Please can you help me cut my expenditure?

archie9uk

Hello. I would like some help on cutting down our expenditure, please. There are just the two of us (and a dog) at the moment, but we want to start a family soon so I want to cut down as much as possible beforehand. We both work full time and can't afford to stop work, so we're going to have to pay for full-time childcare (which doesn't come cheap!). We don't have any debts apart from the mortgage on our home and the mortgage on our buy-to-let property (just to explain, it was originally bought as a home, but when we moved last year we let it out rather than making a loss by selling in the current climate).

I have just used the income and expenditure part of the SOA and added some notes (quite a few!).

Statement of Affairs

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2 *this is actually one car (mine) and one scooter (my hubby's)

Monthly Income Details
Monthly income after tax................ 1200
Partners monthly income after tax....... 950
Benefits................................ 0
Other income............................ 310 *this is our monthly rental income with the agents fee etc deducted
Total monthly income.................... 2460

Monthly Expense Details
Mortgage................................ 545
Secured loan repayments................. 300 *this is the mortgage for the property we let out - I have used a rough amount here because it is a variable rate mortgage, so it has been changing quite a lot recently
Hire Purchase (HP) repayments........... 0
Rent.................................... 0
Management charge (leasehold property).. 2
Council tax............................. 102
Electricity............................. 35
Gas..................................... 55
Oil..................................... 0
Water rates............................. 25
Telephone (land line)................... 30 *this is for phone and internet (BT)
Mobile phone............................ 0
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 0
Petrol/diesel........................... 130 *this is for car and scooter
Road tax................................ 13 *this is for car and scooter
Car Insurance........................... 44 *this is for car and scooter
Car maintenance (including MOT)......... 50 *this is for car and scooter
Car parking............................. 0
Other travel............................ 106 * this is for bus passes that my hubby needs to get if the weather is too bad for him to ride his scooter, and for his driving lessons @ £20 per week (there wasn't really anywhere else to put this)
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 14
Pet insurance/vet bills................. 30 *this is all costs for our dog (food, grooming, vet etc)
Buildings insurance..................... 30 *this is buildings insurance for the property we let out, and buildings and contents for our home
Contents insurance...................... 0 *included above
Life assurance ......................... 71 *this is for two decreasing term policies (one for each property) and also critical illness cover
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 200 *this is £100 per month each which we use to pay for our mobiles, clothes, presents etc, which is why these are not listed separately - we don't necessarily spend the full amount each month, but it leaves our joint account by standing order
Holiday................................. 70 *this is holiday, spending money etc
Emergency fund.......................... 200 *for both properties
Total monthly expenses.................. 2164


Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

DesG

Just as a checks and balances thing, do you have £2-300 left at the end of each month?

Your monthly amount for council tax should be £101.66

Cheers, Des.

trina2010

hi,
just having a look at your SOA, your let property..it seems you are actually losing money on this at the minute by the time you add the insurances to the mortgage.
is there any way you could look into letting agents with lower fees? or a slight increase in rent? maybe even only £10 pounds a month so you arent making a loss. yes its a small amount, but its still a loss, and every penny in the bank counts

other than that everything looks healthy, although i would maybe consider a reducation in 'entertainment' 1200 pounds a year is a lot of money for mobiles and clothes etc plus another 100 a month on top of that for spending....making a dent in that would certainly help you build up savings for any LOs coming along and save you any headaches during maternity leave and after.

71 pounds a month for life insurance even for 2 properties, mine and OHs is 8.33 a month....

just my 2 cents, good luck

whatatwit

Hi, I think you should both start to keep a spending diary, to show where and how the money gets spent.

Do you actually move the emergency fund money to a separate account, especially for the BTL.

archie9uk

DesG wrote: »

Just as a checks and balances thing, do you have £2-300 left at the end of each month?

I have been keeping a spreadsheet of monthly income and expenditure for the nine months since we moved house. Going by that we haven't had £200-£300 per month left over - we have had an average of £85, but we had some large purchases when we moved (new sofa, new bed etc) and we have had a full re-wire on the property we let out. Obviously these are things we won't have to shell out for again, so without these we would have had about £230 per month left over.

DesG wrote: »

Your monthly amount for council tax should be £101.66

Cheers, Des.

I have updated this, thanks.

archie9uk

trina2010 wrote: »

hi,
just having a look at your SOA, your let property..it seems you are actually losing money on this at the minute by the time you add the insurances to the mortgage.
is there any way you could look into letting agents with lower fees? or a slight increase in rent? maybe even only £10 pounds a month so you arent making a loss. yes its a small amount, but its still a loss, and every penny in the bank counts

I know, we are losing money. I am actually changing agents in April - they're the same price but they do full management (which the current ones only do for a higher fee). We had to reduce the rent by £25 per month to find a tenant (despite advertising at the rent suggested by the agent!), so I do intend putting the rent up at some point. The mortgage has gone right down, so we're saving money on that at the moment. People have suggested just selling up, but I'm stubborn and think it best just to sit out the crash. There is a chance we might get back the money we put into the place by waiting to sell (maybe even making money!?!), but if we sell now we definitely lose out.

trina2010 wrote: »

other than that everything looks healthy, although i would maybe consider a reducation in 'entertainment' 1200 pounds a year is a lot of money for mobiles and clothes etc plus another 100 a month on top of that for spending....making a dent in that would certainly help you build up savings for any LOs coming along and save you any headaches during maternity leave and after.

We have talked about reducing this to £80 per month each, and probably further at some time in the future. We don't actually spend all of it anyway.

trina2010 wrote: »

71 pounds a month for life insurance even for 2 properties, mine and OHs is 8.33 a month....

just my 2 cents, good luck

Sorry, I forgot to add a note that it is life insurance and critical illness cover (which is the expensive bit!). I am trying to find something cheaper....

archie9uk

whatatwit wrote: »

Hi, I think you should both start to keep a spending diary, to show where and how the money gets spent.

I was writing my post as you posted this! I do keep a record, although not one for our £100 per month each spending money.

whatatwit wrote: »

Do you actually move the emergency fund money to a separate account, especially for the BTL.

No, we don't do this at the moment, but it sounds like a good idea. (This figure was just an estimate.)

Fire_Fox

Is the second property nearby - do you actually need a letting agent? What are your plans for paying the mortgage when the second property becomes empty? Your energy bills are pretty high for two people, do you know where this is going? Would you be entitled to any benefits to help with childcare in your current position - would the second property affect this? Are you intending to run two cars once your OH can drive - can you afford this? Can you afford to insure him as a new driver? Perhaps you could agree only to have a holiday if you both save up from your individual entertainment budgets?