Budgeting - 2 salaries into one account

SHAKERMAKER

Just wondering how best to jiggle money really.
Other half and I both get our wages paid into our joint A&L account. We're running our Barclays account down because the overdraft is £2300 so paying it off.

Joint income into the account is around £2450 per month.

All bills, mortgage, etc are on DD. Food and petrol/diesel come out of the same account using the debit card. Anything we buy basically is on debit card and I check the balance almost every day. We do keep reaching our overdraft limit and I know its largely down to overspending which we are trying to curb now however my question is as follows:

Should we pay some money into another account for food and fuel? How can we make it easier to manage? Should we open another joint A&L account to run alongside it and use one for bills/mortgage only and the other for cash and debit card purchases?

It seemed to be easier to budget when the other half was paid weekly because we didn't use an overdraft. But then we didn't have children then either!

Thanks in advance.

getmore4less

You don't seem to have any budget at all.

You need to plan your spends so outgoings < income and stick to it.

Make a plan for the next 12months and track it also plan in a debt free date to have both overdrafts paid off.

Both using the same account for misc spends is risky since you both can take you into the overdraft without the other knowing.

Why not start with all the bills etc going out as DD and then give yourselfs an allowance(weekly to match the previous pattern) and take that out as cash and only spend that amount.


keep a spending diary to identify where the overspends are.

Lokolo

Open up another account, change directdebits to this account.

Every time you get paid, immediately transfer the amount you need for bills. What I tend to do is round up a bit. Example:

Gas Elec: £122.50
Phone+BB: £27~
Mobile: £25~

I put in £190 into the account each month.

If you have £2450 a month you should be putting some money into savings each month + do the above. You will find this cuts down on your spending. Start of with £50 a month, then £100, then £150, then £200, then £300 and you will soon realise how little you need to spend on food etc.

I tend to push myself to the limits which is why I do the above, re savings, because then I don't spend anymore because I have no more money (although I would have if I didn't put money into savings)

crazyaboutsaving

My DH and I also have a joint account and all our money comes in and out of this one account. It works for us but we have a very strict budget. Sometimes it's helpful to withdraw the spending money you have for that week/month and hold onto the cash. Once it's gone, it's gone! Some people do this for budgeting everything (i.e. take out 200 a month for groceries, 100 a month for spending etc.) and once you've spent the cash, that's it! It helps some people stay on budget and that way you don't touch your chequing account, just the DDs come out of it. Have you done an SOA? Perhaps you should post an SOA and then some of the very knowledgeable folks on the site can help you with your budget.

sarah_elton

For starters, work out how much your bills actually are. Make a list of mortgage/rent, council tax, elec, gas, water, phone, broadband, TV, debt repayment - absolutely everything and its cost per month. Ignore food for now. Then total that up.

£2450 minus this amount is your disposable income each month for food, petrol and other spends.

That alone gives you a basic budget. This is how I've done mine.

I have an Excel file and each month I have this amount to spend (income minus bills). I keep a list in the file of all spending - debits from my current account (whether switch or cash withdrawals) and items put on credit card (which is paid off in full each month - I get cashback on it). Everything is deducted from my spending budget from the month, and most importantly it shows up immediately. So I can have lots of money in my current account but only say £100 left to spend for the month in Excel, because actually what's in my current account is already due to come out with bill direct debits that haven't gone yet or repaying the credit card at the end of the month. I have to be this anal or I will spend more than I have. I make a new worksheet each month so I have the historical records and can see what areas I'm spending loads on over time.

Then, at the end of the month, any surplus goes into savings. If you find it hard to stop spending then you could add 'move to savings' to your budget, and have less disposable at the start of each month - then you're not so tempted to spend it.

SHAKERMAKER

You're all right we don't have an official budget.
So this is my job over the next few days to sort one out.
I might try moving money into a savings account that I have attached to the current account that has it's own cash card (and that's cash not debit) so we will use this pool of resources for food and fuel.

should I put fuel costs in my monthly outgoings, or is this classed as disposable?

We are 5mins walk from Tesco. bloody lethal if you ask me. I'm currently pregnant so might start doing online shopping with asda. What are your thoughts?

Pitchshifter

No, food and fuel are essential, unless you like walking and get free food. Put them in your budget. These are very important items because they are the most flexible (ie you have most control of them), but you need to know what you're already spending per month on both of these, so keep reciepts for 1 month or multiply 1 weeks worth by 4 to get a rough average. Once you know what these costs, you might find you're spending too much on food as that is the easiest weekly way of overspending. Might only be £20 a week but that soon adds up over the month.
For food I generally try and keep an upper limit with some breathing room: eg. My maximum budget is £50 but on average I spend £40 each week. So for a monthly budget £200 it's a nice easy figure and if I spend under that then I can save the money for something I don't need. A disposable income is money you can afford to spend on treats and meals out and holidays. Fuel is generally needed just to get by on a daily basis, not exactly something you choose to buy.

BruceyBonus

SHAKERMAKER wrote: »

We are 5mins walk from Tesco. bloody lethal if you ask me.?

Totally agree - I live a few doors away from Sainsburys. It is so easy when you fancy something in particular to eat to just pop downstairs and buy it. I ended up spending a lot of money this way. Now I've decided I'll go there every three days only with a list that I keep next to the fridge. I will now only ever buy what is on the list. My only visits in between the three days are for essentials, like milk, bread and possibly fruit.

Pitchshifter

Martin Lewis is on ITV now, all about food shopping cheaply.