Couple in ok jobs,no debts..no way to save,where are we going wrong with our budget?!

mickym

This weekend my fiancee and I went on another house viewing to rent.

We have decided to go down the rental path as we thought we could save what we would be paying out on a mortgage (approx £1050) and put it towards a larger deposit, when the housing market becomes more stable.

Estimated rent £695 per month on a 3 bedroom semi.

We have a combined income of £41,000 a year.

No debts...yet going through the budget planner this weekend, we only seem to be having £160 per month left over to save,and thats based on the £695 per month rent rather than the £1050.

We were looking to be saving at least £500 per month.

Im happy to put the budget plan on here for you to take a look at.

Are we being silly in some of our estimates? Or simply a fact that we dont earn enough?!

We are looking to start a family soon too, so want to budget corrctly as we would not want to go into debt.

Heres our budget planner.

http://www.adrive.com/public/9684961e20760daf2ed4d881353aee2f3eac83f871aec887317153781b6e9846.html

skintbutsmiling01

hiya- and at least you earn more than you spend! And no debts!
I'm not an expert but I think you may need to break it down into more details, eg insurnace, petrol, utilities etc, so you can see exactly were every penny is going. Also, the "big one offs" what are these- do you spend this every month or is this one big thing divided monthly?

beer_tins

You spend 2,000 a year on a summer holiday. Also 100 a month on clothes. These are areas you could probably cut down the most. They are not unreasonable, but if you want to be saving more you might want to thing of reducing this a bit.

Also, your combined gas/electricity seems high, can you change suppliers or do things to reduce your energy use? also, your internet at 32 is on the high side, you can get phone and broadband deals for half that amount.

Other than that, just cut down on the luxuries a bit. It's a hard slog and it took me and OH years before we had a decent deposit for our place. Good luck!

mickym

beinerts wrote: »

You spend 2,000 a year on a summer holiday. Also 100 a month on clothes. These are areas you could probably cut down the most. They are not unreasonable, but if you want to be saving more you might want to thing of reducing this a bit.

Also, your combined gas/electricity seems high, can you change suppliers or do things to reduce your energy use? also, your internet at 32 is on the high side, you can get phone and broadband deals for half that amount.

Other than that, just cut down on the luxuries a bit. It's a hard slog and it took me and OH years before we had a decent deposit for our place. Good luck!

I doubt we will spend 100 per month on clothes between us, but would rather we factor it in than not.

The budget i provided is also a stripped down version. The petrol costs being reduced to a fact as if i was working from home most the time (my boss has said this is possible). Otherwise my petrol would be £250 a month and insurance higher.

another thing not factored in is that the BH has a saturday job, but this is used to pay for her gym membership. so that cancels each other out.

The internet price is for Virgin media broadband service with an additional £7 for newsgroup access allowing us to watch programs at later dates...so saving on sky plus etc.

The gas and electricity has been worked out from my parents current bills, as the house is same size and only down the road from the place we are looking to rent....so took this as a guide.

mickym

bumpity! !

daveyjp

Drop the clothes budget. A rule I have is never to pay full price for clothes or shoes. You should never be desperate for clothes and sales are so regular now it is easy to do.

Council Tax and water (if rates not meter) aren't monthly - in our area Council tax is 10 months, water 8.

The biggy is the holiday. Reduce this by half and thats £1,000 saved straight away.

Look through your bank statements too and see how much money you withdraw which seems to disappear. This can quickly stack up.

mickym

cheers davey jp. As part of the process of working out our finances before getting a place. we are also looking at our potential budget for when we start a family, i.e living off one person's wage.

I am going to produce a new spreadsheet, with a before kids/after kids so we can get a realistic view of our expenditure before making decisions on a place to live/amount for rent/savings etc.

Nice to plan as much as we can and be aware of what we can and cant spend.

All your advice has been really appreciated!

Thanks

Michael

TrickyDicky

£25 a month for contents seems a little steep. Im paying a little more than that, but Im covered to take 3 items worth more than £4k each out of my house. If I didnt want to take them out of the house, I could get cover for about £10 a month (this is based on £30k contents).

Gas an electric seem a little steep. See if you can get on a dual fuel tarriff.

Why do you pay £7 a month for newsgroup access? you can access them for free via groups.google.com. unless these are some special newsgroups or you are downloading binaries?

Breakdown can be had for as little as £36 from Auto aid (I know not a massive monthly saving, but all those little bits add up), with full home start etc.

£2000 is alot for an annual holiday for 2 people.

nobblyned

I guess the obvious question is why do you want to pay the rent, gas, water, electric and council tax on a 3 bed semi when there is only the two of you?

This is the bulk of your outgoings and could probably yield 2-300 a month in savings if there is a smaller property available that would suit.

I realise you are after a family soon, but looking at your outgoings saving for this should be a priority, how would you afford it at the moment?

margaretclare

Hello Micky

What leapt out at me were the following items: £50 for drinks, £500 for Christmas and £300 for birthdays.

TrickyDicky says £2000 is a lot for an annual holiday for 2 people. Well, I don't know. It depends on where you go, how you travel, where you stay, what you do when you get there. We're planning a trip up the Rhine by car early September and, totalling it all up, for 10 days or so it's going to cost in the region of £2,000 give or take a bit. But....we're not in Micky's position! It's a question of priorities, Micky. You have income, but you're going to have to decide what is most important to you. It's not written in stone that you HAVE to take a summer holiday away every year! Christmas is a day on the calendar (that's all it is for most people, now the religious significance is largely slipping away) so why spend £500 on it? And birthdays - whose birthdays?

Budgeting, assuming you have income to cover your basic needs, becomes a question of priorities, of choices, and you have to decide what you want most.

Good luck!

C_Ronaldo

Food shopping as well, only buy what you need, if you dont already try out lidl/aldi/netto if theres ones near you, they can cheaper than the other big 4 supermarkets, you wont be able to get everything from aldi/lidl/netto but what you cant get you go to asda, tesco etc for what else you need, im sure theres a lidl/aldi thread on the shopping section,