How do people stick to their budget?

JimmyTheWig

Hi,

I'm not asking how to lower my bills.
I'm not asking how to work out how much we've got to spend each week.
I'm not even asking how do people manage to shop for a family of x with just £y a week, or how you have the willpower not to buy a drink / snack / etc when out.

What I'm asking is what practical things do people do to ensure they stick within the budget.

So we're happy with our SOA. Gives us £140 a week to cover petrol/car parking/bus fares (not including commuting), food (2 adults, 4 children (including specific dietary requirements) and various animals), household stuff (washing powder, etc), clothes (mainly second hand through Facebook groups) as well as treats and extras (school trips, birthdays).
We find it very difficult to keep to this, but we know that it is possible and, as I say above, how to get everything for our weekly money isn't really what I'm asking here.

The touble is that every month (the day before payday) I do our money spreadsheet and we've always spent more than we should have.
The question is, how can we ensure we only spend what we have each week.
We have an account for spending money which we pay £140 in to each week by standing order. We've tried taking this out as cash, which tends to work best but isn't always logistically possible before we need to spend anything in the week - and even when we do that we hit problems.

For example, yesterday my wife needed change for car parking so took £2.50 out of our "pot" which isn't spending money.
Another problem (which I could sort on my monthly statement by reconciling the cheque books) is when cheques have been written (normally to school) and not yet cashed.
Along the same lines, though not quite as easy to deal with, is £11 came out of my credit card today for school photo money when we'd filled in the form over a week ago and had forgotten about it by now.

Because things were particularly bad this month I have decided to update the spreadsheet every evening to see where things are going wrong. This is how I identified the £11 school photo money and the £2.50 for parking.
I can do that and it is working so far, but has been less than a week and am already bored with it. It strikes me as overkill, just to ensure we stick to out budget.

So I wondered what other people do.

Faith177

My mum has a spreadsheet and she has it saved in e-mail form so she can access it anywhere. She updates it as soon as she pays for anything.

davenport151

What works for me is considering that £11 for photos is gone the minute you write the cheque. Trouble is with these you never know when they will be cashed if its for a school or organisation.
Would the car parking money not be part of the petrol/bus fares pot. (is this a regular or one off spend?).
There's always unforseen expenses. A budget has to be realistic.

In regards to the fact that you are happy with your supermarket spend do have a look at what you buy and wether you could cut back anywhere. For me this was the biggest 'unnesscary' spend I had.
Do you 'plan' what you will eat?Just buying what you will need can make a huge difference.

opinions4u

Round up my estimated bills to the nearest tenner above.

This puts some slack into the budget and means there is (nearly) always enough to cover everything.

I don't account for every penny. I accept Mrs o4u will spend on "miscellaneous rubbish" as it makes her happy. As long as it's not excessive it's not a problem.

Car parks, school costs, bag of crisps, social coffee etc. Not stuff I spend on, but realistic that somebody else does.

Understanding each other's discipline and agreeing what's reasonable is a good start. Building in that rounding slack removes an element of stress from budgeting.

JimmyTheWig

davenport151 wrote: »

What works for me is considering that £11 for photos is gone the minute you write the cheque.

I agree, but how do you do this?
The easiest way is to pay £11 cash into the pot in the cupboard that isn't spending money. But that relies on having the right amount of change.
Alternatively it would mean not withdrawing the full amount of spending money as cash and then transfering £11 from the spending account into a non-spending account. But that involves logging on, etc, which isn't always convenient.

Would the car parking money not be part of the petrol/bus fares pot. (is this a regular or one off spend?).

It would be part of that pot, but that's not a fixed pot. That's part of the £140 a week spending money. In some ways, as commuting is accounted for seperately, this is all "optional" - is mainly used for children's activities, shopping, etc. If we decide to go somewhere at the weekend then the petrol for that rightly comes out of our spending money as that is a choice we made for that money.
The £2.50 change required for the car park yesterday, for example, wouldn't have happened if it wasn't half term. We could have said our son couldn't do the activity yesterday and not paid for the car park but we decided it was worth it. The problem was having not the right change and so taking the money from the wrong pot.

In regards to the fact that you are happy with your supermarket spend do have a look at what you buy and wether you could cut back anywhere. For me this was the biggest 'unnesscary' spend I had.
Do you 'plan' what you will eat?Just buying what you will need can make a huge difference.

We do regularly look at our supermarket shop. I know that many people on these boards spend an awful lot less than we do each week. But we already buy value stuff where we can, bulk buy where appropriate, buy lots of reduced items. [One of our daughters has specific requirements which makes cutting back for her difficult.]
I know people on the OS board suggest making everything from scratch but while that is a nice ideal I think it is often expensive. There is no way, for example, you could bake biscuits as cheaply as a packet of smart-price biscuits off the shelf.
We don't often do meal plans, but we rarely throw out food (other than uneaten food from children's plates, which is a different ball-game altogether) which suggests to me that we use what we buy so aren't wasting food.
The supermarket shop is an area that we need to tackle. One day I plan to type out the contents of a receipt and see where people think we are going wrong. But I want to get the budget right before we go much further down that route. There's no point spending less in the supermarket to then spend more elsewhere and still go over budget!

JimmyTheWig

opinions4u wrote: »

Round up my estimated bills to the nearest tenner above.

This puts some slack into the budget and means there is (nearly) always enough to cover everything.

Interesting idea. E.g. £86 spend at Tescos is noted down as £90, meaning we have £50 left. Which means if we take £2.50 from the cupboard we'll still be ok.

I don't account for every penny. I accept Mrs o4u will spend on "miscellaneous rubbish" as it makes her happy. As long as it's not excessive it's not a problem.

But how do you (between you) ensure that it isn't excessive? She could buy reasonable "miscellaneous rubbish" throughout the week and it would become excessive. I think that this is one of our problems. In our house it is typically my wife buying "miscellaneous rubbish" for the children.
My view is that any spending is fine, as long as we come in within budget. It's just a question of how to know if we're within budget or not!

davenport151

In regards to the cheque - making a note of it and leaving it until its convienient to transfer. Possibly at the end of the month?

In regards to the food shopping I find 'if we have more it gets eaten'. So in effect if you buy more it just gets 'eaten up' (sorry!)

You dont need to go completly old style to save a bit. Dont forget to use beans/lentils etc to make the meat go further. Have a veggie night once a week.

Jennifer_Jane

I think you are right in updating the spreadsheet more often than you were. Once a month is after the horse has bolted. I just do mine from bank details every couple of days although direct debits are already there of course. I hope you are using Quidco or Topcashback for shopping (it's been a few years now but I am up £2,000 tax-free).

My spreadsheet has a column each for credit card spend; current account spend; state pension income; and company pension income. On the spreadsheet also are totals for each of my bank, savings, ISAs, and credit card accounts, as well as the formula for my tax, so that when pensions etc go up every year (please God!), I can work out what the correct tax will be. HMRC are notoriously inaccurate.

The over or under-spend from one month goes through to the following month and has to be made up asap.

I would also show the children to get them used to budgetting and show them what goes on if income is lower than expenditure.

A spend of £2.50 in cash wouldn't go on the spreadsheet, but ALL credit card and current account amounts are (cash comes from supermarket cashback, so gets recorded with that supermarket purchase). I try to use my credit card for everything as I get 1% cashback for using it. So for a cup of coffee, or cinema ticket, anything, I'm unapologetic about the smallness of the amount - unless it's under £1 or so.

*zippy*

I do a budget on payday and add in £20 a week for miscellaneous spending that is taken out as cash. Budget is then just checked once a week to make sure it's ok. I do it on paper so anything spent, but not gone out I note. Last year I bought furniture from John Lewis with debit card and it was weeks after delivery that they actually claimed the money so it's not just cheques you have to watch.

Southend1

All my bills go out just after payday by direct debit. The remainder is diverted by standing orders into several different accounts e.g. one for clothes, one for groceries, etc. That way if there is no money in the account for clothes I can't buy any new clothes. If there was an emergency e.g. need money to fix boiler and I didn't have enough in the house repairs fund, I would take from other accounts knowing that by doing so I will not be able to buy the things that money was originally allocated for.

InsideInsurance

You seem to have multiple accounts because you mention about doing an SO to put the money into the daily living/ spending account.

The thing with the cheque issue etc is simply to write the cheque out of the another account - it could be the main account or a third account just not the living expenses one. As soon as you write the cheque do a transfer into the account that itll be drawn from and then you can forget about it.


In general I've always found the best way to budget is by having cold cash as it is much easier to see as it gets used up and adjust spending to ensure it doesnt go too early.

The challenge with budgeting at this sort of level is the larger regular purchases which you will do much better bulk buying but harder to budget for. Selective shopping at Makro can get many things at up to 50% off but you have to buy 6 months supply at a time. Great for the annual budget but makes it difficult for that week. Whilst you could say that 6 months washing powder is £X and so you need to put £Y a week aside but that then becomes even more complex