Will the 60(ish)% solution work for us? Here's hoping!!

DaisyMeRollin

Whilst this is my first post this certainly isn't my first go at getting my money under control. I've never been one to get into huge amounts of debt but I seem to alternate between periods of being completely on the button with remaining frugal and vigilant with my money and then saying 'to hell with it! I'm going to treat myself!' Lately there have been quite a few changes in my household which has meant that we have to reasses a few things. 2012 will be our year to get ourselves on track and ready for the rest of our lives.

There's a few changes I've started so far and I do love a good spreadsheet :shhh: and playing around with the figures has really spurned me on. By the end of this year our debts will be paid off, savings will be in accounts and I WILL have a nice pretty home! :j

DaisyMeRollin

The Plan

A few months ago I stumbled across a budgeting plan called 'the 60 percent solution'. Also known as 'budgeting for the non-budgeter'. The premise is pretty simple and I guess pretty similar to piggy-banking. The person who introduced it suggested that you limit your commited expenses to 60% of your income then earmark 10% of the remainder to retirement savings, 10% to long term savings, 10% as an emergency fund and the final 10% as fun money for you to do what ever you wish with. I liked the idea of how it seemed to simplify things but when I started crunching the numbers I saw there was no way I could get all of our major outgoings in the 60% bracket and whilst it would be great to plow that much money into savings it seemed a bit pointless to have a plump savings account when there isn't a single room in my house which doesn't need something doing to it.

So here's my alternative version:

70% = Commited expenses (bills/dinner money/regular expected outgoings).
10% = Debt repayments (which will become the ISA fund when everything's paid off).
7.5% = DIY fund (which will then become mortgage overpayments when the major jobs are completed).
7.5% = Occasional expenses (Annual bills like car tax and Birthday/Christmas presents).
5% = Fun-money - which is really just for anything non-essential (clothing, haircuts, kids clothes) and will hopefully stop me feeling the need to treat myself.

As I'm on a career break at the moment to look after my kids aged 1 & 3 so it's only my husbands income to take into account. As that's paid weekly and is usually a standard amount I've set up a standing order which sends the percentage I've selected into separate savings accounts so the money is in the right place without me even thinking about it! A bit of a faff to set up but now I can just let it do it's thing indefinitely!

Finally, just to make it a little easier to keep track of things when I'm out and about I've downloaded the Account Tracker app on my phone, entered all of the accounts, DD's and SO's so it can help me plan things a bit. The balances of debts are on there so I can keep track on how far I have to go and I've even added 'accounts' for my change purse and our change bowl at home so I can track the pennies. Far too many times in the past I've had to break into a note for something small and the rest of the money mysteriously disappears too...

Well, that's the plan at least. It may seem overly complicated but it's a plan I feel comfortable with, which I guess is the important thing!

DaisyMeRollin

So my challenge for the next week or so is to use up whatever I have in the cupboards/freezer before getting another shop in, although I'll probably make a call into Lidl on Saturday morning to hopefully pick up some of their half-price packs of mince (£1.09 for 500g) and will pick up some perishables whilst I'm there. Today was an interesting attempt at a pasta bake which consisted of a tin of tomato soup, tin of beans, tin of value tuna, brocolli, pasta (surprisingly...), all topped off with a sliced ball of reduced-fat mozzarella which was reduced AGES ago but has somehow stop the test of time in my fridge! I felt like a student again! The husband enjoyed it so much he decided to finish off the portion I left for tomorrow/the freezer :mad: and the kids enjoyed the pasta at least!

Itsadogslife_2

I am liking the idea of that basic calculation - like you, I am not sure that my basic outgoings are more like 70% and with debts I am probably close to 100%.

I am also using the contents of the freezer together with the contents of the store cupboards - I could do with some fresh produce tomorrow which I will get from the village co-op - to be honest, they are quite competitve on price and no petrol involve in driving to the nearest supermarket

DaisyMeRollin

Itsadogslife wrote: »

I am liking the idea of that basic calculation - like you, I am not sure that my basic outgoings are more like 70% and with debts I am probably close to 100%.

I am also using the contents of the freezer together with the contents of the store cupboards - I could do with some fresh produce tomorrow which I will get from the village co-op - to be honest, they are quite competitve on price and no petrol involve in driving to the nearest supermarket

I did have a bit of a shock when I had a look through the cupboards and found a huge pile of tomato soup as well as a good few cartons of passata. I think most of our upcoming meals will be red in colour!

I think in a few months my aim will be to try to get the 70% figure down a bit but I don't want to do too much too fast and become disheartened. At least I know I'll still be able to have a few luxuries (Sky etc) as they'll come out of the fun-money which should make cutting down on other things seem not so bad!

DaisyMeRollin

Wel today's food was equally as studentish but to be fair it was mainly because my OH was in a rush to get to work so I didn't really have time to prepare anything. He was 'treated' to some homemade chips (made mainly in the microwave - we have a setting which makes them go amazingly crisp!) a jar of 5p curry sauce that we's bought out of sheer curiousity but didn't have the guts to actually try, and the remains of a pack of frozen chicken-style quorn. It wasn't too bad but not exactly healthy! I think I'll be making up for it tonight with plenty of veg!

I'd been trying my best for the last few weeks to get absolutely everything sorted before the beginning of the month so we could start paying things off in earnest. Aside from our mortgage our only debts are £67.29 (was £201.17) to a Tesco CC, £1061.30 to my Natwest OD (formerly my student account and only just starting to pay any interest on it), and a grand total of £1072.25 on a HSBC CC in my husband's name. We had agreed that we would pay off the Tesco card first as it would be cleared in full by the end of Jan and could be forgotten about entirely, then we would move on to the HSBC card and then finally the Natwest OD. It seemed to work best this way as my OH had told me he'd last made a payment to his HSBC CC only a few weeks back so we were safe to use the full balance of the 'debt repayment' account to pay off a chunk of the Tesco CC and by the time the HSBC card needed to be paid again more money would've been set aside to make the next payment. Turns out he miscalculated, the payment was due today and there was NO money in that account to cover it! After a bit of shuffling around money from other accounts we managed to borrow money for the time being to cover it (I really don't want to start robbing Peter to pay Paul but I will accept a loan from him for now...). To add to that he decided to list a load of things (mainly car related) which are due out soon which he forgot to mention in the solid month I spent nagging him to get everything in order. So it looks like the next few weeks are going to be a little more challenging than I'd hoped since we've not had the chance to build up the reserves we need but it's certainly do able.

DaisyMeRollin

I have a feeling that I tend to annoy my husband somewhat by always wanting to plan things. I think planning things scares him a little as at the moment he knows that everything will be paid off 'at somepoint' and that's all he need to know. He doesn't want to think that he'll be in debt until XX/XX/XX. I like to plan because 'at somepoint' just isn't enough for me - I want to know the specifics so I know when we can get on with the rest of our lives. It turns out that this time planning seemed to be the right thing to do because the truth is the end point is actually very scary at all! It's downright encouraging! Debt 1 will be paid off at the end of this month, Debt 2 will be gone at the end of May 2012, and the OD will be free and clear by October! 10 months is certainly managable! After that we can move on to overpaying our mortgage, which I must admit will be a scarier concept but at least it will feel like every step we're making is to better ourselves and not trying to climb out of the hole we've dug. What really spurred me on is the realisation that we're currently able to overpay debts, cover outgoings, save a little bit and have a bit of wiggle room for fun too. We can get ourselves into a great position for when I do go back to work when my youngest starts school and at that point we won't need any regular childcare so will be about £800 better off each month. If we used that money to overpay our mortgage we would be mortgage free in 5 years. I'm 25, being mortgage free at 30 can't be a bad thing and since the kids will still be so young we'll be able to really set them up for the future. I have no doubt that life is going to do its best to get in the way at every possible opportunity but this dream will at least keep me on track for as long as we do have control.

LBTW

Just wanted to drop in on your diary, say hi and wish you luck!

You sound very organised, I'm very impressed (and can only dream.........)

I'll be watching how you get on with interest - all the best.

DaisyMeRollin

Some would say organised, others would say anal-retentive... Lol.

DaisyMeRollin

So life seems to have had it's first attempt at getting in the way already. I just checked the pending transactions on the account to see how much pay was going to be deposited this week and it's a grand total of... £19 :eek: :-( Not quite the just under £500 he usually gets. I do forget that whilst his pay is exactly the same each week (unless he works overtime) he isn't actually salaried so it does depend on his hours worked. Looking back his pay before Christmas took into account holiday pay but that's my own fault for not paying close enough attention then to figure it out. So this means there's be a few changes to be made. The SO's will be cancelled for this week and it looks like my girls trip to Butlins won't be happening :-( It's a shame because although the weekend itself is paid for (only £50pp) but I'd hate to think how much I'd end up spending once there on food/drink. Even if I try to be as tight as possible there'll still be the coach to pay to get us all there. Technically the money for this would be coming out of the fun-money pot but since that isn't going to be paid this week and some of it'll be used to cover stuff like Roller Derby subs and Sky each month I need to keep that account in the black.

It's annoyed me how much impact this one week has made as thanks to this we're going to be dipping in and out of OD each month after the mortgage has gone out pretty much for the next year! I'm going to have to really try stretch the grocery budget and make as few trips in the car as possible to try to make it up. I know I shouldn't complain, we're only being paid what's owed but it hasn't half messed up my spreadsheet!

DaisyMeRollin

Turns out 5am isn't the best time to be working on the budget... After a bit of stress of playing around with figures and trying to make up for the lack of real pay this week I realised that I had forgotten to actually put the child benefit money into the spread sheet, and since that goes in towards the end of each month and the big outgoings are at the beginning of the next one it keeps us in the black! I just wish I'd realised this a little sooner so I would've had time to go back to sleep for a few hours!