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Six month target

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kimwp
kimwp Posts: 2,010 Forumite
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edited 15 October 2020 at 10:22PM in Mortgage-free wannabe
I realised that with being careful to stay within budget, I might be able to achieve a significant mortgage milestone by the end of the year and thought I would give a MFW diary a go. I've deducted all mortgage and bill payments from my income and used the MSE budget planner to consider and put aside money for all the possible one-offs that I need to consider (albeit some of them are unknown amounts!) which leaves 480.00 per month to cover for (one person) petrol, food, cleaning/bathroom stuff, food out, clothes, haircuts, prescriptions, pet expenses (2 cats food, vet bills, worm/flea treatments), house maintenance and I-don't-really-need-but-I-want-that spend,  I'm under no illusion that this is a tight budget, but it is tight enough that I need to keep an eye on it.

Edit mid-Oct: I realised I was on track to achieve my target a month early, so given the heavy impact on the environment that storage of electronic data has, I have decided to delete most of this thread and replace with a post on the useful things I learnt about budgeting, plus leave an example of the accounts format I used, in case it is useful to others (or future me!)

Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.php

For free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.

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  • LadyGnome
    LadyGnome Posts: 801 Forumite
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    Good luck with your goals. 
    MortgageStart Nov 2012 £310,000
    Oct 2022 £143,277.74
    Reduction £166,722.26
    OriginalEnd Sept 2034 / Current official end Apr 2032 (but I have a cunning plan...)
    2022 MFW #78 £10200/£12000
    MFiT-6 #28 £21,772 /£75000
  • financialfreedomxo
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    Hi, 

    Just checking in to say Good luck with your goals! I'm sure you'll get there in no time. 
    Mortgage Repayment Tracker: 21/03/2021: £85,995.00

    10% MOP 2021: £1098.57/£8599.50

    1% MF Challenge 2021: £65.01/£849.50

     My MFW thread: https://forums.moneysavingexpert.com/discussion/6167354/financial-freedom-through-mortgage-freedom#latest

    He who dares wins! ~ Winston Churchill 


     

  • jenni_fer
    jenni_fer Posts: 529 Forumite
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    Good luck! Short term goals are a great way to focus the mind!
  • newlife2016
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    Ahhh sounds like the universe righted you’re budget just in time to finish the month off well! Good luck on your journey! X
  • QueenJess
    QueenJess Posts: 3,811 Forumite
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    kimwp said:
    August Review:
    Well....the food budget went out the window and the unplanned spend was pretty big. While I'm still under my overall budget, I'm not sure if this is a successful month as part of the point is to practice budgeting in case I need to at some point. (I've been lucky so far that my income covers my (admittedly second hand furniture and wearing clothes until they have holes) lifestyle quite comfortably. Pondering if I simply need to increase my food budget to £200 or possibly account for the number of saturdays/shops that will be within that month's budget. 
    Also pondering how to manage the "unplanned" spend. I've stuck everything that's not a planned spend under there, but there are maybe two categories - needed unplanned spend (replacing ripped leggings) and frivolous unplanned spend ) takeaways. Also I could alot some budget for these spends and just guesstimate amounts. Advice welcome if anyone reads?

    Well, it looks like some of the food unplanned spend was on a whim.  I often think if you make your budget too tight (unless you actually need to), it gets so hard to stick to.  If you want to feel like you can treat yourself, allocate a small monthly amount to it so you can order the odd takeaway or the odd thing that you need without going over budget.  That way, when you get sick of always being "good" you can treat yourself.
    2024 decluttering: 13,793⭐️🥉⭐️🏅🏅🥈⭐️🏅🥇🏅⭐️🏅🏅⭐️⭐️🏅👑💎⭐️
    July Total In: 17, Total Out: 608
    2024 decluttering goals: 🥉3,000 🥈4,000 🥇5,000 💎12,000 🏆 20,000
  • kimwp
    kimwp Posts: 2,010 Forumite
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    QueenJess said:
    kimwp said:
    Well, it looks like some of the food unplanned spend was on a whim.  I often think if you make your budget too tight (unless you actually need to), it gets so hard to stick to.  If you want to feel like you can treat yourself, allocate a small monthly amount to it so you can order the odd takeaway or the odd thing that you need without going over budget.  That way, when you get sick of always being "good" you can treat yourself.
    Thanks @QueenJess, I think this is a good idea - I might add a treat food budget. But you're totally right, as soon as I feel restricted, I want to push back. I think it might be a matter (while I don't have to restrict myself) of simply allocating a large amount to the food budget so that I know that I have less to spend on other things.

    Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.php

    For free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.
  • kimwp
    kimwp Posts: 2,010 Forumite
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    edited 15 October 2020 at 10:23PM
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    Example accounts

    October Diary: Plan
    Budget: £480  
    Spend budget:
    Food: £200
    Petrol: £40 complete guess - no plans to travel, but car is nearly empty
    Worming treatment: £8 for other cat - didn't get round to this last month.
    Total planned: £248

    Other spends this month: None that I can think of, given that local lockdowns have scuppered plans!

    October Diary: Spend
    Updated 3rd Oct
    Actual/Planned spend:
    Food: £145/ £200
    Petrol: £24 / £40
    Worming treatment: £0 / £8
    Unplanned Spend:
    Takeaway: £6
    Cat food: £42
    Total: £48

    Remaining in purse: £480 - £145- £24- £48 = £263
    Projected remaining in budget: £480 - £200 - £40 -£8 - £48 = £184

    Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.php

    For free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.
  • kimwp
    kimwp Posts: 2,010 Forumite
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    edited 15 October 2020 at 10:17PM
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    I did a tot up last night and due to holiday refunds, bank switching incentives and just having pretty boring life due to shut down (rather a boring than an deprived or frightening one!), as long as I have no unexpected spends, I'll have achieved my target in November. So given the heavy impact on the environment that storage of electronic data has, I have decided to delete most of this thread and just leave what I think are useful things I have learnt, in case it is useful to others (or future me!)
    1. Keeping a public diary keeps you accountable and more likely to achieve your target - I'm pretty sure no-one read mine as it was pretty boring, but it still kept me (more or less) on track. It also gives the opportunity for others to offer advice and support, both which are ace (thank you @LadyGnome, @financialfreedomxo, @newlife2016!!)
    2. Budgeting on a loose level when you can afford to spend more (which is what I did) means allocating more than enough to the things that you will spend on so that you know how much is left for optional spend in the budget. For example, I spend a lot on my usual grocery shop and I tried to cut back on it but I just felt restricted from my normal life so it was better to give that a larger than usual allocation and reduce how much was left for other things I didn't normally buy. Thanks go to @QueenJess for helping me realise this.
    3. Budgeting on a tight level when you are having to cut back would require a lot more planning and attention to detail - meal plans choosing cheaper ingredients, taking sandwiches on a day out, arranging all details of meetups with friends - my friends and I are reasonably cost-conscious, but there are definitely go-with-the-flow moments where we (are lucky enough to) decide to spend on something like a nice lunch or buy new clothes without worrying about it. As I can afford to live without this level of budgeting and I am fairly restrained (tap water anyone?) on my costs and life generally, this level of budgeting was a step too far for me to achieve an optional paying off the mortgage goal.
    4. Planning is key to budgeting. Going through your diary and allocating a spend to every food shop / activity etc and also ideally finding out what the costs of things are rather than just guessing. I tripped up a few times by not doing this properly - once I even forgot the meal that I arranged with a friend on the same day as doing my monthly budget!
    5. Check what you have before planning a grocery shop. Also allocate different amounts based on what type of spend you are going to do - if you do a big shop every other week and a top up shop, then simply splitting the grocery budget equally is not a useful approach.
    6. Unexpected spends are difficult to manage within a budget, so a rolling emergency fund is probably the best way of managing this ie allocate a monthly amount to build it up whenever you take money from it. This should be separate from savings for planned spend eg car, holiday etc. I do have (various, allocated for different eventualities) emergency funds, but my challenge to myself was for all spend to come from the monthly budget (apart from a few things I had set aside money for). Doing it this way meant more managing the numbers and would be difficult if you had a family - "sorry kids, beans and rice for the next week, needed to fix the boiler!" - in some circumstances this is unfortunately unavoidable, however if you can avoid it, then why not?
    7. Moving goalposts are not helpful. At the start of the challenge, I set aside money for a holiday. When that got cancelled, I put that money in the "pot" and instead of taking it out when we arranged a different holiday, I tried to cover it within the monthly budget. This led to a week of freezer soup and three weeks of a negative on both my actual and budgeted spends, which was just depressing and not very motivating. Not advised, particularly in the foreground of a worldwide pandemic and lockdown.
    8. Spend money on optional spends at the end of the month or possibly even the month after when you know the money is not needed for something else. Aiming to spend all your budget, while the aim of good budgeting, doesn't allow much flexibility in case of the unexpected.
    9. ....but consider a treat allocation in your budget, if you can afford it.
    10. Review your spending. It's just sensible.
    And...(last edit, I promise!)
    11. Laying out the numbers as I did where I could see what I had spent, what I had left and what I had left in the budget was really useful as it meant I could see what I would have left by the end of the month in case I started to think about splurging and also meant that I knew what I had left to adjust if an unexpected spend came up. There are a few apps for this  (I like Fudget as it's simple and free :) ) and it's really useful to have it on your phone as you can enter a spend straight away so it's an accurate record.
    Right...where do I start a fat loss diary...
    Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.php

    For free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.
  • caeler
    caeler Posts: 2,606 Forumite
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    You got it! 
    I got into meal planning, freezer inventory and careful expenditure on the food budget years ago but it’s an important skill when need to reign it in periodically.  I’m doing just that this month and so far I’ve spent less than £20 on food! I’m trying to use up what I’ve got in the cupboards and freezer. Yes it might result in a bigger than normal shop next month but a clear out is a good thing. 
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