Where are posts about budgeting?

Eco_Miser

carolinerunner wrote: »

I don't want to use a credit card much as it just pecks at my head til I clear it. I may use it for big purchases where I want the extra cover.

I have my credit card set to pay off in full every month by direct debit; I just have to make sure there's enough in the current account to cover it. I don't think of it as borrowing, just delaying payment to a more convenient time.

carolinerunner wrote: »

I'm trying to save towards the costs of the move, selling, buying, moving, new furniture etc. Which isn't very precise. maybe I should save (eg) towards the stamp duty, to take your thought forwards?

Surely you have an estimate of each of these costs to use as a saving target?

carolinerunner wrote: »

I can see that taking money out of savings is ok IF I know that a certain portion of the savings was set aside for that purpose - but not sure how to keep track of what % of the balance of the account (the one I use for that kind of irregular spend) is for what. Eg, if there's £2000 in the account and I've decided that 25% is for holidays, I have £500 available to spend on a holiday?)

Don't use percentages, use pounds. Using your example above: you have £2000, and have allocated 25% of the pot (£500) to holidays. You spend £500 on a holiday, and have £1500 left. You have allocated 25% of the pot (£375) to holidays. You spend £375 on a holiday, and have £1125 left. And so on.
With £s - you have saved £500 for holidays, and £1500 for other things.
You spend £500 on a holiday, and have £1500 left for other things and £0 for holidays. So you start saving for your next holiday.
Use a column of the spreadsheet, or a category in an app (whatever you use) for each of the things you're saving towards, with regular(ish) payments in and irregular (or annual etc.) payments out as you spend your earmarked savings.

Thrugelmir

Eco_Miser wrote: »

I have my credit card set to pay off in full every month by direct debit; I just have to make sure there's enough in the current account to cover it.

By the time you clear the balance you may well have spent some of next months pay. That's where many people slip up. Unexpected financial expense crops up. Unable to clear the balance in full and interest starts getting charged.

Having an emergency savings pot to cope with the unexpected and one off large expense should be the priority objective. Building one requires self discipline when it comes to managing ones own money.

Herbyme

Eco_Miser wrote: »

I have my credit card set to pay off in full every month by direct debit; I just have to make sure there's enough in the current account to cover it. I don't think of it as borrowing, just delaying payment to a more convenient time. Surely you have an estimate of each of these costs to use as a saving target?

As yet I don't have an estimate of each of those costs, they seem super-vague and a long way away atm. How much will a a removals company charge? What new furniture will we need?Maybe I need to estimate them, however vague/inexact, and adjust them as they become closer/clearer?

Don't use percentages, use pounds. Using your example above: you have £2000, and have allocated 25% of the pot (£500) to holidays. You spend £500 on a holiday, and have £1500 left. You have allocated 25% of the pot (£375) to holidays. You spend £375 on a holiday, and have £1125 left. And so on.
With £s - you have saved £500 for holidays, and £1500 for other things.
You spend £500 on a holiday, and have £1500 left for other things and £0 for holidays. So you start saving for your next holiday.
Use a column of the spreadsheet, or a category in an app (whatever you use) for each of the things you're saving towards, with regular(ish) payments in and irregular (or annual etc.) payments out as you spend your earmarked savings.

Thank you, that makes sense about £ not %.

So at the moment, on 1st of each month I reconcile my bank accounts, tot up my monthly spends and income, and make sense of the month. I realise that's not really budgeting (yet), it's more about trying to get a handle on how much my essential/'true' monthly costs are, and limit my non-essential personal spending to an amount I (think I) can afford. I've gone back to July 2019, and by end of December I think I'll have a good fix on what those costs are, so I can plan for 2020, ie actually budget rather than just analyse what I've spent after I've spent it.

So it sounds like I need to track the total balance of my savings accounts on 1st of each month too, then allocate that to envelopes?

I realise this would be easier with some software, I've been having a little look at ClearCheckbook (is that the one mentioned? I don't suppose there's a UK version?) but as always even the intro video looks like it will take me every evening for a month to get my head round it and get it set up.:eek:

Thank you everyone for sharing your knowledge and answering my (doubtless basic!) questions!

MidsHollie

I also wondered why there were no posts about budgeting in the budgeting section of the forum!

I'm new to budgeting. I heard about 'you need a budget' on a podcast and then on here too. As I'm a part time student, I can get a year free access rather than the standard 34 day trial. Its a complicated tool to understand, but has been helpful for me to get a grip (I think - i hope!!) of my finances.

I'm using YNAB* to record and plan all of my spending. All of my direct debits go out of my account (most of them very soon after payday). I also then on payday transfer groceries, fuel and dining out money to pots on Monzo (so that I have super easy access to them when I need it).And then all of my other planned for annual expenses go to an instant access savings account.This includes house insurance, car insurance and maintenance, clothing budget etc - money that I will plan to spend.

I'm super new to this as well.My income is alright, I just fritter away money unnecessarily,and probably have bought a house that is too expensive for me, so really need to get a handle on my finances sooner rather than later

*YNAB is pretty pricey I think if you pay full price, so I will stop using it when I have to pay, and probably use some kind of excel spreadsheet (which will probably be easier to manage anyway!)

System

This forum has been taken over by certain members who act like they own it. I have been told in so many words that it is all about legally appropriating free money and contrary points of view are not tolerated. My understanding of saving money is very different from theirs! I welcome more posts about budgeting and managing finances.

For what it's worth I use a free app called MMEX which is available on Windows, mac OS and Android. It allows me to enter transactions as I make them and also regular payments like direct debits and standing orders which can be auto-entered into the transaction list at the appropriate time. Lots of other features. I highly recommend it.

dreaming

I can appreciate that it is slightly more difficult to budget when income is not regular. Mine is, consisting of 3 pension payments which are all in the week 21st--27th of the month. The amount is the same each month (with small increase each April so far) and I enter it into my spreadsheet (as a credit obviously) then immediately show the debits for my bills, credit card payments and my annual bills monthly amount. Then I know how much I have until next month and plan my spending accordingly. My annual bills (which I put away a monthly amount to cover) is not just bills such as insurance and car tax/MOT, but also includes an amount for gifts (Christmas and birthdays), hobbies, clothing, household/car repairs, possible vets. bills, etc. I don't include holidays as I don't enjoy travelling and I "guesstimate" the amount needed - usually based on last year's expenditure with usually 10% added, but occasionally reduced as well. A 10% increase rarely is required but I am a cautious person. My view is that even if I don't save enough to completely cover a bill (say vets. bills for example) at least I will have a good chunk of cash to put towards it. You could do this for proposed house move expenses - i.e. you don't know how much things will cost but you could work it out based on present day costs and then just slightly increase it each year. If you don't know how much things are just ring up and get rough ideas from companies, or look on the internet as there are various sites that give and idea of how much things cost.
As I said before, these savings "pots" are all virtual and managed on my spreadsheet. In reality most of my cash is in my interest paying current accounts but apart from a regular reconciliation between them and the spreadsheet I never look at my bank balances as "cash available" - I use the amount calculated on my spreadsheets to see what I have to play with each month. It sounds a bit obsessive to some people (so I have been told) but I have been managing my money like this for years and it is second nature to me.

dreaming

scgf wrote: »

This forum has been taken over by certain members who act like they own it. I have been told in so many words that it is all about legally appropriating free money and contrary points of view are not tolerated. My understanding of saving money is very different from theirs! I welcome more posts about budgeting and managing finances.

For what it's worth I use a free app called MMEX which is available on Windows, mac OS and Android. It allows me to enter transactions as I make them and also regular payments like direct debits and standing orders which can be auto-entered into the transaction list at the appropriate time. Lots of other features. I highly recommend it.

Hi scgf. Not sure the site has been "taken over by certain members" but there are certainly regular posters - some of whom I agree with, some not so much. However, despite feeling that I am quite good at managing my money, I often learn a few new things to help me maximise my limited income. And yes, that has included "legally appropriating free money" in the form of switch bonuses etc. - not so different to using a "free" app. surely? Even the posts that are considered to be spurious trolls often throw up some new piece of information from the discussion generated and I can then go off and do my own research based on that. If I don't agree with anyone's post, or they don't agree with mine, then that is fine. People here and in real life are quite entitled to consider me stupid, immoral, obsessive (see my post above), or whatever they like, just as I am equally entitled to totally ignore them. For my part I try not to judge a person based on a few words on an anonymous website as things can easily be taken out of context.

enthusiasticsaver

carolinerunner wrote: »

So at the moment, on 1st of each month I reconcile my bank accounts, tot up my monthly spends and income, and make sense of the month. I realise that's not really budgeting (yet), it's more about trying to get a handle on how much my essential/'true' monthly costs are, and limit my non-essential personal spending to an amount I (think I) can afford. I've gone back to July 2019, and by end of December I think I'll have a good fix on what those costs are, so I can plan for 2020, ie actually budget rather than just analyse what I've spent after I've spent it.

So it sounds like I need to track the total balance of my savings accounts on 1st of each month too, then allocate that to envelopes?

I realise this would be easier with some software, I've been having a little look at ClearCheckbook (is that the one mentioned? I don't suppose there's a UK version?) but as always even the intro video looks like it will take me every evening for a month to get my head round it and get it set up.:eek:

Thank you everyone for sharing your knowledge and answering my (doubtless basic!) questions!

Clear checkbook can be used in the UK. Just change currency symbol to £. I just use the free version and on the dashboard (home page) I have the add transaction gadget to enter new spends, list of accounts, envelopes and budgets and reminders. It initially takes time setting it up but I don't find it as complicated as YNAB which many use. I found it fairly self explanatory so didn't watch the videos but my daughter has been using clear checkbook for a few years and helped me set it up for the first time. The paid version does more but I find the free version is ok for my needs but then I don't have debt (there is a snowball calculator on the paid version) and the only reports I run are the budget categories to see how much was spent in each category. You can also put an app on your phone which I use solely for adding transactions.

Analysis is needed before setting a budget I think so you are doing the right thing. No point in setting an unrealistic budget.

enthusiasticsaver

dreaming wrote: »

I can appreciate that it is slightly more difficult to budget when income is not regular. Mine is, consisting of 3 pension payments which are all in the week 21st--27th of the month. The amount is the same each month (with small increase each April so far) and I enter it into my spreadsheet (as a credit obviously) then immediately show the debits for my bills, credit card payments and my annual bills monthly amount. Then I know how much I have until next month and plan my spending accordingly. My annual bills (which I put away a monthly amount to cover) is not just bills such as insurance and car tax/MOT, but also includes an amount for gifts (Christmas and birthdays), hobbies, clothing, household/car repairs, possible vets. bills, etc. I don't include holidays as I don't enjoy travelling and I "guesstimate" the amount needed - usually based on last year's expenditure with usually 10% added, but occasionally reduced as well. A 10% increase rarely is required but I am a cautious person. My view is that even if I don't save enough to completely cover a bill (say vets. bills for example) at least I will have a good chunk of cash to put towards it. You could do this for proposed house move expenses - i.e. you don't know how much things will cost but you could work it out based on present day costs and then just slightly increase it each year. If you don't know how much things are just ring up and get rough ideas from companies, or look on the internet as there are various sites that give and idea of how much things cost.
As I said before, these savings "pots" are all virtual and managed on my spreadsheet. In reality most of my cash is in my interest paying current accounts but apart from a regular reconciliation between them and the spreadsheet I never look at my bank balances as "cash available" - I use the amount calculated on my spreadsheets to see what I have to play with each month. It sounds a bit obsessive to some people (so I have been told) but I have been managing my money like this for years and it is second nature to me.

You and I use a similar system dreaming. I have a spreadsheet setting my budgets and envelope payments at the beginning of the month but I also use clear checkbook software to record spends and at the end of the month reconcile on my spreadsheet. Our pensions (two at the moment) come in at the end of the month so I reset our budgets back to 0 on 1st of every month. Clear checkbook has a reminder system so all my direct debits are entered automatically on the due date so I don't have to put those in each month which saves a bit of time.

I like you look at my monthly income and decide how to distribute it so I calculate the direct debits/ standing orders for the month (sometimes it is different as a few direct debits are quarterly or annually and no council tax in February and March). The total of that makes up the first monthly budget. Diesel and car parking, bridge tolls etc is the second, food is the third and eating out and entertainment is the final one. Once I have allocated the monthly budgets on the spreadsheet and clear checkbook that is what I work to during the month so I know at any time how much is left to spend in each budget. I usually underspend so there is a surplus at the end of the month. If I underspend frequently I reduce the budget but some like diesel are erratic if we have lots of trips out. We love holidays so do travel a bit. Our personal spends comes under direct debits/standing orders as there is a monthly standing order to each of our personal accounts. The monthly budgets usually take up 50% of our monthly income.

The other 50% is distributed into 4 separate envelopes (I don't lump them together like you but I could do I guess). Car, house, holidays and gifts. Emergency fund and long term savings are also envelopes but I don't interfere with those unless we are topping up savings from our investments in long term savings. The four envelopes used regularly are kept in a high interest current account or one of our two Marcus savings or across them both. The spreadsheet details the envelope totals and the transactions in clear check book are categorised so I know at any time how much I have spent on gifts for example. The envelopes do not reset to nil obviously but rollover each month.

At the end of the month I check how much of the monthly budgets are left and allocate the surplus or deficit to an envelope in clear checkbook. It is almost always a surplus as the big spends come out of the envelopes. It no longer bothers me spending out for a car service or new fridge or whatever as that is why the money has been allocated and it is reassuring to have that saved there ready. As I said previously spending on credit cards is fine. The monthly repayment is included in direct debits but is different each month as I repay it in full. We only use it for the s75 protection or fuel/supermarket for rewards.