unexpected large bills

tea_break

To think we used to pride ourselves in shopping at asda to save money! I like the attitude to haggling but am unfortunately very English about it and hate the reality of it. Should have haggled harder on my last car but couldn't quite bring myself to do it, partly, pathetically, as the dealer was all nice and reasonable.

getmore4less

A budget should have everything on it it is the plan.

Unexpected happens once because you plan for it next time.

OK some will be guesses but having a guess of zero is not helping get the picture right.

The idea is for the plan to balance,
You put everything you can think of on the plan this might include a saving category and you get this to balance with the incoming money.

Your plan needs to allocate more money for the car more money for house maintenance more money for...

This will mean less for going out holidays etc. if the plan does not balance.

A good example is white goods, add up the cost of a new dishwasher, Fridge, washer dryer kettle etc, probably £1500 they will wear out and break so you need something in the budget for that.
If you want to be covered in 5 years that's £25pm that needs to be set aside and not spent on other things.

Same with a car replacement , £5k every 10 years is £40pm
Probably need at least £50pm for car maintenance,
House maintenance say another £50pm

Probably £200+pm is currently missing from your budget you are seeing as unexpected big spends, all predictable

The amounts start at guesses but get more accurate over time.


Debt is just negative savings so reducing debt is a way of saving, that £200pm comes of the debt but you keep track of what you spend on each to make sure that the budget/plan is correct


The real issue is because you don't have these things in your plan you are spending the money you need for them on other things.

tea_break

Thanks, I'll have a proper look at budgeting. Allocation of certain amounts for different contingencies is the way forward then. Still the case though that when you're starting this from scratch, until you build up some reserves in each category, you're still vulnerable to big bills wiping out your good work.

HappyMJ

tea_break wrote: »

Thanks, I'll have a proper look at budgeting. Allocation of certain amounts for different contingencies is the way forward then. Still the case though that when you're starting this from scratch, until you build up some reserves in each category, you're still vulnerable to big bills wiping out your good work.

Borrowing from one category to pay a big bill in another category is fine. Many people call this an emergency fund...as long as you actually have something in your emergency fund then it's OK to use it for any category.

FireWyrm

tea_break wrote: »

Thanks, I'll have a proper look at budgeting. Allocation of certain amounts for different contingencies is the way forward then. Still the case though that when you're starting this from scratch, until you build up some reserves in each category, you're still vulnerable to big bills wiping out your good work.

This is of course true, but if your budget is sound AND you stick to it, you should find yourself with more contingency then you thought possible in a very short time. For instance, I started with an overdraft of £3K no savings and liabilities galore. I have turned this around and despite school uniforms, new shoes, holiday clothes and some replacement white goods, we are still in good positive health and looking forward to a bountiful christmas and profitable new year. I didnt really start with YNAB until early this year although I had dabbled with Excel spreadsheets for a while. In just 9 months, I have gone from dreading how deep we were in the overdraft and wondering how we were going to manage for the month, to knowing exactly where every single penny was spent and being able to forecast the months groceries to within £5.

You cant even begin to make a plan until you know what your actual resources and liabilities are. That is your first job. The rest follows from there.

sourcrates

FireWyrm wrote: »

I know that our family uses 45 rolls of toilet paper per month, therefore, a large packet of around 90 will last approximately two months.

What do you feed them all on rhubarb ??? :rotfl::rotfl: :rotfl:

MadelinesMum

Hi op, I've had similar here, car MOT for £450 then a couple of months later went wrong with another £600 bill. I find however much I save and budget, a bill comes along and wipes everything out. The last 2 months I have managed to save about £650 but I know that is accounted for as my house is for sale and it will be for survey fees. If I get any more unexpected / high bills then I will be back to zero again - and I can't borrow money and have no overdraft as I'm on a DMP.

HappyMJ

sourcrates wrote: »

What do you feed them all on rhubarb ??? :rotfl::rotfl: :rotfl:

Could be cheap so called value rolls. They never seem to last long. A good quality large roll will last me (one person-male) almost one month. The paper is good enough to only require 2 sheets per wipe with one visit per day.

I do not use the toilet paper to wipe my nose -I use a tissue from a box- or to clean up spills-I use the bathroom cloth- or to clean the mirror-the washable lint free cloth can be used for that.

FireWyrm

sourcrates wrote: »

What do you feed them all on rhubarb ??? :rotfl::rotfl: :rotfl:

I have long suspected that they eat toilet paper, but no matter how many times I scream..."for gods sake, I only put a new roll on yesterday", it doesnt seem to make any difference. Toilet rolls disappear and I am at a loss to explain it...so I just deal with it instead.

getmore4less

tea_break wrote: »

Thanks, I'll have a proper look at budgeting. Allocation of certain amounts for different contingencies is the way forward then. Still the case though that when you're starting this from scratch, until you build up some reserves in each category, you're still vulnerable to big bills wiping out your good work.

This may seem the case but the impact is much reduced because you planned for it.

Also because there are a lot of things that might happen the pot for these things grows quite quickly and over time things going wrong spread out.

If you think something will cost on average £600 a year then you need to allocate £50 per month and if it happens in 6 months time then you will only be £300 short rather than £600 and by the following year you will have the money.

Best to try an err on the high side to start with, remebber if you don't spend it because it turn out it was cheaper or did not break down you can realocate or reduce debt, if you are on the low side something else has to give up the cash to pay for it or you get more debt.

The trick is to get something in the plan rather than nothing, if you run a house and a car you need to allocate a fare chunk on top of the fixed items insurance, tax,MOT, service, depending on mileage there will be other costs, cam belt, tyres, brakes.......that come round less often but can be planned for.

Once you have a year mapped out in detail do a 5 year plan based on the things that might come up less often than a year

You will be suprised how much money you need to keep back to get out of the cycle of things being unexpected.