Got a bit more organised- thoughts please?

Gillybean

OK, so i did start a bit of a diary last year but I think I jumped the gun a bit.

Basically our joint account had always been in the red, we'd always run it that way and I thought I was OK with it but as I started to focus on OPing it kept coming back to haunt me. In the past we'd been less organised, always ended up running it back into the red after giving it a cash injection so we thought why bother. But now we manage our cash and budget and so almost all the OP money has gone to paying off the overdraft and getting it straight so that there is enough money in there each month for everything and is NOT touched for anything else.

In fact I've got about £150-200 breathing space per mth so my plan is to syphon that off at the end of each mth into the OP account. yay!

I have a standard OP standing order of £50 p/mth and I take a really tiny salary from a small business I run of £200 per half term. We don't rely on this so I'm sticking that in the OP pot too.

So thats all good.

My question is re the amount of savings we have. DH and I are self employed. We need £2k per mth to go into the joint account for outgoings. We save £440 per mth. At the mo we have around £7k saved, having made a large OP last year. And I have around £7k in my own name. Dh has probably double that stashed away.

So I'm thinking get the joint savings to £8k and that's 4 mths outgoings (which inludes the savings). Anything we save after that I'm planning on syphoning off to OP. Now I know the ideal is 6mths savings, but I figure with what we have both jointly and individually we're covered with getting to the 4mth level- plus we have a good self employed policy for illness, accident, etc that kicks in after 30 days.

Do I have all the bases covered? Have I finally got myself sufficiently organised enough to concentrate on the MF journey?

StuartGMC

Gillybean
Welcome back.

Answering your question on the savings situation, if you and OH agree on it and you also have the insurance in place then it would seem to cover your "emergency" needs.

You mention that you have now pulled spending under control, but have you also included in that your savings needs for annual (holiday, car maintenance, insurances etc) and longer term items (replacement car(s), replacement white goods, TV, PC, entertainment systems, with your annual amount to save based upon the replacement schedule) on top of your savings above?

My own household budgeting spreadsheet covers these things plus the annual school trip (£220 to pay next week for example), swimming lessons for DD etc.

If you have also monitored your true spends on food etc then you should be very confident that the £150-200 is available per month and hopefully then bring it forward to the start of the month not the end to OP?

It sounds like you've had a productive year bringing things under control and now pro-actively managing your cash so I'm sure you'll achieve your goals together.

shopgirl2512

Good luck Gillybean!