budgeting......

Yategirl · 4 June 2005 at 7:42PM

We have finally decided after working through our accounts and budgets etc.. that we can afford for me to stay at home rather than go back to work following my maternity leave

I want to be careful with our money and make sure that we put some aside each month for long-term bills and christmas etc... so I have decided to use the "envelope" system (or similar) where we seperate our money out into the budgeted amounts each payday....

so my question is - if you do this, did you just pick a month and start from there? or did you gradually build up?

Are there any tips you can offer me on using this method?

Thanks!

spendaholic · 4 June 2005 at 7:48PM

That's good news about not having to go back to work. I'm sure someone will jump in soon with feedback on that system - and I'll watch and learn too.

Bogof_Babe · 4 June 2005 at 7:55PM

Most if not all the utility companies prefer direct debit nowadays, and will usually make a discount for you signing up to it. That would be my first suggestion, then you know exactly how much is definitely going out each month, and how much you have left for variables.

Then disregard the direct debit total - it isn't yours to play with, and try to work out a realistic weekly food/petrol/entertainment/extras budget (including a decent chunk for all the baby expenses).

Once you know what is left, that is your Christmas/holiday money. Get it transferred into a high interest account or ISA.

Congratulations on your forthcoming arrival, and I am so pleased for you that you can stay at home to bring him/her up. Well done for organizing your finances accordingly!

Queenie · 4 June 2005 at 7:58PM

When I first took over the budget from dh (Mr Credit on legs!) .... I began by seeing how much our "annual" payments were and dividing those by 12 so I knew how much I needed to save month towards each "annual" expense. (started from that month)

I couldn't make a silk purse out of a sow's ear, so I had to begin with a "rolling" amount; in other words, by the time I had calculated the annual payments over 12 months then logged which month each one came from, I was able to then pay only the 1st one from the accrued amount. By the time the 2nd one came along, I could then draw some from the "savings" I'd put away and I had to top it up from the monthly budget. It was hard for the first 6 mths and meant much cutting back .. but then everything began to fall into place. The first Christmas we had to be quite severe .. but that didn't *feel* too bad, because we knew that, in another 12mths all things would work out even - it only felt severe because we had to accrue some of the long term amounts first.

The most valuable tip I could ever give you is ... FOCUS!! It's hard to begin, it's hard to remain committed, but I can only promise you that it does all fall into place eventually.

Have you considered posting this in the Budgets Forum? They may be able to give you more specific advice on how to set it all up?

Either way, I wish you luck ... it *does* work!!!!!

Katgoddess · 4 June 2005 at 8:19PM

ING have a decent savings account that lets you have up to 10 pots for your money. I have found this a great help. They give a good amount of interest. Not as much as an ISA, but good enough for the convience of having different pots for car/holiday/christmas etc.

There is a link in this article that will help this site:

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1098730527,15721,

The budget forum will help you a lot with this. Take part in our old style challenges to help you stick to your budget!

Chipps · 4 June 2005 at 10:02PM

We don't use literal envelopes, but put each month's bill money away in a savings account - but I have a worksheet where I write down how much money is in each section, when it needs to come out & how much is in there. It is probably possible to do this on some kind of spreadsheet if you have the skills, but I dont!
Also, if we use the credit card for anything, the money goes in that account so it is there when the bill comes in. When a bill is paid, I review the monthly amount for that bill to make sure it is enough for the next time. It sounds like a lot of work, and it was in the beginning to set it all up, but has really made life easier in the long term. It is always good to know the money is there to pay essential bills, even if the main bank account looks pretty bare!
I have stayed home with our children, & we live on a fairly low income - so it can be done!

moggins · 4 June 2005 at 10:41PM

I don't usually advocate spending money when you're trying to save it but in this case (and for every other woman who would rather stay home with her children) I will just say the best tenner I ever spent was on a book called "The Smart Woman's Guide to Staying at Home" written by Melissa Hill, mainly because there's a lot more involved in staying at home with your children than just a loss of income. This book does help deal with the loss of income too though.

squeaky · 4 June 2005 at 11:01PM

I just looked this book up at Amazon and it's priced used at from £4.55 as of today's date.

Here

Yategirl · 5 June 2005 at 9:23AM

Thanks Moggins and Squeakly for the book info - I will see if the local library can get it for me first so I can have a look before I buy!

Thanks everyone for your advice - I have sorted out a spreadsheet so I can keep track and worked out how to do it(!) - it will be hard at first I realise until we have got into the swing of it and started to keep money aside - but I know we can do it!!

I'll keep looking here for all the good advice! Becca

patchwork_cat · 5 June 2005 at 10:24AM

We don't use envelopes, either, but we bank online.

We have web savers for Christmas, Clothes ( as I find that this is seasonal).

We have a seperate bank account for bills.

We have STO going to each account just after pay day.

Yes we just picked a month and started from then. For christmas for the first year work out a budget and divide by remaining months. I also use the christmas account for children's birthdays.

soon2bjobless · 5 June 2005 at 4:09PM

I have been running my Freedom account (an American system) now for over 2 years and it makes my budgeting a lot smoother.

Basically - I have everything I need to pay on direct debit and leave all that in my current account (I work it monthly as I always got paid monthly). I take my housekeeping money out (for groceries etc) and have that in a purse.

When I started I figured out how much for things like car ins etc and divided these figures by 12

My accounts in this stage are....

Birthdays
Christmas
Car ins
Car road tax

I transfer this amount to my internet saver account linked to my current account but list them on a spreasheet so I know how much is in each one.

Then whats left I divide up into the following accounts...

Clothes
Holidays
Repairs
Decorating/Household
Entertainment
Car repairs/petrol
Emergencys

Again, this is all put in my internet saver account and listed on the spreadsheet.

At first I could only afford to put a couple of quid in each of these accounts as I needed to build up the Birthdays etc accounts but eventually got it going.

I always keep a total of each account in my purse - that way when I am out and see say a clothes bargain - I can see how much I have in that account to spend. When I get back I note it on the spreadsheet and transfer the money to my current account.

If I see any great bargains I can borrow between accounts if I dont have enough in one.

I love it now - to me its called the Freedom account as you know you are free to spend the amounts in each category as you know you have all those irregular bills covered.

Good luck!

PLEASE READ BEFORE POSTING

budgeting......

Comments

Confirm your email address to Create Threads and Reply

🚀 Getting Started

Categories

Is this how you want to be seen?

Get our FREE Weekly email full of deals & guides - and it’s spam-free