How much should I put by?

ChopinonaBudget

I have a plan - it's not a bad plan, but it needs some tweaking....

I have a savings account with currently £80 in it. This account is for my yearly spends (and some other bits), so that as the account fills up, I have to use my credit card less and less and I slowly become more self sufficient... All good

The problem I have is I don't know how much to chuck in there - I can only put in between £0 and £200 per month (rough off-the-cuff figures) depending on what I have earnt, as I would like the majority of my "spare" income to go on overpayments.

My question is this... Even though I (for example) need £250 per year for school uniform, and £450 for car insurance, they don't come out at the same time, so I probably only need maybe £500-£550 to cover each before it tops up again for the next spend. Knowing that, how much should I aim to put away? I know I don't have to have the whole lot in there at once for this to work...

Here's my annual outgoings..... (and yes, some are business expenses, but they still have to be paid for so I still need the money there)

Flute Insurance (due May, I think) - £30
Piano insurance (due May, I think) - £109
Piano Tuning (£57 quarterly) - £228
Misc Business expenses (scores, CDs, ink, paper etc) (paid throughout year) - £240
School equipment (text books, new bag, pencil cases etc) (paid throughout year) - £85
School uniform (due September) - £250
Car Insurance (rough guess) (due Jan) - £450 :eek:
Emergency Fund - £500
MOT (due Jan) - £40
Car Tax - (due July) £135
House Insurance (due August) £180
Presents (half due Sept, half Dec) - £300
Professional fees (due April 2014) - £65

All insurances are currently either on credit card or expensive DD. What I'm trying to do here is be able to pay for these things upfront, but to do that, I'm trying to save for a year in advance, whilst still paying the current one (either paying off credit card or paying monthly)
Emergency fund includes car repairs and MOT related car repairs. My rental agreement covers white goods (and obviously boiler) so if my fridge dies it's not my problem.
My car came with 6 months tax but I don't want to pay 6 months again as it's more expensive
School clothes aren't cheap and are non-negotiable in price (regulation logo stuff) but it does include shoes (black VANS, which last a solid year - anything cheaper and it ends up costing me more)
Piano tuning I could possibly get cheaper but this guy is good, and my piano is a very old Steinway that needs someone knowledgable, careful, and highly skilled. Quarterly tuning is standard practise for professional pianists and teachers.

So, can anyone help? How much do I actually need in that account? Because I'm fairly sure I don't need the whole £2612 in one go!!!! :eek:

Apologies for long post, and thanks

beecher2

As much as possible is the short answer! Your spend is over £200/month which you say is the maximum you can save on a good month, so you need to be putting every spare penny aside. Have you posted a SoA to get help with budgeting - £300 sounds a lot for presents.

ChopinonaBudget

beecher2 wrote: »

As much as possible is the short answer! Your spend is over £200/month which you say is the maximum you can save on a good month, so you need to be putting every spare penny aside. Have you posted a SoA to get help with budgeting - £300 sounds a lot for presents.

Oops, it is, I hadn't realised that! (I have a million spreadsheets, but I never had a monthly figure for that one before)
It's highly possible I can get more away as I gradually pay more off on the credit cards, and get to grips with less DDs for insurance (it's a vicious cycle isn't it? can't save for a yearly sum because I'm paying monthly now)
To be honest, I didn't think I'd be able to put away the £150 odd each month that I need for tax, but I seem to have managed it easily and painlessly, so it might be that the figure scares me but I can actually do it easier than I thought I could....

£300 is for my daughter. I'm the only one who buys for her, except my Mum - she has no other grandparents and no aunts/uncles, except an Australian Great Aunt who sends some $AUS.

I'm ok with my SOA ta, I have one I constantly adjust as income fluctuates (up and down). I've cut back all I can over the last few years, I'm pretty much as sorted as I'll ever be with it

ChopinonaBudget

P.S. that £200 was a wild guess, possibly not even based on my finances!

R_P_W

Just put in as much as you can. You cant put anymore in than that can you? And if you put in less than you can - what would you do with that money?

ChopinonaBudget

R_P_W wrote: »

Just put in as much as you can. You cant put anymore in than that can you? And if you put in less than you can - what would you do with that money?

Overpay debts....
Thats' why I'm wondering what a top amount would be for those figures to enable me to use the account to pay everything out of it, without the need to have the whole lot in there in one go (I'm convinced I don't need to, but I don't know where the tipping point is between the account working and paying for everything and constantly topping up, too much being in there that I don't need for a year so it's wasted in sitting there when it could go onto the Barclaycard, and there not being enough in there to pay the bills that need paying)

To be honest, it's not the monthly amount I'm wondering about - my income type means my monthly balance wildly fluctuates, but I'm used to that now. It's the savings ceiling I'm wondering about - would £1000 cover all of that, assuming it's constantly (if sporadically topped up) or £1750? Or even £800? I really don't want more in there than necessary as I have interest charging debts to pay

Tixy

Do a quick spreadsheet showing outgoings for each month, starting now in March..

Assuming the 2 'throughout the year' items happen roughly equally each month then your highest spend month is Jan at £574 - the good news is that is a long way from now (I've assumed the quartely piano is Jan/Apr/Jul/Oct). If you want to keep in £500 emergency fund at all times then the lowest target amount should be £1074.

Altogether the items total £2612, so you need to top up by on average £220 a month to pay for everything. But if you don't spend the emergency fund then in the second year it only needs to be £180 a month.

If starting from March you put in £250 a month for 3 months then £220 a month then you always have enough to cover everything listed except the emergency fund, and the residual balance will always be above £500 after May this year so covering your emergency fund.

By March next year you could then drop the amount being paid in to £180.

ChopinonaBudget

Tixy wrote: »

Do a quick spreadsheet showing outgoings for each month, starting now in March..

Assuming the 2 'throughout the year' items happen roughly equally each month then your highest spend month is Jan at £574 - the good news is that is a long way from now (I've assumed the quartely piano is Jan/Apr/Jul/Oct). If you want to keep in £500 emergency fund at all times then the lowest target amount should be £1074.

Altogether the items total £2612, so you need to top up by on average £220 a month to pay for everything. But if you don't spend the emergency fund then in the second year it only needs to be £180 a month.

If starting from March you put in £250 a month for 3 months then £220 a month then you always have enough to cover everything listed except the emergency fund, and the residual balance will always be above £500 after May this year so covering your emergency fund.

By March next year you could then drop the amount being paid in to £180.

Thank you! You're an angel and a maths nerd in one brilliant package!
That's exactly the info I couldn't work out myself