I need a proper budget

Miffi_2

I am trying to reorganise my money and working out a better budget for myself, but I really am having trouble.

Can anyone help?

This is my 'ins and outs' every month:

Income:
My take home pay (after deductions) is £1000

Outgoings:
£100 Northern Rock car loan (due to end in Jan 07)
£30 car insurance (thoroughly researched this and the best I can get)
£14.99 Broadband
£10 pay as you go mobile
£15 swimming
£100 paying back a friend
£550 (this goes into our joint account and is what our house 'runs' from, bills, food shopping, paying off the computer, emergency (eg new tyres etc))
£???? Debt repayment

Obviously these items above don't cover for other things like visits to the dentist, MOT, car tax (due at the end of the month :mad: ), birthday gifts etc.

I'm not worried what we are paying out on things as we have done our research, but what I need to work out is what should I put by to pay off debt, how much should I give myself for pocket money (probably nothing at all!).

I'm quite serious about working out a solid budget as I've honestly never had one before and I think it will really help me.

Would appreciate any advice.

Any advice?

MikeP_5

Hi

The items you listed come to £820, which leaves around £180 spare.

You mentioned the £550 that goes to your joint account covers all the 'extras' - therefore you would be probably best leaving any surplus in there to cover the additional extras like MOT etc. If thereis NO surplus, you need to increase the £pm going into the account until it breaks even!

Assuming the above works, you can then look to the £180, decide how much you want to spend on yourself, and commit the rest to paying off your debts - easiest way is to set up a SO or DD to the debt provider if it is a credit card. Obviously, the less you allow yourself, the more you will pay off each month, and the quicker you will reduce your debt!

Miffi_2

MikeP wrote:

Hi

The items you listed come to £820, which leaves around £180 spare.

You mentioned the £550 that goes to your joint account covers all the 'extras' - therefore you would be probably best leaving any surplus in there to cover the additional extras like MOT etc. If thereis NO surplus, you need to increase the £pm going into the account until it breaks even!

Assuming the above works, you can then look to the £180, decide how much you want to spend on yourself, and commit the rest to paying off your debts - easiest way is to set up a SO or DD to the debt provider if it is a credit card. Obviously, the less you allow yourself, the more you will pay off each month, and the quicker you will reduce your debt!

Thanks Mike - I think part of the problem is that I don't know how much to put aside for debt and how much to have spare...I've done it before where I've got myself in a total muddle and put aside everything to debt repayment, then been really short and ended up overdrawn and feeling like I'm back to square one!

MikeP_5

I think it's a case of being realistic - if you have £180pm spare, how about £100pm towards debt and £80pm for yourself? Always remembering that it is flexible and if you feel the amounts are not enough or too much, you are in control of them !

OberonSH

Personally I think you need to break down your 'household' account a bit further - what do you spend on food, bills etc. Car tax you can budget for, and as of next month start putting a bit aside every month for it, presumably a lot of your household stuff you know what's going to go out.

Then you could transfer anything left in the household account at the end of the month onto your debts, as well as the minimum payments.

I kept a spending diary for a month before doing my budget, as I felt this gave me a realistic idea of what I actually spent, not what I thought I spent. This might be an idea.

CLAPTON

a budget has to cover EVERYTHING you spend or will spend.

so you need to to a spending diary to understand where ALL your money goes each month and that includes household bills..absolutely everything

secondly you need to think about all the annual or oneoff bills like presents, xmas, MOT, car tax, servicing, holidays clothes, dental /medical ;
i.e. everything that you will spend over the next 12 months: all these can be divided by 12 to get a monthly equivalent.

if the total monthly spend (plus debt repayments) is less than income then fine; if not you need to reduce spending so the spending is less that income.
in the months that you dont actually spend on your annual spends you need to SAVE that money so its available when you need it.