Budget 2022 junk free diet

Hello,
I'm going to try and stick to a budget this year. A bit about me:
Moved into first owned flat 2.5 years ago. It was a complete dump with no kitchen so I've nearly finished off paying £7k for a new kitchen. I was renting for about 12 years before then and spent 60% of salary on rent 😱
I've not had any spare cash to make the flat nice so it looks a bit barren.
I have a terrible junk food habit so need to address that this year as it costs loads to eat junk regularly.
I took a pay cut to change career but that fits in with my kitchen debt ending so that's not too different with income.
I've got £85k left on mortgage and I've been trying to overpay. I end up overdrawn every month but that it probably due to my poor budgeting skills. I still want to overpay the mortgage as the interest is shocking.
I need an emergency fund too and have zero at the mo.
Help me keep going 🙏 
Debt remaining £460 (£7k 2020)
Savings: 0
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Comments

  • joedenise
    joedenise Posts: 16,560 Forumite
    First Post Name Dropper First Anniversary
    I think I would stop overpaying the mortgage if you are going overdrawn every month.  That is costing you far more in interest that that on your mortgage.  You definitely need to get an Emergency fund together, along with savings for your annual bills.

    If you really don't want to stop overpaying the mortgage perhaps you could Tilly Tidy, ie just rounding down your bank account either daily or weekly.  Yes it would be much smaller amounts but hopefully it would also stop you using your overdraft.

  • Thanks JoeDenise. I've got an interest free overdraft but it doesn't feel very good to go into it every month. Yes, maybe I should just pay a smaller amount. I thought I could aim to pay what I used to pay in rent, but then I didn't have a kitchen to pay for then.
    I will get an emergency fund. It's a bit scary having nothing. I did have one when I rented but it all went on the flat deposit. 
    Thank you for your ideas. It's very motivating 😊
  • Jami74
    Jami74 Posts: 1,017 Forumite
    First Post Photogenic Name Dropper First Anniversary

    I'm going to try and stick to a budget this year. 
    Have you made a budget to stick to yet? Do you know how much you currently spend and where you could cut back?

    I started budgeting four years ago and it is an evolving journey, rather than I thing I just did.

    I use a spreadsheet (which has also evolved a lot over time) to document every single penny I spend, it was initially eye opening where my money actually went, for example I had underestimated grocery shopping by several hundred a year. Plus, there were annual expenditures that I had never taken into account. My very first step was opening a separate savings account and putting a set amount in each month for the next Christmas. 
    Debt Free: 01/01/2020
  • First things first, set up a spreadsheet and detail all your fixed outgoings for the year eg contractual mortgage payment, gas, electric, water, TV, mobile etc.
    Next go through 6 months bank statements and see what you're spending on food and other spends, work out an average and put that in for each month.
    Each month check your budget to see how it went and adjust as necessary.

    If it helps you resist temptation open a savings account or interest paying current account with a totally different bank to where your income goes. When you get paid, move £10 over as that's the start of your EF. After a few months of not dibbing in, increase it. 

    Meal plan and write a shopping list, of it's not on your list it doesn't go in your basket.

    Recognise there's a huge difference between 'want' and 'need'. 
    'Want' is yet another dress when you've got 5 perfectly good ones, a green vase as it fits better with your colour scheme even though the clear one you already own isn't broken.
    'Need' is you've laddered your last pair of tights or got a hole in your shoes etc.
    Mortgage started 2020, aiming to clear it in 2026.
  • Thank you Moving Forwards. I'm a bit scared to look back at my spending. I waste so much on food and not food planning. I will save a bundle with meal planning and not buying junk.
    I've read a money guide about having 6 different bank accounts and using them to funnel savings, so I'm going to try this.. 

    https://www.theguardian.com/money/2021/jun/16/want-to-stick-to-your-budget-open-six-bank-accounts

    I'm writing down my spending every day now and I have got a spreadsheet, I'm not sure how thorough it is. I find it hard to do an honest spreadsheet as I am really tough on myself on a spreadsheet, and then kind of don't follow it. So I need to be honest and write it all down.

    Thank you! I'd love to have a financial cushion and not feel so unprepared each week.

  • Having lots of accounts for bills could make it easy to lose track, so be very careful.

    The way I do things is have my spreadsheet for income and outgoings, when I spend I reduce that pot down and my amount left in account. 

    My normal current account is wages in and bills out. 

    I have a dedicated car everything and all insurances current account. That has money added each payday. When car or home insurance is due, or a car repair bill, it's taken from that account.

    I have a current account holding £1k as an emergency post ie a leak, washing machine or fridge failure. The only thing I do with that account is move the interest out each month and it took me a while to save up the £1k.

    All my other savings accounts have a purpose eg an internal modernisation account, a communal repairs account just in case something needs doing, a mortgage EF in case I lose my job, a bills EF again in case I lose my job, ERC account in case I remortgage or want to move. 

    If I don't spend my food budget for that week, I transfer the difference to one or more account or occasionally treat myself to something a pair of jeans, item of jewellery, indulgent shower gel etc.

    Originally I worked in cash, take my money out for the week and that's what I had for travel, food, fun etc. I never spent it all and would take out less the following week; personally I feel more accountable when using cash, it hurts more to part with it. 

    With possessions I do one in one out. If I buy clothes an existing item has to go, same with everything else I buy.

    This is the way I've done things for over 5 years and it got me out of debt, while saving for a home and then subsequently building up my savings again ever since. 

    It will be trial and error, takes willpower too, but you'll find your feet, however you must be honest with yourself about where your money is going else how are you to relearn and undo some of the things?
    Mortgage started 2020, aiming to clear it in 2026.
  • That sounds so sensible. Can you be my financial adviser please 😆
    Today I did an honest spreadsheet of all my outgoings. There was a lot I had left out such as insurance and water and other bits.

    I've planned to pay off the remainder of my debt tomorow (£460). I got a bit of Christmas money and I get paid tomorrow so I can clear it off and start the year debt free, which is great.

    I've spent the evening doing the six accounts. One is a main account, one is a weekly spend acount and the others are four versions of savings accounts for different things.

    I totally agree with you regarding cash. I think I'll take out my weekly spending in cash as it definitely feels more real l, and as you say, painful to part with.

    It feels really boring at the beginning as I need time to build up savings from nothing.

    I've removed my card from Amazon so I won't do impulse convenience shopping. 

    I'll read your post again in case my six accounts plan gets too complicated!

    I really want to spruced my flat but I'm going to have to build savings first. I don't want to be in debt again. I've never taken a big debt before and I'm so relieved to see the back of it!
  • I'll pop up random tips if I see a gap in your plans as your diary progresses 🤭

    Seeing everything in B&W it's easier to spot where something has been missed. You have included Christmas and birthday present savings too? 

    I allow myself £10 pocket money a month, sometimes I spend it on indulgent food treats, other times it's just getting my brows done. 

    A pot of paint can transform a room, as can rearranging furniture, finding artwork in charity shops or local selling sites. 

    Had I known you'd clear your debt so quick I would have pointed you to where several of us keep our savings diaries!
    Mortgage started 2020, aiming to clear it in 2026.
  • Thank you! All tips appreciated!
    Just £10 a month? Gosh that is good. I am far too treaty to myself. I even treat myself if I go to the supermarket, which is a bit unnecessary. Its nice to have a set amount for a guilt free treat. I'll factor that in. I haven't done mine for a year. I think they would have their work cut out 😆

    Yes I could paint as a cheap way to spruce up a room. I was going to buy a new piece of furniture with my Christmas money but thought it was a bigger gift to start off 2022 debt free. 

    I was going to buy a table as well but my friend is giving me one for free in exchange for helping her paint, so that's a bonus.

    Oh yes please point me to the savings direction 🙌 

    How do I keep posting on my blog? Do I just do a new post on the same thread?

    I thonk this community is really going to keep me on the right track 😊



  • Good luck in your journey... Take your time and don't force it, or you can end up frustrated. As others have said save a bit first..

    I've had a number of accounts for 10 or so years now as it helped me save and budget better and prepare a little better for the expected and unexpected. I e tweaked them over time but it's last 3-4 years where I'm happy how they are laid out and work for me.

    Mine are as follows...
    Account 1.... Income goes into this one, and money gets moved across into other accounts, what's left on this has to last me the week/month.. I can spend this on whatever I like and don't record it, I'm not as vigilant as others (it frustrated me recording to the penny or even pound what I spent)... So for me personally I need some flex.

    Account 2 ... Household bills... basically all my bills come out of this account and I pay in a month more than what comes out so this gradually increases over time.

    Account 3... Food, days out, prescription, school payments and clothes.

    Account 4... Xmas and birthdays... I worked out who I buy for every year set a budget for them and times it by 2 for birthdays, it also does mother's/father's Day, Easter eggs... Secret Santa, Xmas booze and food, Xmas work party, wrapping paper, cards and £50 unaccounted for spends a year.... Like account 2 more goes in than actually gets spent.

    Account 5... I call breakdowns... So if TV goes boom or the boiler does I have the money to replace. Granted it's low at the start but 2-3 years soon goes by and it all adds up... Think of it this way every time you get offered £15 insurance a month when u buy an electronic item, say no and put the money here.

    Account 6... Holidays... A set amount gets paid in here a months which will give my daughter and I a holiday and spending money once a year...

    Account 7... Just savings i don't ever really touch...

    Anything spare ££ from account 1 goes off the mortgage at the end of the month. The reason I separated them up like this was, it used to upset me money was coming out of my savings for a birthday or a holiday etc when it was all in one account... now s t up for the way I like I'm ok with the first 6 account's fluctuating... It's when account 7 takes a dip makes me upset these.. Which fortunately hasn't happened since I set it up this way.

    As for your home furnishings, have a look around charity shops you can get no end at great prices if you have an eye and keep looking regularly. People throw away perfectly good stuff, fortunately some donate to charity
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