MF before I'm 30

YoungBaker

Hi all - hope you are all well.

Things are good here. Weekend was super fast as always and probably wasnt the most money saving as we treated ourselves to some clothes shopping.

Had quite a productive day yesterday though and got on top of all the paperwork and feeling organised and in control again. We have figured out the different savings pots we have on the go at the moment and the sort of targets we are looking for each one. Regarding the baby fund - do any of you have any idea of what we should be targetting for this? I know babies dont require a lot really but we will need to get everything as it will be our first.

In good MSE news - we managed to cut our food budget for this week (usually what we struggle with most considering there is only 2 of us) and have planned meals just using things we have in the cupboards. Our home insurance is also due for renewal and managed to get a better deal on that. Our SKY 50% Offer also comes to an end next month and they mailed us to say we will be going up to over £100!!! Called them up last night and got a really great guy who chatted it through with us and have managed to keep the same service we have got but will only be paying an extra tenner a month.. I know there is other ways to keep the 50% off by cancelling and re joining later but for the hassle of it all I don't think a tenner is too bad...

Anyway - our rough sort of savings pots are nw as follows:



Holiday - £2-£2.5k (spending money)
Home - £800 (some decking and new shower screen)
Emergency/General - as much else as we can! at least £2.5-£3k
Baby - £1k (is this enough?)

We are managing to save about £1k pm at the moment so are doing not too bad.. obviously some of the pots havea bit more priority than others so will even them out as we go. Once we get them where we want them to be, we can then start considering overpaying!

YoungBaker

So our holiday plans are goinggfood - after lots of humming and hawing we have finally got a bit clearer itinerary what we are wanting to do. Had been comparing hotels and decided some for our stay in Miami - but now discovered airbnb and looking all over again to see if there is anything better!

In mse news had a nsd today! We have got a 5 month saving plan ahead for how we want to start filling up our different savings pots so thats good - feel like we are getting somewhere. Anyone any thoughts on the baby budget??

Only other thing is we are starting to organise our first ever shopping home delivery for this Friday evening! Wine and beer is in the basket already

teabody

Hi,
Just to respond to your baby query....I have 2 children and honestly didn't budget for them as far as savings although I did overpay on the mortgage by £100 per month in advance of my maternity leave just in case (I had a an overpayment reserve which could be reborrowed but I never had to use it).
We bought items as we went along from around the 12 - 14 week mark leaving us with 6 months to gather what was needed and we had plenty bought for us by family and friend's which I am sure you will get with it being your first. Don't be afraid to accept second hand items from people either. I know that you'll want the best for your little one as we did but we wasted so much money on items that we could have borrowed, been gifted or got secondhand, that may have been used a handful of times.

Good luck with everything

Thistlewhistle

Hi there YB,

I've just read your thread from beginning to end and you sound like a very level headed chap!

Re budgeting, this is something that I've struggled with for months, not because it's particularly difficult for me, but some of them require massive time input to keep everything up to date. I've struck upon something which really has started working for me. It's a form of zero based budgeting.

Basically you work out how much money you earn and then allocated every penny to something to bring it back to zero.

Here's a really simple example,

Eg you earn £1000 per month

Mortgage £500
Food £200
Utilities £100

Leaves you with £200 but you have to allocate it somewhere (as the end result needs to be 0 - you're giving every penny a "job" if you like)

So you might decide:

CC debt repayment £100
Emergency fund savings £100

Then you track spendings and try not to go over - if you do, you'll need to borrow from another pot - bad idea!!

It keeps me on track better than anything I've yet found.

I do it slightly differently though in that I work out my earnings for the month before and then budget for the following month because I'm self employed and my earnings are part monthly and part weekly and sometimes erratic

Eg the amount of cash I get in in February becomes my spending pot for March.

There's loads of yootoobe videos which explain it quite well.

It's about finding what works for you and what you can commit to keeping up!

Thistle

SuperSecretSquirrel

Hi YoungBaker

I budget in a similar way to Thistlewhistle. A couple of days after being paid there's not a huge amount left in my current account - I have monthly standing orders and direct debits that spirit money away into savings, stocks and shares, joint account, pay bills, mortgage, etc. All that stuff is on autopilot. What remains in the current account covers other monthly spends like petrol, groceries, takeaways, entertainment, etc. I don't micromanage these spends, life's too short! If there's anything left over in the current account at the end of the month it can be used as a small overpayment, shifted over to savings, or held back as a little extra for next month In reality I do most of my spending on a cashback credit card, and then once a month the balance is paid in full from the current account, I never go overdrawn as all credit card spends are accounted for and considered already gone from the current account as soon as put on the card. I find this approach to be more flexible and easier to manage than micro bugdgets for everything, if I overspend on petrol one month for example we'll have a little less left over for takeaways and entertainment, of course the flipside is my driving has become a little more fuel efficient as econodriving means we have more money left over for fun stuff Money in savings accounts can be raided if there's ever a shortfall, but I never really do this, the only time savings are raided is for mortgage OP's and planned big purchases e.g. holidays etc, stealing from savings for a takeaway or night out is possible but not really an option

As for a baby budget, you can almost spend as much or as little as you like early on. The freebie packs you get (Emmas Diary or Bounty) include mini magazines, and one of those has a checklist of must haves, and it's pretty small. You will absolutley need nappies, a bath and top and tail basin, cotton wool pads and wipes, various creams and lotions and potions, babygrows, vests, hats, mittens, blankets, somewhere for baby to sleep (just a moses basket is fine when very small), feed bottles, steriliser, maybe formula, most likely a car seat, a pram, etc. All that lot doesn't add up to an astronomical amount, you can buy bits along the way as pregnancy progresses, and family and friends will no doubt want to help out with gifts. Later on you might want to have a bit of money set aside to decorate and furnish a nursery, but there is no rush for this as baby will be in with you until a few months old at least. We decided to get the nursery sorted ahead of time as we figured time and money would be more freely available before baby's arrival, but it's by no means a must. Other things to account for are of course a reduction in income during maternity and paternity, and things you might not have considered like a spike in heating and electricity costs etc. As time passes the costs will change, baby will need more food and clothes and toys and books and all kinds of stuff that I've not even considered yet, but by then you'll be incorporating that kind of thing into your regular budget without thinking of it separately as baby stuff

If you are planning on the baby fund covering just the necessities of upfront purchases and the bits and pieces needed in the first few months, I'd say 1k is plenty. You could no doubt get away with less if you were stretched, but there's no harm having a little extra available, it will no doubt come in handy when the reduced income kicks in! Edinburgher (another user with a great diary on here) is currently experimenting with pretending to be on maternity levels of income, with the excess being saved into what will no doubt end uo being a beast of a baby fund. That could be an interesting experiment for you if you and OH were up for it, seems like a fantastic way of boosting savings and getting into the right mindset budgetwise!

YoungBaker

Hi all

Thanks very much for the kind comments - some really great advice! I think some times a little hard on ourselves as we are still really young and earn great salaries for our age so need to try and enjoy them a bit more. But at the same time I think we are getting a bit wiser with saving and now we have a better plan in place its just filling them up by making some small changes?

We kind of use a mix of the methods suggested sbove to manage our money just now - pretty much allocating money to everything but its probably a bit more loose than described above and we just take what we need from where if we need a top up really ha ha.

We are going to order our first online shop tomorrow as well so that will be interesting! We are getting the final plans in place for our big holiday next year.... Its getting more extravagent by the day as we have now added in a 4 night cruise in the bahamas ha ha. A bit hard when we see the orice all add up but we have both worked so hard and it really is our dream holiday before we have kids.

Thanks for the info on the savings pot for a baby a well - I guess we need to think of it more in two halves.... (Yet another pot?!) ha ha... So savings for the actual stuff we will need for a baby arriving like cot etc and then some spare cash for when wife is on maternity. As i have said already we are fortunate enough we can live of my salary alone with a bit of cutting here and there and this is what we did until summer last year so we know it can work - and that wont be takng into account any maternity pay or child benefits etc. but i think we would still be wanting to have a good pot to fall back on. Finally - in regards to decorating for a baby - my wife wanted the spare room painted in lemon (because it was a nice colour i thought) but the more i think of it its pretty much ready for a baby to move in!!! Ha.

Hope you are all well and thanks for reading - the responses are really motivational and keep me going. Going to read some of hour diaries now :-)

YoungBaker

Thank. God. It. Is. Thursday.

Been a very stressful week at work so really looking forward to the weekend now! Pretty quiet one planned mind you but will be good for Money Saving!

So we have put in our first ASDA home delivery... felt a bit counter money saving with a fiver delivery but paying that alone will be worth not trailing round a supermarket all weekend, and will hopefully have stopped us buying a load of crap we dont need as well.

Other than that have been pushing on with our holiday plans and booked some more flights today - just got some hotels to weigh up what we want and where to stay in miami and we are getting there!

YoungBusinessman

Hi young baker! I am similar to you at 22 living with childhood sweetheart and have a mortgage together. I will follow your thread with great interest. We took on a £100k mortgage December 2012, with a lump sum overpayment in dec 2013 before the first year was up(limited to 10% OP a year without penalties) we are now 15 months into a 20 year term and the balance is down to £92k. Bearing in mind our interest rate is 4.32% fixed for 5 years the interest is quite high but was because we only had a 10% deposit. I too play about with that interest saved by overpaying calculator. Gets you really motivated for overpaying!! We would be down to under 90 if it wasn't for new decorating and carpets throughout also a new bathroom away to be fitted. For savings wise i have £12k in an account that needs 30 days notice to access. OH has her own pot which is more than this but we are keeping them at that level now we have got them there and plan too overpay by the full £9,400 we can this year, so £4,700 each! There goes our holiday but with parents who don't own their home, and struggle to get by, I don't want to end up in a position like that as iv seen first hand how stressful it is. Sorry if this isn't well laid out or easy to read, typing on iPhone! Good luck , il pop back regularly!

YoungBaker

Hi all - Hope everyone is well. Been a couple of months since my last check in so thought I'd pop by.

We have both been working away and keeping our head down really - not too much to report on. Have book the rest of our holiday and it's grown an arm and a leg... Heading to NY, down to Miami to travel down the Florida Keys, a 4 night cruise to the Bahamas and then finish off with a few nights in Fort Lauderdale... We decided after having worked hard for the past few years and getting to where we are to really just enjoy ourselves this year and have our holiday of a life time.

Work has been a bit stressful the past few months so we are both reallllly looking forward to this now!

As you can imagine - the mortgage overpayment pot isn't looking too healthy.

We've just got a trial of You Need a Budget though following some really great reviews we have read as we are really wanting to get a grip of our budget going forward. We have spent some cash on sorting out our garden a little as well so we can enjoy it more this Summer again (if the weathers nice at all! ). After our holiday though it's time to really get a grip - and hoping ynab will help us out there.

Just sitting down to have a look at it now so will let you know how I get on... would enjoy hearing any happy/horror stories of it if any of you have used it?


Hey YoungBusinessman - Sorry I have just seen you had posted on my thread! It does sound like we are in very similair situations (name and everything! ) so it will be interesting to read up on your thread as well if you have one... can maybe keep each other motivated a bit!

Hope you are all well and will go catch up on some threads now.

Cheers!

YoungBaker

Hi all

Hope everyone is well, its been a while since I last checked in and things are a little different!

My wife and I have been on our amazing East Coast USA and Bahamas trip which was amazing (albeit denting any overpayment pots!) but it was definitely worth it and glad we have managed to go on our dream holiday... All the more so because we have found out we are expectinf a baby at the end of January!!

This definitely changes things (a lot!) and we are sitting down to really get a more solid grip of our finances now to prepare for the new year. My wife has got a years contract teaching so we will have steady money from her again this year in addition to my wage so we should be in a good position overall, but need to figure out:

1. What we need to save to cover us whilst on maternity
2. What we need for other savings pots (emergencies, holidays, xmas etc)
3. What we actually need to save to buy for the baby
4. What we can pay off towards our debt/mortgage

So a fair bit of figuring out to do!!

We are both over the moon but as it is our first a little overwhelmed - so would appreciate any advice on adjusting from a couple to having your forst baby and managing that financially.

Only other thing to report is we have completely finished doing up our garden which is great in time for baby next year. And we gave up trying to use YNAB.... Just couldnt get to grips with it so have actually
ABandoned spreadsheets and went back to old
Paper amd pen/envelope system

Thanks for reading!!