Monthly income tips to budget?

[Wingingitnancy]

You will probably laugh at this question as i might sound dumb. But I'm just after some of your guidance and practical tips to make things run smoother and what works for you.

Our bills go out over the month, i tried to pop them on the same date but was told they have set dates and none coincide with payday.
I use to get paid every couple of weeks and that worked well.
I am now in a new role and it's monthly pay.

How do you budget and get your money to trickle nicely over the course of a month? I do have one account everything goes in and out of and another account I transfer money in to keep a bit a side.

I have that nasty habit of seeing money there and thinking "oh we're ok, I'll grab that extra thing" then struggling last week of the month.

I know it probably sounds obvious but whatever my financial habits are and what I'm doing isn't working.

I have account 1 where money goes in (I then leave the bill money plus £50 in this account and transfer out everything else). The £50 builds up to pay those annual bills tv license, house insurance etc
The money then is divided by 3 accounts 1 is savings, 2 is a savings account for my monthly spends (more a holding account) and 3 is my everyday spending account. Every week I transfer the money for the week from account 2, into account 3.
I think to do it well you need to know your budget and if possible allow for the extras so your not going to run short. My money comes in in dribs and drabs from different sources (ill health pension, disability benefits) and so it was a juggle at first but now I know that over the month it will be enough if I strictly stick to the budget.

In one account work out the total of monthly direct debits then keep that amount plus an extra hundred in the account so there is always enough to cover them. Then transfer anything left over in a separate account and use this for day to day spending, shopping etc. You will know anything in the second account has to get you through the month, so mentally sit it into 4 to know roughly what you have to spend each week, but also know all of your direct debits are going to be paid from your first account.

If you are impulsive and can’t see to the end of the month numbers wise then leave the money in the account for your set bills and open another account and use that for day to day spending. Then rather than seeing 2k on your balance but not knowing how much will come off that for bills you can just see it’s £700 and that has to last X weeks.
Most banking apps will also let see your remaining funds after direct debits until your next pay dates, but if you’re new to budgeting a separate account entirely is the easiest way.

This is my bag. What date is your payday? Set as many of the DDs you can 5 days after this date (for weekend/ bank holidays). IE, My payday is the 28th and set all payments to go out on the 1st.

Which supplier is advising you cannot change the DD date? I've never had an issue with any of mine. The only one that I can think that may be an issue would be mortgage or rent.

All DDs go out of a separate account (preferably one with cashback). Income comes into spending account (again hopefully with cashback), standing order goes to DD account to cover those payments out and standing order to savings leaving a set sum in spending/ current account for monhtly spends.

Separate accounts (or pots in the same account) is key.

Bills account for DDs that is not touched day to day. That money is not available to spend so don't even look
On payday move an amount to a savings account for annual and irregular expenses like Christmas, insurance, holidays etc. This will be quite a lot of money (hundreds of £ pm unless you're on a low income). You can't spend that money day to day either only on the things it's there to cover.

Should probably also have other savings to cover loss of income or perhaps saving for big purchases like home improvements or car replacement.

Another account for regular essentials like grocery shopping, petrol/public transport and anything else essential that you buy most weeks/months

Once all the above is covered, what's left can be moved to another account for your personal non essential spending.

You can set up standing orders to automatically move all the money or else you might prefer to do it manually if the amounts available might differ. Then you just need to check that each account has the right amount of money in - not too much and not too little either.

For comprehensive advice on setting a budget and minimising costs because this will increase your disposable income can be found on MSE

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

I have a spreadsheet with everything that is going to come out included and then I update as things come out. I know whatever is left is free to be spent but i usually do a rough budget so i know how much is free.

I have a bills account, and cut the card up. So we move money in to cover all the bills, then direct debits come out. We don't touch the money in there.

We have another account with a card which money gets moved in for our food shopping for the month, and we split the total into 4 for each week of the month (ish)

Our spending money is sent to separate accounts for us to spend how we want

I would recommend YNAB.
I started using it a year ago and have gone from spending everything each month, to actually having savings.

Lots of people are able to do the same thing with a spreadsheet they create, but YNAB will connect to your bank and make you account for every penny.

It is the best thing I've done for my financial stability and I feel in control of my money for the first time. Wish I'd done it 20 years ago!

My main advice is you need to try to schedule all those extra things, reduce impulse purchases. One way it to transfer the extra money into an account to build up for "extra things" in the future and not use your normal account

One account for all bills and have them coming out as close to payday as possible - for us this is within about ten days as some companies won’t move them.
Second account for everything else. Have sub accounts for food and petrol, fun spending, yearly costs and savings

Thank you everyone 🥰 payday was today, so I've added all the bills this month and added 100 buffer and left in account where bills come out. I've transferred excess to another account and got the card out to use that one for groceries and bits.

So essentially swapped the cards/accounts around and readjusted things with your suggestions. Hoping it works. I will start savings but after I've seen this in action over next couple weeks to then scrutinise the spending habits away from bills :)

I have one account that the direct debits and standing orders go out of, then all other money goes to my chase account and is divided up into 9 different pots, ie holidays, birthdays, entertainment, food, fuel etc. this seems to work really well and I've only started doing it this way over the last couple of years, i think I sat down and worked out how much needs to go into each pot per month.

Good start, OP. We have two joint accounts- dhs money goes in one and mine in the other, but the money is both of ours.

We then have all dds set up to come out of one of those accounts, and we do all day to day spending out of the other. So bar checking 1x a month that all the dds are on track, we then only need to monitor spend on the other account.

Once a week I list all transactions in a spreadsheet (could probs do a download direct from the bank). I give everything a category, then a little formula adds up all spend across the month in that category. Then I save a copy of it so I can see each month what is spent in what area.

Just a little update.

It's been 2 weeks using plum and with the changed payment methods.

It's going well. I haven't put money into savings yet, but using the transaction round up i have saved 60 so far. So hopefully that means 120 saved by end of month that I'm not aware off then when I add the usual savings amount I would be saving around 250-300 Bills are ticking along nicely and I've had no panic yet which i normally have by now.
All credit cards are also paid off. I'm surprised how adjusting how I manage the money has put us in a much better position.

Unfortunately summer will be challenging though as my DH is having an operation so will be off work for 4 months 😭😭😭 so trying to save and be super strict to get through that period before two incomes again.

Thank you everyone.

That’s a great update. I came on to recommend using an app like Toshl. The difference is that it makes you think over the year. So you have, for example, a birthday pot and you put in £20 a month, and then when the birthdays happen you can see how much is in the potto spend over the year. I found it brilliant for keeping me on track. So I didn’t have £700 left to spend in the month, I had £799 minus the birthday, Christmas, savings, car repairs etc pots….