Please check my budget (£2,823pm) or share yours so I can get some ideas where I'm going wrong.

Retired_Minky

enthusiasticsaver said:

Do you have emergency savings as I don't see a line for that? 

I do have a cash buffer to dip in to in case of emergency. It's actually sat in a pot offset against my mortgage. I could take this out in an emergency but my mortgage payments would go up.

Retired_Minky

RG2015 said:

@Retired_Minky, Thanks for starting this thread. I have always felt that budgeting has been the poor relation on this board.

You say you have asked your energy provider to reduce your monthly charge. Why not also check other providers using the excellent MSE Cheap Energy Club comparison tool. See link below.

Do you have a smart meter with IHD to monitor and check where and when the high usage occurs. I find that the tumble drier is our energy guzzler. We now schedule the washing to dry it outside whenever possible.

https://clubs.moneysavingexpert.com/cheapenergyclub?_ga=2.59130158.2064230468.1594017755-267181628.1587364516

Thanks I'll check this out and also the CAB mentioned earlier in this thread. I'll definitely make the effort to switch.
We did have a heat pump tumble drier but it broke just before lockdown. We've not had anyone round to repair it yet. I'm sure that will have saved us a small fortune on the electric bill.  

Retired_Minky

getmore4less said:

MIssed the bit about the car, where you have crossover spending like electric for the car it makes sense to seperate that into house and car electric as they need a different analysis and can change for different reasons,

Thanks. Not sure I'd be able to easily as the electric bill doesn't differentiate between the two types of usage.

RG2015

Retired_Minky said:

RG2015 said:

@Retired_Minky, Thanks for starting this thread. I have always felt that budgeting has been the poor relation on this board.

You say you have asked your energy provider to reduce your monthly charge. Why not also check other providers using the excellent MSE Cheap Energy Club comparison tool. See link below.

Do you have a smart meter with IHD to monitor and check where and when the high usage occurs. I find that the tumble drier is our energy guzzler. We now schedule the washing to dry it outside whenever possible.

https://clubs.moneysavingexpert.com/cheapenergyclub?_ga=2.59130158.2064230468.1594017755-267181628.1587364516

Thanks I'll check this out and also the CAB mentioned earlier in this thread. I'll definitely make the effort to switch.
We did have a heat pump tumble drier but it broke just before lockdown. We've not had anyone round to repair it yet. I'm sure that will have saved us a small fortune on the electric bill.  

Are you monitoring your energy consumption? I did this weekly even before I had a smart meter and in house display (IHD).

I am at £35 per month for a four bedroom house with two people. Approx £45 winter and £30 summer.

jonnygee2

Thanks. Not sure I'd be able to easily as the electric bill doesn't differentiate between the two types of usage.

You could probably work it out, say by turning everything off, charging the car for an hour, seeing how many KWh were used, and from there recording your charging hours.

Still, electricity is a hard one to reduce. You can take the obvious steps of not leaving stuff on and maybe using stuff a bit less if possible, but really you need more energy efficient appliances. Old appliances do tend to soak up the juice, but it wouldn't be worth replacing stuff just for lower energy consumption. As stuff starts to go, you can pay attention to energy efficiency with any replacements, ultimately I think that's what will bring your bills down.

Eco_Miser

Retired_Minky said:

I've noticed a few posts on MSE where people spend £600 to £800 per month in outgoings.
I'm amazed by this.

So am I. I spend less than £400 a month.
BUT

• No spouse, or other dependents
  
• no mortgage
• no rent
  
• Band A council Tax
• no car - travel for free on bus with pensioner's bus pass
• no investment platform fee - I paid Iweb £25 to open the account years ago, and £5 to buy or sell - but that's infrequent.
• basic cable/landline/broadband deal (mainly for the broadband, but I used to get £8 off for taking TV as well)
• frequent supermarket visits - just when they're reducing the fresh food
• no heating, except when it's too cold even when wearing a thick jumper
  

That's preCovid spending - no traveling now, and food is delivered, full price.
This post is to demonstrate that just looking at the headline figure can be highly misleading, you need to know details for valid comparisons.

getmore4less

Retired_Minky said:

getmore4less said:

MIssed the bit about the car, where you have crossover spending like electric for the car it makes sense to seperate that into house and car electric as they need a different analysis and can change for different reasons,

Thanks. Not sure I'd be able to easily as the electric bill doesn't differentiate between the two types of usage.

That's why you do it yourself because it is just one lump at the moment. 

Your car charger circuits should have a way of measuring what you put in the car or the car measure what it uses. 

When trying to cut spending you have to know where you are spending so you can attack the big savings potential and decide where the efforts may have the best payback. 

It's the detail they gets to the root of the problem and choices.

In many cases the amount is not the issue it is just poor spending choices wasting loads of money that could offer much better value. 

I use this example a lot, we used to spend a lot every year on very nice curry takeaway every week, now we go on an extra holiday using most ofthat money. 

getmore4less

Retired_Minky said:

enthusiasticsaver said:

Do you have emergency savings as I don't see a line for that? 

I do have a cash buffer to dip in to in case of emergency. It's actually sat in a pot offset against my mortgage. I could take this out in an emergency but my mortgage payments would go up.

What rate is that mortgage?
offsets are not the no brainer they used to be, unless it is one of the very low rate lifetime offsets.
It is often better to manage the situation with a regular mortgage and putting the "saving/cashflow buffer" elsewhere.
The calculations are quite easy.
Mortgage size, LTV, interest rate(and time if fixed), full term, regular payment, interest only or repayment.
 

getmore4less

Retired_Minky said:

enthusiasticsaver said:

Everyone's spending habits are different and yes some people live on £600 to £800 but I don't know how either. They probably no longer have a mortgage.  Our income as  a retired (early) couple is £2950 a month.   Our usual budget is as follows:
Essential bills (no mortgage) so just council tax, utilities  £500
Average supermarket spends                                            £300
Entertainment (sky, annual subs for clubs, leisure club)    £100
Eating out, days out etc                                                      £200
Diesel for two cars (less during lockdown)                          £100
Personal spending money (£200 each) covers clothes       £400
hair, hobbies, etc etc 
Savings for gifts, car maintenance, insurances,                    £250
Savings for holidays, new cars, house projects                  £1100   

Considering you have a fairly high mortgage and four adults I don't think your budget is too over the top but probably if you needed to cut it I would look at all the odd bits and pieces like lottery, britbox, books, clothes etc etc and the groceries which could definitely come down from £800.    
We probably could live on £1000 a month but would sacrifice on the holidays, lose one of the cars and do without the leisure club sub and eat out less and cut our personal spends.  We have no need to do this though. 

Thanks for sharing. Is that £1,100 per month saved for holidays, cars, and house projects? Quite impressive.

When is a saving really not a saving.

That depends on your time scales and how well you budget.
Money put aside for a planed spend like a holiday is not savings it is just part of the budget.
I work on a 12 month look ahead anything that is going to get spent from income within that 12 months is not saving.
Money put aside for specific task that take longer to accumulate than those 12months are also not savings they will be, new car money, big holiday money, bigger house money.

Savings is the money left,  not allocated to a task(yet) in the budget and the money set aside to supplement reduced income be planned like retirement or unplanned like a job loss. 
  
Budgeting is all about the forward looking plan. many thisnk they budget but just track.
Look ahead 12 months and think about where you want your income to go, use the current spending as a guide as that is the reality you are trying to change

Work on annual totals for each category as that normalises the spending (eg. Something that is £2 a work day is £520 a year)

if you think about it you have in your initial list you have around £10k on the mortgage and £10k on the groceries that's close to 60% of everything you have coming out of your spends on 2 things.

Do total income for the next 12 months and allocate it out as annual numbers and have the list in priority order
All the things you have to pay come first and the second 1/2 is all the things that are discretionary.

Some items will have both must and discretionary elements, clothes is  one example, you can work out what essentials will need buying in the year in the first part of the list and in the second put a discretionary amount that is competing against all the other discretionary demands for money.

Thing is with changes they need to be realistic if you want to get buy in from everyone and hit a trarget or you can tend to give up if you are always overspending because the amount in the budget is just not realistic, take the groceries.

Groceries

800

400

That is a massive change you have to cut out 1/2 your groceries or get everything 1/2 price or a combination.
Even if you get everything 25% cheaper(£600pm) you would still need to cut back 1/3 of what you buy now. 

You need a plan, look a breakdown of where that £800 goes now and targeting where you can reduce costs  and cutback with everyones agreement, it is going to need a number of coordinated changes and you need to track them,  like try a shop at Aldi and see what that saved, reduce waste what can that save, £5 wine not £10(don't like the £5 wine 1/2 the numbers of bottles) etc.

Another thing you must not do is take off things that have to happen unless you have a plan for not needing that thing.

this caught my eye

Car finance

59

59

New Car deposit saving

28

0

You only pay a bit and borrow the rest, why not put into the plan(budget) enough that you can purchase outright next time or have a smaller debt next time round to get out of the debt cycle.
By reducing the deposit to £0 you are just increasing your potential debt requirement next time round unless you have a plan to not replace or get cheaper cars.
You took £28 out of the plan what is that reduction getting allocated to?
It is ok to go into the "spare" pot at the bottom of the list.

Every penny of income needs allocating to a task, the catch all at the bottom is "spare" as that tells you what there is to juggle in the discretionary spending and longer term plans like retirement funds
It can help to work backwards for retirement eg. if I want to retire at 50 how much do I need to be saving(not spending now).

You may find the SOA format helpful to get the bigger picture used a lot by those that have runout of money but the same principles apply to everyone to get best use of the money.(it also covers a lot of the things that help people help you, like size of household no of cars and assets
https://www.lemonfool.co.uk/financecalculators/soa.php

 

getmore4less

Retired_Minky said:

maxximus75 said:

You also mention your SO in several statements?  It doesn't seem that they are too flexible with change?  Maybe that's something to work on?

Yes. It's a partnership so I have to get them on board. They'll have their red lines that they're not willing to cross. Likewise I'll have mine. We've both made some compromises hence budget v2. I think we work together well. We don't argue over money. Just negotiate and make it clear what can and can't be changed.

Sometimes the way to manage that is to have 3 budgets(maybe 5 with 4 of you).
That also need the income splitting into 3/5.

You have on the shared list everything that is part of the family budget where you make shared priorities on where the money allocated to that pot goes, anything that is over the red line gets taken off the list as that goes in one of the personal budgets.
This list also included the shared longer term goals like bigger house.

Once this joint list is planned if the big No.(income allocated)at the top  is not enough then the negotiation on how to make it bigger starts.
Then all the over red line stuff get lumped together for each person to make thier own priorities with their allocation.

Just a though  what is the interest rate on that car finance and any other debts where you pay interest?
How does that compare to the mortgage rate?