Budgeting for the Big Spends

alicemary

Dear moneysavers,

I feel like I'm chasing my tail at the moment. As soon as I get on top of my finances, with a budget that looks manageable, i somehow sabotage myself.

I've worked out the problem: I can budget for the small stuff very well: bills, food, commute, gym, toiletries, cinema trips etc...
but the Big Spends always get me. The problem is they are not regular expenses, but one-offs: trips to see family abroad, birthday presents etc...
Despite trying to keep on top of these, they almost invariably end up costing me more than I planned, and scupper my budgeting for the small things.
So I find myself scrimping on day-to-day things to compensate for the blow-outs past and future.
This is quite soul destroying, I wish it could be the other way round.
How can I budget for my Big Spends? I don't even know where to start.
Should I keep a savings account? A paper budget tracker??

Quietgirl

Hi there, personally, I have some savings accounts which on pay day, by standing order a certain amount is transfered to each account ready for big bills I know I am going to get. For instance one account I have I call it my "car fund" each month money is transfered into it, which will hopefully cover road tax, insurance, mot and servicing. Then I have another account which I am trying to build up a certain amount for emergencies like for instance if the washing machine packs up. I am hoping to get between £500 - £1000 in there, once I have that I intend to keep it topped up to that amount and put anything over I can save into my ISA. That's what I am doing anyway.

MPH80

Your problem isn't the saving from what I can see - the most revealing line to me is:

they almost invariably end up costing me more than I planned

So to me it sounds like you're saving up - but then going over budget. That's a much different problem as to how to save for them.

The simple truth is that if you have a budget you have to stick to it - so if you're booking a holiday and you want to spend £x00 - make sure you can - (for example) don't fly to America for £400 if your entire budget is £500 - go to france on the ferry, or somewhere in Britain instead!

Of course - assuming you aren't saving up - then you do need to follow quiet girls advice - which is the best way to tackle this stuff - e.g. budget for it and save up.

The trick is to decide what you want to for the 'big things' first - and then save for them - rather than saving for an unknown big thing and spending on it. Of course - there will always be emergencies (e.g. car breaks down/is towed away/boiler explodes) - but those have to be dealt with out of an emergency fund which should also be part of your budget and really should be a comparatively large amount of money so that you could live if you lost your job (mine is 3 x monthly salary for example).