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

[Deleted User]

RockPaperScissors wrote: »

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.

There's were your savings will be made.

RockPaperScissors

Thanks! That's why I'm hoping my £1000 estimate will be OK - they also have a larger three bed end terrace house while ours is a 2 bed mid terrace which seems to get (steal) lots of lovely heat from the neighbours!

[Deleted User]

RockPaperScissors wrote: »

Thanks! That's why I'm hoping my £1000 estimate will be OK

I think it will probably be more than enough.

I live alone, and work a 6 on 3 off (day time) shift pattern.

My annual payment for energy is £504.

If, after the first year, you find yourself hundreds of pounds in credit, don't forget to ask for a refund, and a reduction in monthly payments.

RockPaperScissors

Thanks for the tip! Still not 100% on how the whole credit/negative stuff works with energy at the moment but I'm sure I'll soon find out seeing as it looks like summer will never arrive!

FireWyrm

Bedsit_Bob wrote: »

There's were your savings will be made.

There'll be a baby along sooner or later. Best to get things off on the right foot now so they wont be surprised later.

RockPaperScissors if you can do most of what we have suggested (and all the indications are that you are taking it on board) you wont go far wrong in life. We all wish we had done what you are doing. That's not saying that you will never meet adversity because you almost certainly will, but if you plan ahead, the impact of that adversity will be minimised.

You will learn over the next few years what bills should be as you go and what you feel comfortable with. For instance, your food bill is far more than I spend on two adults and three children. We manage on about £200 but I could do it for £100 if I had to. I choose to spend £200 because I like lots of ingredients, but we could exist on a reduced protein diet for half that if we had to. It's not comfortable but is do-able.

I also suggest a longer term savings plan which you can work on when you are debt free. On the basis that bills such as your mortgage, council tax, petrol etc are pretty much required month on month regardless of what else is going on, I suggest that you have a 'shtf' fund (!!!!! hits the fan). This should have at least 1 months mortgage, council tax, petrol, food etc. This fund should be hard to get to but not hard enough that you cant get it if you need it. This fund should NEVER be touched except in case of real adversity...essentially, it's a self administered redundancy insurance. More is better, so dont be afraid to add to it. If you wanted to buy critical illness insurance, put the money you would have spent on that in this fund instead.

Another fund you will invariably need is a dental fund. With the cost of a check-up for an adult topping £45, a sensible sum of around £30 a month into one of those shiny new savings accounts will be a good start. At the end of the year, you will have enough to cover a filling and a cap, or an accident in most cases. Of course, toothpaste is a good precaution, but an accident which removes a few teeth will cost over £1000 to correct - trust me, I know.

RockPaperScissors

Thanks FireWyrm!

Oh lord - no babies thanks ;-) (at least not for a while I hope!!) But I do appreciate that I need to consider that at some point.

Thanks -really appreciate the encouragement - nice to hear that people think this is a sensible plan and that I may even be able to pay off the debt I have left by the end of the year.

I have spotted these shtf funds and think it's a great idea. Spotted the thread the other day about having at least 2 months wages saved which is a great idea and one I'll certainly look to do when I have cleared the remainder off the CC.

Dental is a good point! As an ex-dental nurse I am pretty cautious where my teeth are concerned so I should definitely factor that in - thank you!

[Deleted User]

RockPaperScissors wrote: »

Still not 100% on how the whole credit/negative stuff works with energy at the moment

It's pretty straight forward.

I take it you pay a fixed amount per month, by DD/Paypoint Card?

If so, then the amount you pay each month, goes toward your quarterly bills.

Anything in credit after a small (eg. summer bill), is put toward the next bill.

If the bill is a large one (eg. a winter one) and the amount you have in hand is less than the bill, you are in debit, until your next payment(s).

Over the course of a year, the total of your payments should slightly exceed the total of your bills.

If the payments add up to less than the bills, the company would want the payments to go up.

If, however, the payments add up to a lot more (eg. a couple/few hundred pounds) than the bills, you should be asking for a refund and a reduction in monthly payments.

If you don't get a refund and reduction, you are giving the company an interest free loan.

RockPaperScissors

Ah I see!

They put me on cash/cheque payment which they said means I give them a reading each quarter and then pay. Does this differ? Does it mean I will always just pay what's owed?

They said I could switch to monthly DD if I want though which does save me around 6% I think?

Saying that now...now sure why I haven't done that with that sort of saving!!!

[Deleted User]

Are you saying you make a payment to them each month, or is the 2 lots of £20.83 you have listed on your SOA, just what you put aside, to pay the gas and electricity bills?

RockPaperScissors

It's just what I put away at the moment (worked out from the 1k estimate we're going on) Just so I can make sure we are putting something away all the time