How do you budget your money as a family?

[Confessionsofashopoholic]

I am determined to get on top of our finances! We are constantly in debt, repaying off short term borrowing such as Klarna, PayPal credit, Next account etc. We get them to zero every month but then are in our overdraft every month, both at close to -£500 each and our joint account isn’t much better either. We have savings around £6k but I just looked at our income and outgoings and I think if we stuck to a strict budget we would probably be able to stay in the green if we budgeted properly. At the moment neither of us budget and every month we can’t afford any extra’s as it were and it something goes wrong, we are having to resort to saving which at £6k isn’t terrible at all but we want to add to it, not keep taking a little here, a little there as over the year that could go very easily.
I don’t want to sound daft but how do you budget? What works? I can keep a budget of my own spending and I could probably monitor the joint account… my husband… he probably won’t keep an eye on his but he’s happy to share his finances, as am I.
How do you do it? Do you use any app? Should we be going through it daily, weekly, monthly? Is there any good banks that have good tools? I really want to make this work, I’m fed up us both working hard and living pay to pay check - stressed!

Print off maybe your last 3 month's bank statements. Then sit down and go through them line by line - what was essential spending and what was frivolous and not needed. That will show your spending patterns and give you knowledge about where you are going wrong.

We have 4 separate bank accounts, plus a number of saving jars.

So 2 of the accounts are our personal accounts, our personal spending money goes there.

1 is the grocery account, where we automatically put an amount for the groceries and day to day spending every week. We used to do this every month but found we would blow the budget about 3/4 into the month.

Finally there is the bills account. All incoming money goes in here and all direct debits leave from here too. When money comes in I put some of it in savings accounts. I have jars for the cat, my child, Christmas, repairs for the house, the dentist etc. The bills account does not have a card! We really try not to pay for stuff from there.

We have done it like this for years and it works. It's much easier to see where the money is going this way.

You would be better off paying off for example £400 of the overdraft and then decreasing the amount. No point having savings with that debt.

Print off statements and work out where the money is going, you may even benefit from a little notebook and write down what you are spending. You shouldn’t be buying anything other than essentials if in debt - Next, Klana etc needs to be for only dire emergency situations eg kids school shoes broke not I want a new outfit. Have a spend free month (only buying essential food, using up store cupboard items where possible, no new clothes or stuff etc) and just see the difference. Many households in in your situation, spending more than they earn by a little each month, just a short period of austerity can give a needed reset

At the start of each pay period I work out what’s coming out each month, any appointments or events.
My salary goes into one account, I make sure that’s got enough for bills plus a buffer of £100. Then I move some to another account to give myself £150 a week for food and fuel. Then an amount to a spending account (hair, brows, clothes etc come out of this) and then everything else to savings.
I have various savings accounts for emergencies, car, pets, holidays, Christmas.

I keep a list of all spends on my phone and check my accounts every couple of days.

You can get apps but we use a spreadsheet. Lines for categories of spending and columns for each month (plus one column at the start showing the budget amount). Then you compare budget with actual to see where you went over for that month, so you can adjust your spending next month.

You need to know where every dollar goes. Check for subscriptions you don't use/need. What can be replaced with a cheaper option? Buy only what you need clothes wise etc.

We use a spreadsheet to categorise spending. It adds up costs over a year for each type, then divides per pay. So we know what to transfer each pay to ensure we're covered all year & can afford to save & spend.

We have several accounts. Everyday, bills, savings, holiday, school fees, etc. It's all auto debited day after payday & is off limits for dipping into. You might find individual discretionary accounts helpful if your DH won't watch his spending. He can only spend what he has in that account & no dipping into joint accounts.

The most important thing is to be on the same page & have goals.

Clear all the debts with the 6k then you're starting from 0. Unless you can't access it?
Then spreadsheet everything to the last penny and every essential. Work out whats left then you both get either half or a percentage of your own spends. We have one joint account and two personal accounts each with an agreed sum to spend as we see fit. Plus a high interest savings account.
The moment you are paid save some. Can set it up as a standing order.

Is there things you can do cheaper? We have £8 phone bills been great. We got rid of sky and subscriptions. We just do 6 months free of say disney or netflix then cancel it.
Reviews the purchases on klarna/next were they really necessary? I get school shoes off next so maybe they are necessary but going forward have a pot saved for school uniform or clothes whatever.
We use vinted for clothes now and mostly just don't get new clothes.

Life doesn't have to be miserable but focus on where you want to spend your money.

Thanks everyone, I really appreciate it and found all the comments very helpful.
I’ve gone through all our spending, food seems to be our biggest spend but it’s a lot of going out to dinner with friends / buying food at work / buying food out on weekends so that we can be better with. I’ve cleared the debts with savings so I can start from £0 and put aside money for 2 x food shops but will not spend anything additional now until after the next pay day so I start fresh. I’ve opened a Monzo account so I can put my ‘Pocket money’ in there, everything in the joint account is any bills / house outgoings and then the Monzo is my own money which I can keep in pots and budget. Annoyingly my husband doesnt want to get involved so I’ve said he can manage his own finances but he can’t touch the joint account. We nearly need to make big changes now as I can see how it could very quickly spiral!

Give every single penny a job! I just assign a reasonable amount to each cost. Break them down and sometimes I have to adapt things but generally this is our budget.
Me 3100
DP 4100
CB 280
Total 7480
Housing
Mortgage: 1900.
Insurances(life, house): 150
Total Housing: 2050
Utilities
Electricity 150
Waste collection: 30
Broadband & TV: 70
Mobile phones x3: 60
Total Utilities: 310
Food & Groceries
Groceries & household food: 500
Dining out / takeaways: 200
Total Food: 700
Transportation
Fuel: 250
Car insurance & tax: 150
Maintenance & NCT: 100
Public transport / Parking: 20
Total Transport: 520
Education & Kids
School books, uniforms, fees: 50
Activities, sports, clubs: 50
Pocket money/treats: 60
Total Kids & Education: 160
Entertainment & Lifestyle
Family outings, hobbies, gifts: 200
Subscriptions, books, etc.: 60
Miscellaneous expenses (haircuts,nails): 60
Personal spends: 200 x 2 = 400
Total Entertainment: 730
Savings & Miscellaneous
Emergency fund / Savings: 2,000
Holidays (monthly allocation): 500
Clothing: 200
Miscellaneous buffer: 300
Total Savings & Misc.: 3,000
TOTAL MONTHLY SPENDING: 7,480

I looked back through cc statements and our bank statements and worked out how much we spend monthly and as a yearly total.

I keep a strict eye on discretionary spending every month and if eg we've been out for dinner more than budgeted for that month we cut back until we're back on track.

I find monitoring it monthly stops it spiralling out of control and you can reign it in before it gets too bad. Works well for us.

I bought the coplenty spreadsheet to track every penny. DH has ADHD so overspends if he gets the chance so he uses cash. I also use an app to track my current account balance at any time/can project future balance if we stick to budget

Well if it’s klarna PayPal and next then you need to stop shopping for a bit, pay them off and then save for what you want

work out what your hourly rate is and ask yourself if that jumpers worth two hours‘ work?

Excel spreadsheet.

Weekly finance check in.

Monthly look at accounts.

The budget needs to cover bills, expenses, irregular spends etc.

Rebel Finance School course.

I really recommend rebel finance school. Its a free 10 week financial course on you tube. The second half is all about long term investing but the fist half is budgeting, money mindset and debt.
Basic principles are:
-Make a £1000 emergency fund
-Go through your spending as above and get rid of unnecessary spending (subscriptions, expensive phone contracts etc) make a budget and stick to it and create a positive 'gap' between income and expenditure.
-Pay off high interest debt (>5%)
-Create a 3-6 month emergency fund.
-They have lots of tools and clever spreadsheets to help you do this.
Then you are ready for long term investing!
The money mindset stuff is great too I think you'll find it helpful
Good luck!

We have a spreadsheet which lists absolutely everything that we spend on, that we re-visit and tweak every couple of months.

When money comes in we allocate a set amount to food shop, personal spends, bills, savings, birthdays, trips away, etc etc.

We have a joint spending account and a joint bills account. The joint spending account has lots of pots (Monzo) which makes it really easy to budget.

I hate the thought of frittering money away. I check the spending account every day.

It might be better for you to clear the debt as a priority, than start to build an emergency savings pot. Start with £1000 then build up to 3-6 months worth of living costs. We have done this and it brings so much security.

I have about £900 after all bills, for me and ds(17).

I avoid all other costs unless absolutely necessary. That means

no coffees out
no eating out
take my lunch to work
no subscriptions
no paid parking
always buy petrol at the least expensive site.
Never go to motorway services etc

Outside of that, everything is budgeted for - birthday presents & Christmas, clothes, redecoration, house repairs. All food is meal planned so there is no waste. No casual buys. I've just checked our warm clothes and identified what we need for the next six months

Really tight cost control is the way to go.

DH is terrible with money and earns about half of what I do so I pay most of the bills. He pays Supermarket shop, mobile, TV licence and his own hobbies and clothes and I pay for my own hobbies and all the other bills, cars and mortgage. I have a spreadsheet of the outgoings.

When going out I pay for two out of four meals, DH pays for one and Uni student with own income DD pays for one so typically I pay for one meal a fortnight, he pays for one a month. We don’t do Deliveroo as he cooks so well. I put money into a savings account pot for holidays, house maintenance, DD’s future and DH will pay for trips and taxis for holidays and will do household DIY when I buy the materials. Our motto is ‘we make a great team’.

We do not have a joint bank account and never have. I use the ‘spaces’ in Starling banking app to save for holidays etc I am fortunate I can usually afford to over estimate a holiday cost and so periodically put money into other savings. Recently had to draw on those savings to £7k insurance claim didn’t cover cost of what needed doing.

Final word - don’t forget about charity. For some reason the more I give the more I seem to have left over! Karma maybe???

OP, lunch is an easy place to save. I make my own hummus, or take leftovers. It saves £6 a day, my costs might be £1 a day, so savings of £100 a month or £1200 a year.

Two of you = £2400 a year.

And home made food normally tastes better..

All income in one pot

all bills out just after pay day

a separate saving account for irregular bills like insurance and car repairs or termly bills like kids classes - put money in there straight after pay day and it’s only used for the listed items that you previously agreed. So if last years car service was £400, save 50 a month towards service costs

the only “authorised” card spending then is food at the supermarket and transport

and an allowance each for general spending in cash - once it’s gone it’s gone ( you can allow the same for each child if they are too young to be buying their own clothes and cinemas tickets )

and save the rest

before that
analyse your spending patterns with a giant spreadsheet
go through the supermarket bills - meat, veg, junk, alcohol, household, ….