How much for clothing/birthday/emergency funds? New SOA

[Deleted User]

RockPaperScissors wrote: »

No wait!

Sorry that should be half!!!

Groceries etc. ......................... 150

That's more like it.

£600 is approx what I spend on Rent, Council Tax, Water, Electricity, Gas and Food.

With the amount you have left, according to your SOA, you could be free of your unsecured debts, in less than three months.

I appreciate they're 0%, but what if (heaven forbid) your financial situation suddenly took a turn for the worse?

That extra £75 in your pocket, could make a big difference.

RockPaperScissors

That's really good!!

We end up totalling £700 each currently, though we may actually be paying more than we need to for a couple of things but it's nice to have as a buffer especially with the OH being self employed

Tixy

Thats starting to look sensible and also looks like you should have a reasonable surplus.

I know what you mean about the first few grocery shops when you first have your own place - you have to buy everything the first week or so including all the bits and pieces that might last months.
I think its sensible to leave your grocery budget at that level for a bit, but hopefully in time you get a better feel and might be able to reduce it.

That said you might find gas & elec end up costing a bit more overall (depending on what your property is like). Its always hard to judge over the first few months, but you are being sensible in trying to work out a budget right from the start.

Looks like you'll be able to easily repay your debts before the 0% deal ends which is great.

RockPaperScissors

Do you think so? I am so torn about how much to throw at the CC what with us ideally needed a few bits for the house over the next few months (not totally essential but just to make it feel more like our home).

Yes I think we'll leave it higher. Last week we spent £40 on groceries but this week we had run out of lots of bits after the first month (tea bags, cheese etc.) so spent £75, but that has stocked us up of Quorn essentials for the OH, 1kg tea bags etc. so I feel like I need some more time to test the food shopping waters at the minute.

EDF supply us and told me that they would calculate based on the previous owners (2 adults, 2 children) which was around £800 for gas and electricity combined last year so I may be over estimateing (and then again maybe we will use more). My best friend said they paid 1200 so I have budgeted somewhere in the middle and with knowledge that I may need to assess the winter months to work out if we're putting in enough.

Thanks for the reply!

FireWyrm

I would put the items you have listed in order. So, a decent emergency fund is a priority without a doubt followed by a few presents and followed by your clothes. Its a bit of a toss up as to the order of the last two, but unless you have holes in your clothes/shoes or you suddenly lost/put on weight, then you shouldnt need to be replacing your clothes regularly as an adult. Children need endless supplies, but adults can go years with the same wardrobe - in fact, many of us girls have far too much that we have probably only worn once. I suggest that if you are stuck for something to wear, it's time to sort out the cupboard and see what's in there that needs washing and using.

In terms of presents, this is a controversial issue since social compliance will demand a certain level of gift for your family and friends. Personally, I dont buy for friends, and only graduated gifts for family. So, the outlaws get the least, my sister in law and her family less and then my own immediate family slightly more. For the last couple of years, Christmas has been home made and birthdays consist of a small present of around £20 and a card. I will push the boat out for my own children, but even that is carefully weighed. I am making a cake on Monday for my 9 year old rather than buying etc.

Emergency funds are a priority because they can save you. My emergency fund paid an unexpected bill last month and I'm keen to replace it as soon as possible. I would suggest that about £200 is sensible since anything more than that is a disaster rather than an emergency and you'll probably need to use another funding method. Of course, the more the better, so an initial investment of £200 with a standing order to the account for about another £20 per month would be sensible.

If you dont already, it might be an idea to think about piggy banking about now. Either have basic accounts with various banks and mentally name them as to their purpose, or, you could have multiple savings accounts with the likes of Natwest who allow you to have as many as you like and give them names. I have 7 savings accounts with Natwest for various purposes and long term savings such as yearly insurance for instance. My 'birthday' fund is in fact Co-Op and has a debit card attached which means I can shop directly using the money rather than having to move it around on the internet.

P.S your energy prediction is wildly short. I used over £1000 last year - not because I cant be bothered to turn off a light, but because energy prices are rising alarmingly. The energy I used to use years ago has been halved but the price is double. You should be banking on £100 a month combined. If you have a surplus at the end of the year, fantastic - that's more for Christmas. However, if you are short, you will be less happy having to find the additional few hundred you werent expecting.

Lastly, if you pay for insurance monthly, switch to yearly. Start this year saving for next and pay on the nose when you renew because most insurance companies whack about 39% interest on for monthly payments. It's wasted money.

[Deleted User]

So when will the grad account start charging you interest on the OD? (if at all) Are there any restrictions etc?

In order to clear the CC completely before the 0% ends you need to be paying £154.02 towards this each month. The monthly surplus in your SOA suggests that you can do this easily.

HTH,

D9

[Deleted User]

RockPaperScissors wrote: »

I may need to assess the winter months to work out if we're putting in enough.

I take it you are both working generally the same shifts (ie. both on days or both on nights, and the same days of the week)?

That being the case, the house won't need heating or lighting, during the time you are at work.

That should keep the energy bills down.

RockPaperScissors

FireWyrm wrote: »

I would put the items you have listed in order. So, a decent emergency fund is a priority without a doubt followed by a few presents and followed by your clothes. Its a bit of a toss up as to the order of the last two, but unless you have holes in your clothes/shoes or you suddenly lost/put on weight, then you shouldnt need to be replacing your clothes regularly as an adult. Children need endless supplies, but adults can go years with the same wardrobe - in fact, many of us girls have far too much that we have probably only worn once. I suggest that if you are stuck for something to wear, it's time to sort out the cupboard and see what's in there that needs washing and using.

In terms of presents, this is a controversial issue since social compliance will demand a certain level of gift for your family and friends. Personally, I dont buy for friends, and only graduated gifts for family. So, the outlaws get the least, my sister in law and her family less and then my own immediate family slightly more. For the last couple of years, Christmas has been home made and birthdays consist of a small present of around £20 and a card. I will push the boat out for my own children, but even that is carefully weighed. I am making a cake on Monday for my 9 year old rather than buying etc.

Emergency funds are a priority because they can save you. My emergency fund paid an unexpected bill last month and I'm keen to replace it as soon as possible. I would suggest that about £200 is sensible since anything more than that is a disaster rather than an emergency and you'll probably need to use another funding method. Of course, the more the better, so an initial investment of £200 with a standing order to the account for about another £20 per month would be sensible.

If you dont already, it might be an idea to think about piggy banking about now. Either have basic accounts with various banks and mentally name them as to their purpose, or, you could have multiple savings accounts with the likes of Natwest who allow you to have as many as you like and give them names. I have 7 savings accounts with Natwest for various purposes and long term savings such as yearly insurance for instance. My 'birthday' fund is in fact Co-Op and has a debit card attached which means I can shop directly using the money rather than having to move it around on the internet.

P.S your energy prediction is wildly short. I used over £1000 last year - not because I cant be bothered to turn off a light, but because energy prices are rising alarmingly. The energy I used to use years ago has been halved but the price is double. You should be banking on £100 a month combined. If you have a surplus at the end of the year, fantastic - that's more for Christmas. However, if you are short, you will be less happy having to find the additional few hundred you werent expecting.

Lastly, if you pay for insurance monthly, switch to yearly. Start this year saving for next and pay on the nose when you renew because most insurance companies whack about 39% interest on for monthly payments. It's wasted money.

Great ideas thank you!

I didn't realise you could have several saving accounts with Nat West so I'll look into that as I would quite like to be able to name them as you mention. Saves getting confused with all money going into one place!

I'll also look into adding a bulk sum into my emergency fund as you suggest, sounds like a good way to kick things off!

Thanks for the advice on energy! We are working on £1000 per annum at the moment so you may be right about adding an extra couple of hundred on to that to be safe. It's so hard knowing what to budget for when you've never had to pay it before!!

RockPaperScissors

Domino9 wrote: »

So when will the grad account start charging you interest on the OD? (if at all) Are there any restrictions etc?

In order to clear the CC completely before the 0% ends you need to be paying £154.02 towards this each month. The monthly surplus in your SOA suggests that you can do this easily.

HTH,

D9

That sounds do-able!! Thanks for doing the maths for me

I have no idea! I thought it was only supposed to be a year after graduating that it was 0% but they have never started charging interest (graduated 2010)!! Will keep a close eye though

RockPaperScissors

Bedsit_Bob wrote: »

I take you are both working generally the same shifts (ie. both on days or both on nights, and the same days of the week)?

That being the case, the house won't need heating or lighting, during the time you are at work.

That should keep the energy bills down.

We both work during the day and are in evenings and weekends. Whereas our friends who gave us their price have one of them working and the other at home with the baby all day using a lot of electricity.

We haven't used heating since we moved in last month and just use minimal electricity to watch TV in the evenings