earn gross. Big mortgage, kids, cars, debt, credit cards?