Learning to walk before I run

killerpeaty

Over 3 hours talking to a mortgage advisor sounds exhausting. Is £60k enough? Will you be alright with the extra repayments each month?

I hated the hard sell when I bought, I only went in to close my htb ISA and ended up in a meeting for 40 minutes!

edinburgher

@Sistergold - we're not actually overspending by £900/mth and getting deeper into debt, we were just nominally saving that amount towards the cost of an extension (but weren't really). I suppose that the extension is 50/50 in terms of needs and wants. We need an extra bedroom, as a baby and a to be 7 year old cannot share and the third bedroom is a tiny boxroom, half of which is taken up with a non-negotiable desk that we work from. The kitchen/diner part of the plans is more of a want and will be prioritised accordingly.

@killerpeaty - our actual budget will be closer to £80k (additional borrowing, savings and approximately £10k of spending of 0% CC if it comes to it). The mortgage advisor built all of these facts into our application and was perfectly happy that we comfortably passed affordability on this basis. They also decided to ignore 1/13 of my guaranteed salary (which was irritating, but still didn't affect affordability).

edinburgher

So, we have had the chat and cut a few budget lines. It frees up c. £300 this month - suggestions welcome for how best to allocate this (additional protection, start an emergency fund, keep some for extension to reduce debt funding, start a baby fund to reduce impact of lost earnings)?

This isn't as good as it could be, but it's a start and I have also begun the work of reducing problematic budget lines such as holidays, pocket money, home maintenance, presents and groceries. As of next month, we will have a budget surplus of £850 (minus the increased cost of any additional protection we take out, likely to reduce this to £750 or so). I have also moved from an annual average to my salary to a month-to-month reckoning of this (May 2022 will see double wages).

Salaries	£3,837.68
Mortgage	£582.89
Groceries	£500.00
Holiday	£439.31
Pocket Money (Mr E)	£250.00
Pocket Money (Mrs E)	£250.00
Council Tax	£226.00
Presents	£170.68
Children	£158.57
Pets	£145.29
Car Maintenance	£119.08
Utilities	£103.00
Home Maintenance	£100.00
Credit Card (Sainsburys)	£59.40
Electronics Replacement	£50.00
Petrol	£47.85
Car Insurance	£42.30
Credit Card (TSB)	£36.25
Pet Insurance	£33.58
Swimming Lessons	£26.50
Virgin	£21.00
Union	£20.30
Life Insurance	£15.31
Road Tax	£13.57
TV Licence	£13.37
Pocket Money (DD)	£12.00
Mobile Phone (Mr E)	£10.14
Parking	£8.78
Window Cleaning	£8.00
Mobile Phone (Mrs E)	£7.60
Home Insurance	£7.51
Netflix	£5.99
Breakdown Cover	£5.25
Dentist	£5.00
Garden Waste	£4.45
Amazon Prime	£3.55
Glasses	£3.48
Account Fee	£2.00
JISA	£1.00
Totum Student Card	£0.61
Expenses	£3,529.60
Balance	£328.07

edinburgher

In the end I kept back £100 for protection and split the remainder three ways - £75 each into Emergency Fund, Extension and Baby pots Feels a bit weird to be starting an EF after so long

Bought myself a lottery ticket as well and added £5 (£6.25) into my pension to balance out the fact that I've bought two over the last month. Mrs E is taking me on a canal boat trip tomorrow as an anniversary gift - I've always fancied the idea and am looking forward to learning the basics and seeing if it might work as a family holiday a few years in the future.

Karmacat

Hi Ed.  Oh my, this has been a big deal.  Congratulations to you for investigating new numbers.  I started reading a couple of days ago, took some time over it to understand it - I'm currently looking at this page and the first page (with the original SOA) on different tabs.  So, that first SOA was sort of nominal, and the one on this page is closer to reality?  You've obviously been working on cutting some things down, and cutting out a few altogether.  In the amended budget. holidays are still £5k or so?  Of course, you're now limited to school holiday times ... still seems a lot, though, especially as I thought you holidayed fairly locally, don't know though.    And "children" is £158 (I'm guessing that's childcare though?).  

Is this a transitional budget, to be amended again after you've got used to watching spends a bit more carefully?  It's really different, good for you.

And I hope you enjoyed the canal trip!  I did a week's trip at one stage, it was a bit more work than I like on my holidays but it was a lot of fun.

LadyWithAPlan

Hope you enjoyed the canal boat ride, I love them and occasionally have flights of fancy about living on one, but then wake up and realise it is a bad idea for many reasons.

This new budget is  a great next step and lots of great sinking funds.

 I guess the trick is deciding what is more important to you both in the short term - would you rather have an expensive holiday or an extension quicker, are you happy to keep £250 each pocket money rather than  maybe using some of it to get the  EF  or extension fund done quicker. 
The grocery seems quite high but maybe it includes restaurants as well?

It is always a balance and I know some people become very frugal, others like to live a little or a lot during the journey. 
For me I could not be at peace til I had a decent emergency fund, I am self employed and it is just me so that is why I sleep better knowing if everything stopped I have enough for 6 months no earnings and all my sinking funds.

edinburgher

@Karmacat @LadyWithAPlan - the Holiday budget will be gone as of next month - we have a pre-booked trip to London (non-refundable flights from early pandemic times and accommodation already paid for). So yes, equivalent to £5k a year if we were using that much money every month, which we won't be. We have one three night break booked next April (pre-baby) and that will likely be us for at least the next 18 months.

KC "Children" covers all child specific costs (so DD clothes and uniform, art supplies, the cost of her wee drama class etc.) It covers everything bar her swimming lessons, which are currently a separate budget line due to a quirk of when I was using YNAB. We don't have childcare costs beyond the odd summer camp type session at a local provider. Mrs E works p-t to make this work and I have Fridays off.

The reason for the updated budget was (as you say), to provide updated figures. The first page was with no changes, the second posting was for October (quite a few changes made) and I'll post again until I no longer need to think about budgeting Yes, very different, I badly needed to get back to the basics.

LadyWithAPlan - we've *never* really had a decent Emergency Fund - bad habit of working for public sector employers, or stable sectors. Only one redundancy between us in nearly 20 years of f-t working (touch wood). I know we need to change, hence sorting out our protection needs etc.

Surveyor coming out tomorrow to see if we've gone too high with our valuation, underwriting continues and architect coming out on Friday to show his first rough suggestions and to (hopefully) take measurements for actual plans.

Karmacat

edinburgher said:

The reason for the updated budget was (as you say), to provide updated figures. The first page was with no changes, the second posting was for October (quite a few changes made) and I'll post again until I no longer need to think about budgeting Yes, very different, I badly needed to get back to the basics.

Then I have to say, I think you're dealing with it all really well - it can't be easy to take stock like this and make such big changes.  Keep posting the amended budgets, we'll keep reading  

And given that the holiday is of the type you describe above, I'm kind of glad you've got it to look forward to, and it's at an appropriate stage in Mrs Ed's pregnancy.  I hope you can block off all the finance admin stuff and just enjoy it.  

In the meantime, good luck with the surveyor and architect visiting, hope it's as simple as possible.

edinburgher

Surveyor has been and gone - no idea what they thought as they never tell you anything on the day!

I have paid our first new variable monthly bill with Green Energy (UK). It came in at £56, so a good bit under the £103/mth they had estimated. I appreciate that this will be an average price. I retained half of what was left in that pot and split the rest three ways, with £11.87 going into Emergency Fund, Extension and Baby pots. Right, best start working as I'm 2 minutes late!

LadyWithAPlan

Good luck with the survey results.

Your trip before the baby sounds lovely. If you have never jumped on a boat down the Thames I can highly recommend it, you can get on the normal river boat at say  Embankment and go to Greenwich or indeed West to Kew. You dont need to pay for a tour, just the normal boat is hop on/off. 

I have still got ongoing battles with SP as still no gas meter and I can see on the elec meter its gone from 35p starting each day to £2 a day  this week. I need to get the Ombudsman involved again as the last from the scottish energy company who was sorting it all out sems to have left! I will never use them again