YNAB - 1 year of budgeting, I can see why I'm in debt now

datlex

Cutting back is good but be careful about cutting back too far. It needs to be sustainable in the long term. Your taxi use seems low in the first place given your entertainment budget. How do you get to the pub for example? Is it viable to get home via public transport after an evening out (i.e. does not involve a walk- personally safety is important) or does someone chose to drive?

What may still trip you up is things like spending unbudgeted money on clothes or a new phone or other items.

Are you going to put aside extra money for your debts or pay the additional amount on pay day so that you then don't have it available.

Fireflyaway

Budgeting is like dieting, you think that little chocolate doesn't count! Its only a £5 purchase, its only £10 out the cash machine etc! I've realised I'm wasting at least £60 a month on meal deals. Oh its only £3 a day ... Yeah but thats £60 a month on a soggy sandwich I didn't even enjoy. Plus I've put on weight as I grab chocolate too!
Keeping a record is a great idea. Most of us don't actually know how much we truly spend.

Cakeguts

The problem I think is all those little it is only so much a month things. They usually end in .99. So £9.99 per month for example which is actually nearer to £10 than it is to £9. You only need a few of these and you are spending a lot more than you think.

Sharon87

datlex wrote: »

Cutting back is good but be careful about cutting back too far. It needs to be sustainable in the long term. Your taxi use seems low in the first place given your entertainment budget. How do you get to the pub for example? Is it viable to get home via public transport after an evening out (i.e. does not involve a walk- personally safety is important) or does someone chose to drive?

What may still trip you up is things like spending unbudgeted money on clothes or a new phone or other items.

Are you going to put aside extra money for your debts or pay the additional amount on pay day so that you then don't have it available.

I live in London, so have access to great public transport any time of the day, which is why taxis are not really needed, unless I'm being lazy! I always get the tube/bus home after a night out (only ever got a taxi a couple times when it was shared with others). No matter how drunk I am I always get home!

I have a budget for 'large purchases', I need to put more than the £20-£30 a month in, but at the moment that's what I can afford. I tend not to want the latest phone. The last phone I bought was an iPhone SE, I put it on a 0% deal and worked out how much a month I need to pay towards it to pay it off before the 0% ends. I have about £100ish still to pay towards it. I plan to keep this phone another few years with just a battery replacement when needed. I may need a new laptop in a couple years, so will try to put money towards saving for that.

I work out my budget at the beginning of the month and put any extra towards debt or just up my direct debit if I want to make it a regular thing. Same with savings, if I'm saving for the HTB ISA or holiday I put that amount into savings as soon as I'm paid.

Sharon87

Another year, another report.

I've had a good year in relation to my money and debt. I've got a pay rise and my new work contract now finishes in September! (my longest ever job in this industry!).

My debt has gone down for the first time in years by over 2k.

Here's my indulgent spends compared to last year:

Restaurants/Takeaways (inc expensive lunches)
2018:
Yearly: £999.95
Monthly: £83.33
(my new monthly budget is reduced to £30)
2019
Yearly: £1254.43
Monthly: £104.53
Increase on last year, but I have added the sandwiches from 'Pret' for work lunches and any other work lunches that aren't cheap stuff from tesco! This is my biggest thing I need to work on!

Entertainment (pubs, DVDs, cinema, theatre, apps, special birthday meals/drinking)
2018
Yearly: £1409.88
Monthly: £117.49
(my new monthly budget for this is £50)
2019
Yearly: 1201.68
Monthly: 100.14
Lower spend than last year, probably a realistic budget is £100/month. I think me trying £50 a month was never going to work!

Holidays (and holiday savings)
2018
Yearly: £1771.94
Monthly: £147.66
(I'm thinking of setting a new monthly budget of around £40)
2019
Yearly: £2160.27
Monthly: £180.02
An increase, but I did have a really expensive holiday at the beginning of the year - which I did save up for, but then spent a little bit more on. £500 of this was paid for from winning a NASCAR fantasy thing (I didn't wage any money, Premier Sports sponsored the prize). This is a category I will probably continue to spend £100 or more in a month.

Taxis:
2018
Yearly: £206.56
Monthly: £17.21
(monthly budget of £0 - will only get one for holidays if necessary and will come under holiday budget)
2019
Yearly: £118.63
Monthly: £9.88
A reduction of taxi use - always a good thing. I've been less lazy this year!

I've paid off £2022 of debt this year - another 13k to go!

I hope this year I stick to paying more off. My aim is to pay off 4k this year, 4-5k next year then the rest the year after that. Hopefully with my pay rise and strict budgeting - especially when it comes to eating out it can be achieved. In 2022 I want to go travelling around Europe for a few months, so really want all my debt gone and got some savings for this!

Chandelier.

Your plan sounds good and you're right to be realistic about your budgets. I overestimate my entertainment budget and what's left over at the end of the month gets transferred into savings. Every little helps.

And well done on the job!

getmore4less

To work properly budget(which is the plan) need to be at least a year ahead.
Month to month tweaks for cashflow and reminders of where each category is can hep keep on track.

Another thing that caught my eye was not having the CC debt in the plan, they should be there or you won't have the cash flow(min payments) and the net worth getting tracked.
I guess you could track net worth away from the plan and just have the min payment entries in the plan.
If you can make a plan that has the min payments on 0% cards included that is debt reduction.

Once you have an annual plan in place you can prioritize better.

A fully populated SOA using annual numbers and your target debt reduction should be easy to put together balance and track.

Given the last 2 years spendings I think you are still too aggressive on your target spend for this year, you are setting yourself up to fail.

Have a really good think about your priorities and what you could use the money for

You might want to analyse your total food spends that has room to adjust.
I break down into 4 categories
Home.
Take out
Eat out.(just because, that will include the lunches, and any eat out because can't be bothered to eat at home )
Eat out (special, proper planned eats, some are in your ent. category )

With all these take outs and other food the home spends should be low.
what I like to do is look at the options for the money(you can only spend it once).

I use this example a lot,
We used to have a regular weekly takeout(£20+-, great Indian near work), decided to cut back and spend the money on another holiday.

Takeout stopped being a habit, got enjoyed a lot more when we had them (ever 4-6 weeks) and we took that extra holiday.

I think you may benefit from looking at the takeways and "just because" eat outs, that money could buy you some really nice stuff to eat at home and home make lunches, leaving some for the special eat outs in the ent. cat.

What we have at home is a number of easy to make options to substitute that too easy option of get a takeaway.
Most of them take less time to prepare than a takeaway order.
pimped up frozen Piza ready in 15 mins
Noodle soups 10-15 mins
Stir frys(meat prepared in advance marinaded and frozen in portions) <30mins
Slow cooker, so ready when we get home

Even a full from scratch oven dinner can be done with 10-15mins prep and 40mins in the oven while you do something else.

Mnd

The one thing that sticks out a bit for me is your target budget of £40 for holidays Inc spending.
You appear to be like us and enjoy your holidays but are you sure that less than £500 a year will give you the breaks you want.
Apart from that you seem to have a good grasp on your budgetting.congratulations and good luck

Sharon87

£40 a month was my last year's unrealistic budget. As has been evidenced by 2019! £100/month seems to be a realistic budget for holidays.

I do have a plan with all my money. This is just those spends I could cut back on. I have the best gas/electric/utlities/phone bills.

I put a minimum of £300 a month towards my cards. Some of them on minimum payments, others just above. (all on 0% deals) I would like to put another £100/month towards the credit cards to clear it faster.

I've started budgeting yearly for the annual or long term spends like insurance, tv licence, glasses and now I'm putting money aside for a new laptop when mine breaks, it's getting a little old now!

My food bill is high and I do like eating out. I have cut back a lot on actual takeaways at home, it's just those trips to Nandos/Five Guys.etc I need to cut back on now and being more disciplined with lunches at work.

sazaccount

I would suggest popping over to the old style board for meal ideas, fakaways etc you could try challenging yourself to say only having 1/2 bought work lunch a week, then "saving" what you would of spent towards your laptop? I used to definitely prefer my homemade lunches to something out of a tin or packet. I used to do my lunch prep the night before as I'm really not a morning person!!