My SOA / proposed budget !

Deestar36

Dear All,

Well I’ve decided to take the bull by the horns and actually review my SOA (see below) and set myself a budget – timing wise it's perfect as its payday tomorrow!!!!!

Over the last few months my visits to the cash point etc. have become more frequent, but I couldn’t tell you what or where it was going (well not all of it, although I’ve recently had some work done in the house and was frequently dipping into my account for extra things that I hadn’t included within the initial borrowed loan amount (to keep repayments as low as possible – details below). The result is that I’m now £990 overdrawn, against a £1000 limit – yikes! I can’t see a way out of this, other than being stricter with myself and taking a certain amount out per week and keeping in a pot – it’s this money that will get me through the week and once its gone, its gone. The amount I’ve worked out per week is £70; this will cover food @ £20, petrol at £20 and evenings out @ £30 – there’s only me living in the house.

I regularly review my outgoings to make sure I’ve got the cheapest deal etc., can’t see a way of cutting things down further, but comments/help gratefully received. I also scour the site for ideas on bulk cooking, using the slow cooker (which I have), plus making bread (I have a bread maker) etc., but when you’re only cooking for one, this does seem slightly pointless, although am intending to do some bulk cooking this week to freeze (although need to wait till payday to shop).

The SOA/budget below is where I want to be, although some of the items I’m not actually doing yet (I have noted these against each item), the purpose of the £70 a week budget is to reduce the o/d to zero and then start saving for the items I’m not achieving if that makes sense. Anyway ….

SOA:-

Monthly Income
Net Salary: £1,558.00

Monthly Outgoings
Mortgage: £450.00 (Nationwide – SVR 2.5% - current balance £101000)
Loan: £237.00 (Santander - £7500 borrowed over 3 years – ends April
2013 – APR 8.9%)
Council Tax: £99.00 (includes single occupancy of 25%)
Gas/Elec: £77.00 (Eon – Tesco Clubcard points too)
Water Rates: £18.00 (water meter)
Mobile Phone: £10.00 (Virgin liberty SIM)
Virgin – landline/
Internet/TV: £27.99 (for 3 items Phone=M/Internet=M/TV Package=M) plus calls
which only ever amount to about £3
TV Licence: £12.00
Groceries: £87.00 (based on my £20 p/w budget)
Clothing: £30.00 (based on and as and when basis) – not actually saving this
per month!
Petrol: £87.00 (based on my £20 p/w budget)
Tax/Ins/MOT etc: £45.00 (based on 150 tax/39 breakdown cover/48 MOT/188 ins/100
repairs) – not actually saving this per month!
Medical etc: £9.00 (based on 2 dentist check-ups NHS/2 contact lens supplies/2
Prescriptions) – not actually saving this per month!
Bldgs/Cont ins: £12.00 – not actually saving this per month!
Life Assurance: £8.00
Birthdays/Xmas: £42.00 – not actually saving this per month!
Haircuts: £7.00 – not actually saving this per month!
Entertainment: £130.00 (based on my £30 p/w budget)
Holidays: £20.00 – not actually saving this per month – not been for a while!
Overdraft Charge: £5.00 – capped per month (banking account with A&L)
General Household: £13.00 – not actually saving this per month!
Total Monthly
Need/Outgoings: £1428.00

If I’ve worked out things correctly, this is well achievable (on paper) and I intend to start my £70 per week budget from tomorrow. The priority at the moment is to reduce the overdraft until it’s at zero, and then put into place a direct debit for £176 to cover the things above I’m not actually saving for at present.

If I’ve got this drastically wrong or am coming at this from the totally wrong angle or have missed anything, all advice / comments gratefully received.

Many thanks (and apologies for such a long post)!

Deestar36

HappyMJ

Deestar36 wrote: »

Birthdays/Xmas: £42.00 – not actually saving this per month!

£42 per month is nearly £10 per week ... think about it £520 per year. Cut that down. Who must you buy for? Keep it to your childen only and that's it.

3Dogs

As you have said, you don't quite know where your money goes each week/month, so I would highly recommend a spending diary to allow you to see where you are going wrong

With the items you have listed as 'not saving for at moment' some of this is essential (you mst have buildins/contents insurance - sort this out and pay monthly, prescrptions - if you need more than 14/15 a year take out a pre-payment certificate currently £10.40 x 10 months). Other items are not essentials so could be reviewed - if you are serious about clearing your OD then can you afford £130 pr month on entertainment? Not saying don't go out but just be careful in what you spend

But I do get your drift - putting the £176 or so against your OD will get it down quite quickly and you will be in a better position - BUT do remember that Christmas is coming and this is an expensive time for us all so don't be too hard on yourself pet - you do still have room to manouver within your budget

Good on you for sorting it out now before it gets too far out of hand :T

misscousinitt

I know you want to get your OD down, but it might be advisable to put a bit aside for Christmas pressie shopping over the next couple of months and only spend that amount so as not to get into anymore debt for Christmas.

After the OD is gone, I would still make the following changes - Clothes - £20 pcm (this is £240 per year - this is what I budget for clothes and this is plenty - even if you need to buy a suit for work once a year!) Cut the Christmas & Birthday Budget to £25 pcm - Haircuts - do you have them EVERY month - I have mine done every 6 weeks or so. Everything else seems pretty good as long as you do save what you need to.

Good Luck

Devi

A spending diary is definitely the way to go as a pp has suggested.

the discipline of writing it down does make you question whether you really need it!

I have been keeping one for over a month now and it has opened my eyes as to where my money goes.

good luck

MrOrchard

The only thing screaming "TOO MUCH" at me is your Gas and Electricity, we started to turn everything off at the plug (except the fridge) whenever it wasn't in use and our usage (for two people a month) is less than £18. We don't have gas, so this amount also goes to heating water and it rises a touch when winter kicks in to account for the bast@rd storage heaters.

Deestar36

3Dogs wrote: »

As you have said, you don't quite know where your money goes each week/month, so I would highly recommend a spending diary to allow you to see where you are going wrong

With the items you have listed as 'not saving for at moment' some of this is essential (you mst have buildins/contents insurance - sort this out and pay monthly, prescrptions - if you need more than 14/15 a year take out a pre-payment certificate currently £10.40 x 10 months). Other items are not essentials so could be reviewed - if you are serious about clearing your OD then can you afford £130 pr month on entertainment? Not saying don't go out but just be careful in what you spend

But I do get your drift - putting the £176 or so against your OD will get it down quite quickly and you will be in a better position - BUT do remember that Christmas is coming and this is an expensive time for us all so don't be too hard on yourself pet - you do still have room to manouver within your budget

Good on you for sorting it out now before it gets too far out of hand :T

Hello 3dogs,
Thanks for your comments above.

I have got bldgs/contents insurance, but paid for it in one lump sum. I want to be in a position now to save an amount monthly so when this comes round again, the money is there. Thanks for all your other comments too.

Just a quick question regarding the spending diary; as I've never kept a spending diary before, do you just literally write down what you've spent each day etc. and on what? Do you review this weekly so you can see where you've wasted your money perhaps? (Sorry if these questions are obvious, just want to get this right).

Thanks,

Deestar36

misscousinitt wrote: »

I know you want to get your OD down, but it might be advisable to put a bit aside for Christmas pressie shopping over the next couple of months and only spend that amount so as not to get into anymore debt for Christmas.

After the OD is gone, I would still make the following changes - Clothes - £20 pcm (this is £240 per year - this is what I budget for clothes and this is plenty - even if you need to buy a suit for work once a year!) Cut the Christmas & Birthday Budget to £25 pcm - Haircuts - do you have them EVERY month - I have mine done every 6 weeks or so. Everything else seems pretty good as long as you do save what you need to.

Good Luck

Hi misscousinitt,
Thanks for your comments - I'll have another look to see whether I can put some money away as suggested for Xmas, may need to seriously think about who I actually buy for this year - limit it to perhaps the children within the family!

The monthly amount i've allocated to haircuts is actually based on having 2 cuts per year - just want to be able to put the money away monthly so i know its covered.

Thanks though for your comments, all taken on board.

Deestar36

Dear all,

Many thanks to you all for all of your comments - I'll take them all on board. Xmas is slightly worrying as I definitely don't want to get deeper into an overdraft to pay for it!

The spending diary is an interesting option as I've never done this. I have asked 3Dogs how this actually works, so I'll await these comments with interest.

Thanks again to all !

beanielou

A spending diary is so you can see what you do with your money each week/month.
For example I record how I spend any cash that I spend.
I know that my biggest failing is the odd coffee & something to eat if I am out and about.
It might help if you also list your debts.