working out soa & budget on weekly and monthly wages!

garcianicole

hi there
im new to this site, found it really helpful so far ..
we should be in a position to pay off some of the mortgage and a fair bit of our debt (but not all, concentrating on those with high interest) in next cpl weeks as my husband is awaiting an inheritance payout - however, i have just started maternity leave and his overtime has been reduced so we still need to be very "careful" and im trying to work out some sort of budget to take us to the end of the year - its not cut and dry as there's no point working out averages over 12 mths as have expensive school uniform to buy, baby bits, xmas etc all before end of the year. i will just try and budget for regular bills and expenses and pay for the extras with any enheritance money left, health in pg grant and husbands xmas bonus, but i want to get ahead of myself and work out a soa as it will stand end of this year so that we can start afresh in 2011 .

i have a few question is which i hope someone could help me with - the first is when i was working out joint income, was confused how to go about it as i get paid monthly and my husband gets paid weekly - how on earth should i work it out? if i work my husbands out monthly (ie 4 weeks) ie 380 a week, it comes to 18240 over the year and weekly 19760 over the year after tax - quite a big difference, also his overtime may start up again in the new year so makes it even more confusing - if working it out as an average is the way to go, would someone kindly do that for me?

second question is, how do you break down your holiday fund, entertainment, xmas/bdays, clothes and hair cuts etc .. again do you total it up to what you spend a year and break it down into 12 - if so, how would that work as you might need chunk of money earlier in the year (ie hols?) which you wont have saved enough for - do you just dip into the xmas money and it balances out in the end ?

i have never "budgeted" for clothes before, just bought out of my left over money - but really want to account for everything this time so that what i have left really is for savings or paying off more of our debt - what would you say would be a good monthly amt to put away for 2 adults, 1 x 11 year old and a baby? was thinking £15 each? obvioulsy baby will need more clothes, my husband does get through trainers at work so total bill will be quite high i think

also entertainment, what would be a good amt to put away a month - £40 a month, should i work it out as an expense or just see what money is left in the kitty? just thinking, less likely to go out jan-feb when cold, perhaps better off putting a little away for the summer?

anything else will come under savings, hope to put away 2 amts - 1 lot to cover unexpected expenses, house hold goods need replacing, school trips, small emergencies and 1 amt not to be touched, does this seem like a good idea or should i break it down even further, just a little hard as havent a clue what school trip might cost for example, or cant know in advance if kettle is going to blow

hope i dont come across as bit dense, lol .. would so like to keep on the straight and narrow now we have chance to clear off some debt, and you all so many great tips
my husband and i are going to keep diaries for cpl weeks to see where we are over spending - i know i have far too many "coffees" in those expensive coffee shops in town when meeting friends, i need to start thinking of other ways to spend my free time whilst im on mat leave!

thanks for taking the time to read, as i say im new to the site and new to budgeting every little thing .. but i want to start as i mean to go on !!

lesalanos

Hi,

For your partners wages just divide his total wages by 12 to give an average monthly figure.

For things like presents etc again just divide the total by 12. An SOA works out average costs throughout the year. Things like car tax and MOT dont occur every month but the purpose of the SOA is to give an average figure. As you say you use some of the othet funds if it occurs earlier in the year or spend it on a hpefully interest free cc.

What amount for entertainment? That depends on what you can afford. Put in what you think that you spend now and let others tell you that it is too much and you cannot afford it

As you are not sure on exact figures you would laos be better to start a spending diary and record where every penny goes to. This will also help for future SOAs and also let you see where you are "wasting" some money.

dont use the coffee shops in town, invite your friends back to your, or even better theirs for coffee.

Put your SOA up and let the others have a good look. Don't worry if it is not right first time. You will then get loads of great advice on where you could cut down.

good luck

Marisco

Hi Garcia, the way I used to calculate wages per month (I was paid weekly and all bills were monthly!!) was to multiply by 52 and then divide by 12 i.e your figure of £380pw would be 380 x 52 = £19,760 then divide by 12, giving you a monthly figure of £1,646.66. I don't know if I did it right but it worked for me;) Its difficult to work out weekly figures as some months have 5 weeks in them. Hope this makes sense!!:)

garcianicole

hi
thank you both for the great advice

just trying to get through until end of the year and will then post proper soa start of 2011 - as will have had baby by then and know exactly what benefits getting, if husband has re started over time, just trying to work it out roughly at the moment .. its so easy to get back into bad habbits

im already looking forward to putting bday/xmas money and clothes money away monthly in advance - it means i can save money throughout the year when i see a bargain - rather than panicking that i have 6 weeks to save for xmas or daughter needs new clothes etc .. kinda fun, and the best bit will probably be in credit to the amt i originally budget for by the end of the year!

i think £40 a month for enterrainment is a little too much to start with - thanks for pointing that out, specially as we have been without for the last year or so! will try and reduce to £20 and do free stuff, buy days out with club card points etc - then special day
out for bdays which i will of course budget for, lol!

again, clothes budget perhaps a little high - will reduce a little and shop around .. see im learning already

just trying to work out a fair amt for my husband and my pocket money - should i work out a figure to get us through mon-fri each, ie coffee, papers, his cigs, a pint on a friday (him not me, lol) then an amt for the weekend or i work out average spends mon-sun and perhaps up the entertainment budget? im a little reluctant to pull in the reigns too much as he does work very hard and we kind of got into debt because he was feeling so frustrated at not having much money to himself - he works with young lads with no real outgoings and was finding it hard to keep going without. some might say tough - most family men live that way, but i believe prevention is better than cure, and want to give him a decent enough budget so that he doesnt feel like he's a kid having to ask for extra pocket money - although i plan to budget for his hair cuts and trainers / essential clothes seperately as he wont think of putting money away himself for those things.

talana

i have a few question is which i hope someone could help me with - the first is when i was working out joint income, was confused how to go about it as i get paid monthly and my husband gets paid weekly - how on earth should i work it out? if i work my husbands out monthly (ie 4 weeks) ie 380 a week, it comes to 18240 over the year and weekly 19760 over the year after tax - quite a big difference, also his overtime may start up again in the new year so makes it even more confusing - if working it out as an average is the way to go, would someone kindly do that for me?

As Marisco points out, your discrepancy here is that there isn't actually 4 weeks in a month (except Feb).
Averaging it out over the year (because some months are 30 days, some are 31), a month = 4.34 weeks.
Use that multiplication factor to convert weekly figures to monthly and you'll be much nearer the mark.

lesalanos

IMHO It would still be worthwhile putting up an SOA so that you can see for yourself where your money is going. Even if the benefits and your partners o/t is not included then it will still be an excellent budgeting tool.

Star a spending diary too so that you can see where it is going and what you can cut out.

Do you have a full plan for the inheritance money or do you need more advice on what to pay/not to pay?

good luck

garcianicole

hi
thank you, im trying to see how we can work round it .. its just so complicated - im wondering if i could perhaps pay monthly bills ie. mortgage (he'll have to contribute also) council tax etc and he the weekly shop, petrol, and his pocket money then work out a set amt each week from left over wages to go into an account for balance of mortgage, and other monthly bills .. he will in effect being overpaying when work out over the year but i guess thats not such a bad thing and we can look at it as savings or emergency fund if he goes sick, or something

garcianicole

my husband is inheriting around 55k + his gt aunts wishes were that we paid at least 30k off the mortgage, which we will do as its repayment only at the moment at quite a high rate with leeds and we want to reduce it enough so that we can start paying interest also which we just cant afford at the moment.
he will then pay off around 10k of joint debt, mostly cards and a loan - this will free up enough money every month to help us survive whilst im on mat leave until may 2011
it will leave a few silly bits debt which will take up around £100 a month for about a year - he wants to put the rest away to help towards bits we need for baby, daughter starting secondary school in sept and for cpl treats and start of savings fund, plus any emergencies should they arise
he's reluctant to pay debts off completely as doesnt want to use all money up as you never know what is around the corner, besides the ones we will still paying off are all without interest and i plan to budget for
the reason i have come on here is to start a budget for 2011 - i know from previous experience its so easy to start dipping into savings for every day living and just want us to be comfortable and perhaps even boost the savings a little each month once we have got into a routine as will need at a later date ..
problem is, we live in a 2 bed flat with 11 yr old daughter and baby boy due sept - cant realistically expect to be living here 2 yrs down the line, so have to be careful how we live and as we most probably wont be able to afford a house we need to either be putting some money away to add to equity for shared ownership place or if not able to get mortgage because of his credit history (despite paying his debts off, no doubt will be tainted for years) worst case scenario, will have to let the flat out and rent a house until such times as we're able to buy -again, need to ensure we can cover every avenue, non tennant for cpl months scenario, top up rent on other place - but i shall be working full time again by then so hopefully with extra income and savings wont be too much of a struggle - a lot to think about!

Fortheloveofmoney

When I first started budgeting properly it was part way through a year so I didn't divide the annual bills such as insurances, car tax, xmas, holidays etc by 12. I divided the overall amount for each item by the time left until I had to pay for them. This really helped me in the first year although it left me with little disposable income. After that first year I then divided by 12 and things were a lot easier. I'd also gotten used to the lack of disposable income so was able to plough the extra in to my debts.

Fortheloveofmoney

garcianicole wrote: »

my husband is inheriting around 55k + his gt aunts wishes were that we paid at least 30k off the mortgage, which we will do as its repayment only at the moment at quite a high rate with leeds and we want to reduce it enough so that we can start paying interest also which we just cant afford at the moment.
he will then pay off around 10k of joint debt, mostly cards and a loan - this will free up enough money every month to help us survive whilst im on mat leave until may 2011
it will leave a few silly bits debt which will take up around £100 a month for about a year - he wants to put the rest away to help towards bits we need for baby, daughter starting secondary school in sept and for cpl treats and start of savings fund, plus any emergencies should they arise
he's reluctant to pay debts off completely as doesnt want to use all money up as you never know what is around the corner, besides the ones we will still paying off are all without interest and i plan to budget for
the reason i have come on here is to start a budget for 2011 - i know from previous experience its so easy to start dipping into savings for every day living and just want us to be comfortable and perhaps even boost the savings a little each month once we have got into a routine as will need at a later date ..
problem is, we live in a 2 bed flat with 11 yr old daughter and baby boy due sept - cant realistically expect to be living here 2 yrs down the line, so have to be careful how we live and as we most probably wont be able to afford a house we need to either be putting some money away to add to equity for shared ownership place or if not able to get mortgage because of his credit history (despite paying his debts off, no doubt will be tainted for years) worst case scenario, will have to let the flat out and rent a house until such times as we're able to buy -again, need to ensure we can cover every avenue, non tennant for cpl months scenario, top up rent on other place - but i shall be working full time again by then so hopefully with extra income and savings wont be too much of a struggle - a lot to think about!

Sorry if you have already thought of this, but before paying off 30K from your mortgage, check whether you will incur any penalties from your provider. Some only allow a 10% over payment per year and will apply a charge if you go over this.

Also, check when the interest is applied. I think these days most do a daily or monthly calculation but some don't. It will be more beneficial to the mortgage company than you if you give them the money at the wrong time as they will benefit from having it earlier and you won't get a reduction in interest until it's calculated again.

You can always leave the money in a high interest account until the correct time.

garcianicole

for the loveofmoney
thank you, hadnt realised payments might not be reduced straight way - was kind of relying on that to help get through my mat leave
someone is coming over next week to discuss it all, so will make sure my husband asks all the right questions - better sitting in our account getting interest than theirs!
also do you know what the penalty fees tend to be? are we talking 100's or 1000's? is it a set fee or a percentage of what we pay off