Don't know where to start with budget!

Bumbelina

Hi, I'm hoping for some advice about how to complete the Budget Planner. I thought I had all the right information to hand and filled it in, but it came out with a massive underspend when in reality I'm struggling every month to make ends meet. Obviously, I've done something wrong. A lot of the figures eg. cleaning products, days out, clothing I had to guess because I haven't kept track of my spending on individual items like that. I must have seriously underestimated a lot of stuff. But does this mean I have to keep a spending record for a year before I can do the budget? I'm desperate to get my finances on track and don't want to wait that long. My bank statements don't show a breakdown of everything either because some items are bought with cash and also I tend to buy a lot of stuff at the supermarket and don't keep the receipts.

Please advise me on how to get started with this. I've done endless budgets in the past and they've never worked. Basically, they just end up as a wish-list of how I'd like to think I spend my money! I know I overspend on food and booze and those are the logical items to cut back on, but I also know I need to put money away for big one-offs and other expenses that crop up through the year and catch me out. I do often put that money away but then end up raiding the savings to bail me out at the end of the month.

I really need to get on top of this now as I'm utterly fed up of worrying about money and living hand to mouth all the time.

Any help much appreciated.

RAS

Hi

Start doing two things

1. Start a spending diary that you use to record every single expense.

2. Get hold of the last 6 months statements and allocate every expense to a category in the sense of cards SOA.

Tixy

Hi

I would start from today keeping a track of every single thing you spend (from 50p cash on a bar of chocolate to £60 on a new item of clothing up to your mortgage/rent payment). After a month you should have a much better idea as to how much you spend in set areas.

Rather than use the budget planner a lot of people find the statement of affairs calculator a little easier to use - as there are less seperate sections (eg just one code for groceries, not separate ones for food at home, drink at home, household & cleaning etc).
http://www.makesenseofcards.com/soacalc.html

When doing the calculator try to work out annual estimates for things and divide by 12.
You will certainly underestimate and overestimate some (clothes is one people usually underestimate by the time you factor in shoes, accessories, new coats, new underwear as well as the clothes you automatically think of such as new tops/dresses/jeans etc).
But hopefully for things like say car maintenance and similar items you should be able to come up with a fairly realistic figure.

Once you've done the SoA you can then compare at the end of the month to your actual spending diary and that first month usually identifies a lot of items. Then in subsequent months you can keep a track and amend it if necessary.

Also if you complete and post your statement of affairs on here people should be able to spot if it looks like you've missed anything obvious out or underestimated something significant.