5 years MFW - Lets get cracking...

The problem is you are not watching the pounds looks like you have always had enough money to do things by avoiding some of the biggies like cars so never really thought about the bigger picture.

Is this 5 year plan that much of a challenge? What about trying for 4 years? or adding university funding(some/all) to the savings plan to get head of the game?

Month to month planning really does not cut it long term, unplanned spends just absorb money. Proper planning looks forward at the spends for the 1/5/10years and has a planned ballance of income == spends/savings including setaside for the unplanned.

Once you have a budget/plan the tracking is just to make sure you are on track and the cash flow is managed through some buffer funds.

That way you detach the income timing from the spends and don't have to worry month to month.

Try doing an annual budget, total income and allocate it to the various things you spend on.

Annual totals can be quite an eye opener when it comes to discretionary spends.

Try adding up the total for takeaways/junk food eating out against the total for food groceries.

it's about choices and understanding the trade offs £2 week day == £10per week == £500per year seems obvious but not many actualy know what they spend the money on at this level.

Longer term, education funding, early retirement the sooner you save for those the sooner you become less dependant on the income levels you are used to and less suseptable to loss of those incomes impacting plans.


What about disaster planning like the loss of one income, what would the budget/plan look like then? What would have to change?

or as above change the 5 year plan to a 4 year and see what would change.

Here is the example I use,

I used to get a large indian takeaway every friday and we had a nice evening in after work, it did friday night and sat lunch.

£20-£25 x 45 weeks a year, £900-£1100,

We cut back to less than one a month and went on a extra holiday.

Thing is we enjoyed the take away a lot more than when we did it every week.

it's not always about not spending but about getting best value.

I think you have to review at least once a year what are my priorities especialy the regular spends like sky/VM, mobiles, utilities etc.

With kids you have to think about more than 1/2 people and think ahead their priorities will change a lot quicker than yours.

Another stratagy is the needs/wants and a priority list of wants, add new wants to the bottom of a list and review the list every now and then.

Never buy spontaniously decide the price for a want and wait for the deal to turn up.
Often a want becomes a don't want if you wait a bit and not another ebay item.

There is a tendancy to just buy the cheap wants and never have enough for the more expensive ones, so if you set aside say £1k a year for wants you can have a few expensive things or loads of cheap stuff or a ballanced mix.

Have a scary sneaky suspicion that I may need to reduce my wine intake!

I've been cutting back for the last month before we go on holiday and one bottle of beer had me feeling merry on Sunday - guess it makes me a cheap date!

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