do bugets really work

earwig

hi sorry its my lazy typing it should read petrol

Xbigman

After 6 years of budgeting I can say they do work. I can also say that budgets evolve over time. At the start the biggest problem comes from once a year costs being lumped together and not spread out, and like toast always falling butter side down, everyone starts a budget just before the yearly bills are due.

Try splitting some things up. Pay your car insurance monthly. Its a bit dearer at first and you need to oversave in the first year to have it on hand for future years but it helps. You can pay car tax 6 monthly, oversave slightly and eventually switch to the cheaper yearly payment.

Its generally easier to start with all your yearlies in one account rather than individual pots. That way you don't worry about specific odd amounts all the time, but in the first year you do need to put in extra to get started.
Regards


X

southernscouser

I probably shouldn't admit to this but I don't really budget properly!

Don't get me wrong I know every penny coming in and out. I've got 12 months of spending diarys and did an 'annual review' if you like, so I can tell you what everything costs me on a monthly average. But, I don't put money away for the biggies like car insurance or anything! I know I should but I'm worried by doing that I'm gonna leave myself short during normal months if I overspend.

This is my one big weakness when it comes to money and I do need to sort something out! Maybe next year! :think: :rotfl:

chocolatefish

Agree with the others who say that it improves with time. We've been budgeting with a excel spreadsheet for about 2 years, and with Microsoft Money for a few months. The keys tricks for us are to:

1. Budget realistically - that means finding a balance between what you need to spend and what you can afford to spend.

2. Try to account for every single penny that you spend - we do it by having a 15 minute accounting session EVERY SINGLE DAY, where all spends / incomes are put into m/soft money and the bank statements balanced. Other people do this by using a spending diary. Whatever method you use, you need to check what you have actually spent against the money that you have allocated to that category - that's how you see where you are over or under spending and on what.

3. For expenditures like car tax, you need a seperate 'pot' to be accumulating to pay for them when they fall due. We have a second bank account ('bills account') and we transfer an amount of money after each pay day to cover all bills and non-monthly expenditure. That means that when the time comes to pay the car tax, the neccessary amount is sitting in that account ready to be used. Whether you use a jam jar in the cupboard, a china pig or a seperate bank account, you need to be stashing that money somewhere else - otherwise it's too tempting to use it elsewhere.

Good luck, it does get easier with experience.

jackieb

I pay everything by direct debit. On the day my OH gets paid, there is a standing order and £1250 is paid directly into a second account. In that account we have all our direct debits set up, mortgage, life/home/house/car insurances, phones, TV licence, gas, electric, car loan, council tax, etc. Before, I always used to get reminders or red letters for being late. I've done this for years now.

We have a third account where I will put some money aside for things like car servicing/MOT/new tyres etc. I then transfer this into my current account (the one with the debit card/chequebook) when I need to use it as I don't have any bank cards for this account. We also have bought a new computer this month. Interest free if paid within 6 months. I'm putting some aside so I can pay it off without getting charged the interest. It's written in my diary when it has to be paid of by.

I do most of my banking online. It's very handy to keep an eye on things, and easy to transfer from one account to another.

I need to put more aside for things like birthdays and Christmas. One day I hope to pay my insurances up front and not monthly, as this always costs a wee bit extra (but it all adds up). I've just never managed to save enough to do it yet. You do get some off your bills if you pay your gas/electric and phone by DD though.

lynzpower

hi hun

really the issue I think again is back to the food shopping. I know you have tried, but 320 is still an awful lot. I reckon there is at least a 70 saving there, and thats being generous with your shopping too

Bear in mind also that if yous are smoking at 30pw each you need to minus 260 a month from there. Honestly this is probably why you are so skint.

You know the options, go onto rollies, give up, but you wont until you are ready.

I have been half giving up, but one thing which has really helped is that when we were sorting the flat out we have started smoking outside. I havent given up, but IM smoking only a couple a day now instead of 20-0dd. Honestly, I havent noticed ( aside from the money :money:) . Also I have used flylady as a distraction. I used to sit here chain smoking all day but now I dont. It has to be worth a try. Losing out on days out and holidays and buying the neccesities of life too, it just cant be worth it- can it?

Imelda

Wise words Lynz, I have never smoked but it wasn't until I started keeping a spending diary that I realised how much I "snacked" during the day- I could easily spend £10 per day on lunch, a couple of coffees and a chocolate bar. I now bring my own lunch (I am going to be sick of pumpkin soup soon!) and spend less than £10 per week.

earwig

hi thanks everyone a couple of points smoking we do smoke roll ups and it 30 per week for both but thats still 120 wasted each month i know the food s a big problem for me i should be honest and say on top of that 320 per month there is another 120 in bit and bobs you know milk bread sweets forgot to get somthing out for dinner type of thing and each week i try hard not to do it but somthing alawys gose wrong also a big roblem is that we get paid weekly but every one wants paying monthly so out of weekly money we have to pay monthly amounts if that makes sence so some week there is more money than others any ideas on how to deal with this

Debt_Free_Chick

earwig wrote:

see when i just do this i have spare money but as soon as i add car tax birthdays hair ect it just drips away sorry if this isnt making sence

But what are you doing with that "spare money"? You must be spending it somewhere - have you tried to keep a spending diary? This will show you (1) where that "spare money" actually goes and (2) if your budget is actually right, or whether you are really spending more on some things than your budget allows.

As for car tax .... you simply must have a monthly budget for this. Take your car tax and divide it by 12 - then put that amount in a savings account each month. After 12 months, you will have the money to buy the tax. Same with birthdays, Christmas etc. You must put an amount away each month into a savings account - you then dip into that account when you need to ..... BUT only up to the amount you have budgeted for.

In addition, put some extra into the savings account to build up an emergency fund, so that if you have an unexpected expense, you have some money to pay for it.

food s a big problem for me i should be honest and say on top of that 320 per month there is another 120

This is a crazy amount :eek: Have you tried a meal planner? You plan out (roughly) the meals you will eat for the next week or so and then buy food according to that menu. Remember to take stock of what you already have in cupboards and the freezer and plan some meals around those things too. Otherwise, you are forever buying food and then chucking stuff out that you never get around to using.

also a big roblem is that we get paid weekly but every one wants paying monthly so out of weekly money we have to pay monthly amounts if that makes sence so some week there is more money than others any ideas on how to deal with this

Taking your car tax as an example .... simply take the annual amount and divide it by 52. Put that amount away each week.

For monthly bills, multiply them by 12 and then divide that answer by 52 - this is the amount you must put away each week to pay your monthly bills. Don't simply divide the monthly amount by 4, as you will end up with a budget for 48 weeks and you need one for 52 weeks.

You probaly need a little "kick start" to give some extra money to start off your savings account. Food/groceries will be the easiest way to do this. Have you tried the Storecupboard Challenge on Old-Style? This is where you try to live off what's in the cupboards/freezer for the next month and spend a minimum amount on food. If you could do that in November, you could have £200 (or more!) in your savings account at the end of the month. Or it would pay your car tax

HTH

lynzpower

A storecupbard challenge is a goodplace to start. If you can simply eat up what youve got in, that has to be a good idea.

Earwig, post up what youve got in the cupbards/ freezer on Old style and I and others will help you with it

Also, I know you have had struggles when you pop in to the shops for a loaf and come out with loads more other stuff

Hve you thought of getting a breadmaker. There are loads on freecycle, but I got one for 15 quid delivbered the other day ( details on old style) and its absolutely BRILL! Bag of flour costs 80p, yeast a quid, and youll get about 8 loaves out of it, plus it might help you avoid the shops.

You can get your little princess to help with it, and if you are baking adn stuff together it saves you going to the shops and buying, if shes making buns or whatnot "herself"

In terms of budgeting again

You need to sit down and work out exactly what needs to go where. If you find yourself dipping into savings then car tax stamps might be a good idea.

Now you have to find the csh for the car tax now - got anything to sell?