Right, I'm doing this...but where to start?

MrsKT

Evening everyone!
So I have decided that I really need to focus on this and make a proper plan, but I don't really know where to start! I've always been pretty good at saving and then decided that paying the mortgage off early was what I really wanted to focus on. I have made the odd overpayment here and there over the last year but have no real system. I've never worked to a strict budget as such and as I get paid I transfer money to various different 'pots' on my online banking but I don't have a proper system, I just do it as I fancy or as whatever is being planned in life at that time dictates (holiday pots, maternity pay pots etc).
Is anyone able to offer some advice on the best way to get started so that I can make some real dents in the mortgage and be able to see the difference it is making please? Is there a good spreadsheet or app I should set up for example?
Thanks so much xx

Scrimps

I'm sure there is a budgeting spreadsheet on this site somewhere which could help you.

I use the YNAB app and pay about £4 a month for it but it is excellent and I think worth every penny.

Do your budget so that every £ of income is allocated to a category and you're left with nothing over. Even if that includes a 'frivalous spending' category. obviously start with the most important like food and mortgage and bills and then allocate yourself money for all the other categories that you need such as haircuts and entertainment etc, not forgetting saving for maintaining and replacing things.

You will then be left with what you could overpay each month. Put your figures in the overpayment calc on this site to see if you're happy with the new mortgage end date, if it's not soon enough, perhaps go back and shave some £ off a few categories.

Then set up a standing order so that overpayment is taken each month.

That's how I would do it,but I'm sure there are lots of ways.

wishingthemortgaheaway

I too use YNAB. I love the 'give every penny a job' approach.

Some of the strategies I use:

Saving for annual Bills, I save for annual bills in separate ynab 'lines' for example car/house insurance, water, council tax, landline phone rental. I over estimate what the annual payment will be so when I pay it out I've got a 'bonus' which can go into savings or the mortgage overpayment pot.
For example, council tax was £1100 is this year, I'd saved £115 a month for 12 months which made my ynab pot total £1380, £1100 went to the council £280 got moved to one of my savings goals and I've started again saving for next year.

Rounding up monthly bills:
Mortgage payment is 297.89 a month, I budget £300 a month into that YNAb line and the 'surplus' £2.11 gets swept into a savings goal.

Tilly tidies: (there appears to be a number of ways of doing this, I'll share my way, I believe they are named after a long standing forumite from these boards) at the end of the day, when I've added all my daily transactions into ynab I transfer the straggly pennies to a savings goal, for example if, this morning, my grocery ynab pot was £147.00, and I spent £37.42 on groceries today my grocery ynab pot would now be at £100.58. The 58p would be tilly tidied into the mop pot

Cashback & rewards: any cashback or rewards I get get swept into a savings goal, today I've bought some supermarket things that I can claim cashback on through an app, when this rices in my account, I'll input it (in ynab) as income forex to a savings goal.

Cash in my purse at the startof a month. Any cash that's in my purse on the morning of the 1st of the month I add up. I consider what it's most likely to be spent on and then sweep the same amount from the ynab category into a savings goal.

Set myself little challenges to keep me motivated.

Urm, think that's it, if I think of anything else, I'll mention it.

Good luck with your journey.
Wish

first78

Can I ask what YNAB is please?

bexster1975

Hello

It's an app called you need a budget. It's apparently very good.

In terms of saving to OP, my best tip is to pay yourself first. If you just save what's left at the end of the month that is likely to be not much. Decide what you can afford to save, put it away then live on the rest. A statement of affairs ( whether just for you or to post here) is a great place to start.

Bexster

Kittenkirst

Hi there

Your best starting point may be to do a statement of account (SOA). I used the 'SOA maker' on the debt snowball site.
You enter all your outgoings and incomings and it shows you what you should have left each month. I then copied this into my diary for advice on where I could trim any excess etc

Instead of YNAB I use an accounts app on my iPhone called 'Accounts Tracker v5 5.5) which I think was 79p many years ago.

You set up all your accounts into it, then put all recurring payments/bills etc and then I add in a recurring amount for food, for petrol etc.

Every time I spend or shuffle cash I put the transaction in so I have an up to date view if all my accounts etc.

It took a while to set up but I love it and have used it for years. You can group your accts so I have a set called 'instant savings' another for the house, 'no access savings', pension etc and I can track it all that way.

I also have a spreadsheet I set up, as I love numbers and graphs so that could be an option if you can use excel etc.

My advice would be to have a play around with Spreadsheets and apps until you find the one you like

jezebel

As others have said, start a budget, allow a bit of padding for the off splurge (for me that's clothes!), and don't forget to leave a bit for emergencies - my ceiling collapsed three years in and whilst insurance covered it there were a few costs i hadn't considered, also needed a new boiler a couple of years ago.

bexster1975

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

SOA Linky

Best of luck. If you post it on here people will offer advice on where you might save. Otherwise, it will give you an idea what you earn and spend, then what you can realistically save.

I'd echo an emergency budget before you start. It is often suggested 3-6 months of outgoings but that can be quite a stretch at first. Also, depending on circumstances you may be comfortable with more or less than this yo cover emergencies.

Bexster

MrsKT

Thanks so much to everyone for your replies. Have downloaded the app and will do the SOA using that link. Will see what that comes back like and then make a plan going forward.

Feeing pretty thrifty tonight as just used the chicken carcass from dinner to make soup for lunch tomorrow!:rotfl: Carry on like this and the mortgage will be paying itself off! xx