Help! Excellent plan of action but don't know how to begin

NoMoneyMummy

As the person at home most often I am going to take charge of all the money. I'm also the most sensible to it makes perfect sense.

Yesterday I sat down and did the MSE budget plan or income/expenditure I'm not sure what it was called. I printed it, rehashed it into categories that work for me and phoned our bank (Lloyds TSB) to set up new current accounts to cover each section.

So I am having accounts for:

• Wages in and any excess money
• Mortgage and council tax
• Non-urgent bills (this includes utilities which are urgent, but as we have had mortgage issues the mortgage and council tax come before everything)
• Housekeeping (includes everything for house plus children's clothes and lunch cover, and petrol as that's mainly my spending)
• Car costs
• Replacing goods (for when the fridge breaks etc, as they do)
• One-off's (Christmas, birthdays, holidays and days out)

It looks excessive but it really isn't and it's how my mind works so it makes sense to echo that on the bank. Lloyds is such a good site to work with it makes this look simple. I'm excited about this as the budget proves we CAN afford to cover everything so I have no idea why we've been struggling so much.

Income

My partner is the main earner and once our second child arrives he will be the only earner for a while - paid a fluctuating wage weekly. Child benefit will be going directly into the Housekeeping account for which I'll have a debit card.

I have worked out exactly how much needs to be transferred to each account on a weekly basis to cover these - the mortgage and council tax will be a standing order, his wages fluctuate so much I want to make sure they're covered whatever.

The problem?


Due to ongoing money issues (long story) we are still behind on a lot of payments, mortgage, council tax, electricity, water...

I know I can start transferring the money from this Friday into the correct places, but how do I then deal with people who want more than I can give them?

What I don't want, is to pay some bills on Friday and have no money left to start organising it properly - as I know that will be a repeat story every week. Every time we need to pay someone a bulk amount that's money not going in the mortgage pot, for example.

Finally...

I don't know if that makes sense at all. I have tried and I know it's long so apologise and thank you if you read it all.

I would be every so grateful for any suggestions. Thanks again for reading.

BASFORDLAD

Hmm i wouldnt concentrate on having different accounts, but instead balancing what you earn and what you spend

pmduk

I suspect that you may find such a plethora of accounts difficult to manage.

NoMoneyMummy

Please don't be rude Mike I came for actual advice not immature comments.

This plan has been devised following recommendation from an excellent financial adviser who knows our complete situation.

Different accounts are really the way forward for us, not for everybody, but certainly for us. Like having jars on a shelf.

NoMoneyMummy

We are only having debit cards for the necessary ones like housekeeping which is for spending in shops.

I've just closed accounts with another bank and now have it all in one place to keep it nice and clean. I'm on the bank site daily at least so can keep a good eye on it all.

Realistically, the car costs, replacing goods and one-off's wont be accessed often at all. They are just there to ensure we have a fund available when it's needed.

BASFORDLAD

NoMoneyMummy wrote: »

Please don't be rude Mike I came for actual advice not immature comments.

This plan has been devised following recommendation from an excellent financial adviser who knows our complete situation.

Different accounts are really the way forward for us, not for everybody, but certainly for us. Like having jars on a shelf.

I hope it works for you

i am sorry about mike , if you have children you know how difficult they can be during school holidays

Hooloovoo

NoMoneyMummy wrote: »

Please don't be rude Mike I came for actual advice not immature comments.

Please don't be offended by Mike, he's just a spammer and will shortly be banned from the forum.

Different accounts are really the way forward for us, not for everybody, but certainly for us. Like having jars on a shelf.

For me personally, the biggest most helpful piece of budgeting advice is to maintain a float in your account so that the cashflow is buffered.

The more accounts you have, the harder this is to do because it increases the amount of money you require to maintain the buffer in every account.

Really no more than two accounts should be required - one for incoming money, another for bills and joint expenses. Maintain a buffer in the bills account, and transfer across the same amount every month from the income account. This results in your cashflow being smooth and predictable.

By all means, split up the bills account into "logical" accounts using a spreadsheet or whatever system works for you. But don't split it all up into different "real" accounts - that just gets too difficult to manage.

NoMoneyMummy

It looks like I'm not going to get any advise based on the actual plan that's in place - so I'll approach it a different way.

In order to budget correctly we have to know how much to set aside each week to cover the necessary outgoings. I wondered if anyone has advice with regards how to start...should I just start doing this, upset a few people (phone to explain) then be on track next month onwards?

Hooloovoo

NoMoneyMummy wrote: »

It looks like I'm not going to get any advise based on the actual plan that's in place - so I'll approach it a different way.

I'm sorry, I'm clearly not understanding exactly what advice you are looking for. You asked for suggestions, you have received them.

In order to budget correctly we have to know how much to set aside each week to cover the necessary outgoings. I wondered if anyone has advice with regards how to start...

Surely you already know how much your outgoings are? To work out your weekly figure, add up all of your expenses over the last year and divide by 52. Add say 20% to cover contingency.

should I just start doing this, upset a few people (phone to explain) then be on track next month onwards?

Not sure I understand this bit at all. Why do you need to phone and upset anyone? If you're behind on payments, presumably you already have an arranged payment plan?

Lokolo

I would do a statement of affairs.

http://www.makesenseofcards.com/soacalc.html

Ignore the fact its monthly, but do it weekly. Work out how much you will spend each week on everything.

Anything left over (however, leave some buffer, maybe £50) you can then split into equal payments to the people you owe. And put this forward to them, or not at all and just keep overpaying to get rid of the amounts you owe.

Hooloovoo

NoMoneyMummy wrote: »

I know I can start transferring the money from this Friday into the correct places, but how do I then deal with people who want more than I can give them?

What I don't want, is to pay some bills on Friday and have no money left to start organising it properly - as I know that will be a repeat story every week. Every time we need to pay someone a bulk amount that's money not going in the mortgage pot, for example.

Ok. I understand the problem now.

It's tricky. But this is the problem with having so many accounts. You will need to temporarily "borrow" from one "pot" while you build up another.

For example, an account that has less frequent withdrawals (such as your "Replacing goods" account) will have to run under-budget for a little while as you build up the funds in the accounts that require more frequent withdrawals or have a higher priority (such as the "Mortgage and council tax" account).

Once you have the important accounts up and running, you can divert some disposable income to building up the less important accounts.

If you had fewer accounts, this problem would almost take care of itself.