budgeting when paying of debt

Bella79

Hi all

Ive jst done the budget planner and i was wondering do you all put away monthly for xmas ? road tax ?

So if i start my budget now should i out more money in now for my tax as its due in feb and so far i have nothing towards it, then i can pay for it over 11 months from there ?

And how do you go about birthdays etc ?

I was thinking of jst putting everthing across into my other acc for xmas /birthdays /tax but then it would be all together and may get confusing whats for what

I would use a spead sheet but im crap with em lol

Thankyou
x

biggaz26

I have designed myself a spreadsheet that I can adapt to your situation if you like.

If you post a full SOA on here using the http://www.makesenseofcards.com/soacalc.html let me know when you monies usually go in and ill set it up so you can update each month with you outgoings and it will work the rest out for you!. I can make it cover the next 12 months but any further than that may be too much

let me know if you want it. It's helped me no end over the years.

G

gfplux

Total up all your bills that you are paying annually or quarterly such as TV licence, Car road tax, Car, Buildings and Contents insurance, Car maintenance, Holiday and Emergency funds, etc. that you show monthly in your SOA. Then open a savings account and pay in that amount monthly by standing order. Then when those bills come along you have the money for them. It takes a while to get this running smoothly but don't give up.


And post your SOA


Good luck

LeeSouthEast

One tip: Don't blindly divide all bills by 12, as you'll come up short. Instead, for the first budget at least, work out when they are due and then divide by the months you have left.

i.e. Car Tax due in 4 months time. Don't divide £160 by 12 (£13.33/mo) but divide it by 4 (£40/mo). That way when bills become due, you will have the money put by for them.

This may sound really obvious, but it's amazing how many fall foul of that one!

*Jellie*

Lee beat me too it with his tip. I started my budget by just dividing annual bills by 12 and came unstuck within a few months. Soon realised where I'd gone wrong!

Idiophreak

gfplux wrote: »

TThen open a savings account and pay in that amount monthly by standing orotal up all your bills that you are paying annually or quarterly such as TV licence, Car road tax, Car, Buildings and Contents insurance, Car maintenance, Holiday and Emergency funds, etc. that you show monthly in your SOA. der. Then when those bills come along you have the money for them. It takes a while to get this running smoothly but don't give up.

I've written myself a bit of software that does this, but in a little more detail. I can view all of my account balances (I just enter every spend into the system, so it's always more or less up to date), then I can click through and see the various "pots" that are in the account, so if I need to pay for something out of, say, the "car maintenance" pot, I can see exactly how much money I've saved toward it, which other pots will be impacted if I remove money from that account and so on.

I'm still in the process of coding it, so it's not perfect yet, but hopefully will start using it properly soon...in the meantime, I'm clearing debt rapidly at the mo - something like £800/month. So if an expense comes up, I just take it out of that £800 then carry on - all the debt's at 0%, I should finish paying it long before the rate rises and i'm not spending much on things that I don't *have* to buy...so don't have a problem with dealing with it month-to-month for now.

Tixy

I do put all my money across to one account - and then keep a record of what I have within the balance for each item.

Totally agree with Lee and Jellie about not doing just 1/12. When I first started I ended with a combination, so I knew my road tax was in 5months but something else wasn't for 8 months, I did some juggling so that over the 8months I'd put the same amount in each month but the allocations changed over the time to make sure I had enough for each (it was a bit of a faff as I was borrowing from 1 virtual pot for another- but without it I would really have struggled with the bills that were quite soon.
I also moved everything I could to be paid monthly cos its just so much easier - now I only have 3 virtual pots within 1 account.

Toni_Broke

Hi
Yep virtual pots i love em!!!
Good luck
Tonixx