Budget help

woodywoods

Hi
I am new to the forum and was hoping for some advice on budgeting & saving.

My disposible income after all bills are paid is around £500 per month. I allocate £200 for spending and £300 for saving. The trouble is there is never anything left at the end of the month. Clearly I am overspending but also believe some of it may be psycological.
I was wondeing if a good saver has a different mind set, would you make your spending more realistic at say £300 or £400 and save little regularly?
I would really appreciate your help as this is quite soul destroying especially when I dont really go mad on things like takeways and treats.

Robin9

I would record every £ you spend for a month and see where your money is going? Every coffee, every supermarket spend .......

enthusiasticsaver

You need to break your money down further into saving pots (virtual or actual). Clear checkbook which is free can help with their envelope system.

Work out over the last few months where your money is going and set up monthly budgets to keep you on track. I would say for a single person £200 is enough to cover food and entertainment but presumably you have other expenses like travel to and from work, gifts for birthdays, annual costs for insurances, etc etc.

A spending diary may also help.

enthusiasticsaver

A tactic I have always used is to transfer money into savings at the beginning of the month not the end. Divide the £200 into weekly cash and draw out cash to cover weekly costs.

RG2015

Hi woodywoods,

Have a read of the posts on the thread on the link I have inserted below. I think some people will have a propensity to either spend or save. It could be described as a mindset but I believe that there is more to it than that.

As with anything in life, a primary factor is incentive. And in turn incentive is driven by the strength of your desire to achieve your goal.

Two things that helped me were writing down all of my spending and asking if that was really necessary and using a savings goal tool. My wife was so annoyed at having to write down all of her spending that she stopped spending as much.:).

The savings tool was in NatWest and it became a game to see how much I could save every month. At the time NatWest had good savings rates but sadly now they don't so I have no savings in NatWest hence I do not use their savings goal tool. I do not know why it worked as it is totally illogical to me. But it did. Perhaps there are others out there.

https://forums.moneysavingexpert.com/discussion/5809549

N1ckS

It's all relative but personally I feel £200 a month disposable income is quite restrictive and if it's weighing on your mind and stopping you from living your life I would certainly consider doubling it or even just putting a nominal amount aside for saving.

I'm not suggesting splurging on things you don't need but equally don't restrict yourself by limiting your freedom to do things that you enjoy or opportunities to change your circumstances. For example, can you invest in yourself to improve your disposable income in the future?

getmore4less

Budget is a plan, no plan you are not budgeting

work out(in advance) how you want to allocate your money and then track you are actually only spending what you planned.

Helps to look ahead at least a 12 months to cover the less frequent stuff and longer term is even better

tot up all the expected income for the financial year 2018/19 and make a plan for the year on where it will go.

Then keep a spending diary.

detail is up to you but £200pm spending and £300 saving won't be detailed enough.

Most people go wrong because they left something off the list or thought £x was enough for something when they really spend a lot more on that item.

Look at the SOA for ideas on categories,
http://www.stoozing.com/calculator/soa.php


If you want a reasonable idea what the allocations might be, work out where all you money went for the 2017/18 year

BooJewels

The suggestions I would have made have already posted, but I would reinforce the idea that writing things down is imperative to keeping a tight reign on spending and budgeting. I've found over the years that when I am less disciplined it simply never goes as well and is very easy to lose your grip on it. We live hand to mouth and being on top of it is vital.

It doesn't really matter whether you use an app on your phone, a pencil and notebook, or like me, a spreadsheet, but budget for the month (or longer as suggested) and record spending against it. It might sound like a arduous task, but once you get a system set up, keeping on top of it soon becomes a habit that only takes a few minutes a week.

My own personal system, set up long before mobile devices and apps, is to use a spreadsheet, I have 3 columns; the first one is a description of the item, the second one is a protected figure and the third figure is the actual spend. Many items on the list are regulars paid by DD, which get added into the third column as they're paid. Using various sub totals and formula in the two number columns, this means that I always have a projection for the month, balance available and an actual number that balances with my on line banking total.

Whatever system works for you, as long as you're disciplined into recording details, will make it much easier to track spending and stick to a budget. Those pesky little food shops on the way home from work and cash withdrawals for a pint soon add up and eat up your budget.

Zola.

I use my debit card for every spend I make, then I track it all in google sheets. With enough historical data you will soon know where the money is going, realise what can be chopped out etc.

For example buying coffee daily, soon adds up (£1000) a year.

DCFC79

Write your spending down, when you do your shopping, take cash and have a plan for what to buy eg based on a meal plan.

If you go at the right time of day you can get yellow stickered products and some you could freeze.

But you need the determination to do something about it, need to restrict yourself from buying stuff you dont need/can do without.