Setting a budget

iammumtoone

Feel a bit of a fraud for posting on here as I am not in debt but this seems like the best board for this question.

I need to set myself a budget so I have spare money at the end of the month.

Can anyone recommend where to start with setting a monthly budget. I don't want to look at what I spend on things now (as I have no idea ) I'd rather set myself a budget that I can make myself stick to.

I think when people go bankrupt they have a budget they can spend up to does anyone know what this is. My thinking is this budget will be tight buts its a staring place and I can add a percentage onto those figures to make it a bit more comfortable, would that work?

Or would it better to start backwards with the amount I want to save taken off my wages and try to make everything fit into the remainder.

How does everyone else set their budgets?

anniecave

I would always start with what I am currently spending my money on. Or the best esimate. Some of those figures will probably be quite easy to figure out (for example council tax, gas, electricity, internet costs, rent or mortgage), others will be harder to figure out. Anything you spend money on is potentially something you can reduce.

iammumtoone

anniecave wrote: »

council tax, gas, electricity, internet costs, rent or mortgage

yes those are easy, its the others I will struggle with as I honestly have no idea (that is got to change).

I really need someone/thing to tell me I should be spending/need X amount on food per person X amount on clothes per person etc.

I might have a nosy round the board at others SOAs that might give me an idea/starting pint.

anniecave

Yes, have a look at what others are spending. Or what you personally think you need to spend. Amounts spent on groceries for example varies massively. It varies if you are buying for one person, a couple, children as well etc. However tastes and habits also affect it. Cooking from scratch is cheaper than buying ready meals. Eating expensive meats versus just having spaghetti bolognese etc.


Hope you have fun figuring out where to save money....

MrsSave

I still it just for you, or 2 adults, children?

What you could do is fill in an soa to show what you currently spend. Do you currently save anything? It is really difficult for someone to tell you "spend £25 per person on clothes each month". A lot of it depends on what you earn, your current spending patterns, where you shop food-wise, do you buy nappies/formula/school uniform, do you holiday, if so is it a few days in the UK/a fortnight abroad, etc.

Fill in that soa and post it here. People will then be able to advise where you can cut back if you wanted to save more. Here's the link, and make sure you format for mse at the bottom:

http://www.stoozing.com/calculator/soa.php

tori.k

iammumtoone wrote: »

yes those are easy, its the others I will struggle with as I honestly have no idea (that is got to change).

I really need someone/thing to tell me I should be spending/need X amount on food per person X amount on clothes per person etc.

Sadly nobody can do that , down to everyone's circumstances being different.
The easiest way is keep a spending diary or app and all your receipts and bank statements for the next year, each week/ month tally up your controllable spending ( grocery, clothing, and so on and try and reduced the spending by a small amount the following week/month)
Over time your find your bottom line. It took me 6 months to find our budget for months I was running out of money in certain categories but with a bit of tweaking eventually got there. It's time consuming at first but well worth it now I know how much I have to put aside and how much I can save, it pretty much runs itself from that point.

Mumoffourkids

I found a guide which gave the amounts creditors would expect to roughly see when you apply to them to reduce payments. It gives you an idea on how much you could spend on food, clothes etc depending on how many people in your household. It was on beat my debt website and was called an expenditure guide. I downloaded it but now can't find the website I got it from. But maybe that would give you a starting point. You obviously don't have to have all the categories or could go for lower amounts than they suggest, but it could be a start.

Fireflyaway

Firstly you need to know what you are spending on bills etc to be able to know what's left. Most things will be fixed, only food or petrol you will have to decide how much to spend on them.
I do it by writing down bills, decide on an amount to save each month (treat that like a bill too) then the rest is for spending on whatever. I personally split the spending money into 4 plastic wallets so I don't blow it all!
I don't think there is a right or wrong amount. Depends on your income, your cost of living and how much you want to save. Right now I plan to save more than I spend as I want to buy a house. One day that will change.
So long as you pay the bills and have an emergency fund what you do with your money is up to you. Some might think you have loads left and some will have much more than you. That's why you need to decide.

V2-Schneider

tori.k wrote: »

Over time your find your bottom line. It took me 6 months to find our budget for months I was running out of money in certain categories but with a bit of tweaking eventually got there. It's time consuming at first but well worth it now I know how much I have to put aside and how much I can save, it pretty much runs itself from that point.

Funnily enough, I was reflecting on this very same thing this morning. Once your budget is crystallised and you have an appropriate amount going into savings, it's surprisingly very difficult to break that budget. It feels like you're transgressing some kind of self-imposed moral code. You feel bad! The other day, I spent an extra £32 on a shirt I saw in the sales and it felt seriously naughty. Even though I could afford it, the shirt wasn't within 'budget' - I was taking out of the slack money I put aside every month in case of small emergencies.

But, I've finished the month with plenty of money left over to go straight into savings anyway, and that's actually an amazing feeling. I know that because of prudent budgeting and self-discipline, I can get away with the minor misdemeanour every now and then. I knew how much I was predicted to end the month with, so I could make an educated gamble and say: "Shall I really put £32 into savings, or shall i give myself one little treat for Christmas?" If I didn't have that budget in place, as I never used to in the past, those small 'gifts' to yourself come fast and furious, and you soon spiral downwards each month.

In setting a budget, I'd follow the advice of everyone else here: know what your exact expenditure is each month. It sounds tiresome because it takes effort - who wants to put in some graft? But the reality is you know, as a result, exactly where your money is going. I use a Windows App called MoneyPoint which is pretty poor compared to a lot of other platforms out there. But it does the job. I've managed to save more in the past four months than I ever have done in my life. You end up becoming pretty evangelical about it.

iammumtoone

Fireflyaway wrote: »

Most things will be fixed, only food or petrol you will have to decide how much to spend on them.

Not just those I need to decide how much to spend on clothes/emergency fund/ haircuts etc unless I have one bit pot labeled as other.

Good point about petrol I have to over hit that in budget as need the car to get to work.

louby40

Lots of people use YNAB which is a budgeting tool but it costs about £4 a month/£50 ? a year to subscribe.

You then assign your money to different pots. I’ve used it for about 18 months and it’s helped me no end.