% percentages to use for budgeting and increase in Electric costs

ashopper327

Hello,

Our Electric has increased from £91 per month to £165 per month

I need to re-budget our finances and I think I've been budgeting all wrong.

I first take the amount of income we have coming in (all benefits) - PIP (I have previously been including the amount that goes straight to motability and then offsetting it in full) likewise I offset in full the adult daily care costs (22%), state pension, pension credit and carers allowance.

Then I take away household expenses - Rates, Electric (no gas), TV licence, Sky and Mobile - rent and council tax covered by benefits. - 23%

The I take away Insurances - life cover, household cover (no funeral as this has been paid up) - 2%

Then I take away the regular savings - for Xmas (only accessible in November), birthdays (by regular credit to Amazon)- 5%

Then I take away charity, national trust membership and lottery - 2%

Then I take away other household bills such as arranged (via collection agencies) debt payments, a credit card (maxed out) and PayPal (maxed out) just over minimum payments. - 20%

What's left over is the amount that I use for groceries and non-food items - so this becomes the variable amount. - about 26%

My question is - am I doing the above the right way round - I've seen other advice that suggests I should be using a set amount to budget for groceries etc and that the "other household" bills should be the variable amount?

If I should be using a set amount for shopping does anyone know what the "going rate" is for a 2 person (over 50) household with no children on nothing but benefits is - because I use £350 to £400 and get told that this is more than the national average.

I am hopeless at budgeting and that's probably why I feel like our finances are a bit out of control, whereby sometimes I have not left enough in the bank to cover a bill and it get's bounced - not good for the credit rating (which is really low anyway). So I think I spend too much on groceries etc.

My husband smokes cigars (he's 71 and won't quit), this has to come out of the food budget BEFORE I buy food etc - this is about £60 per week.

I'm not including anything for replacing clothes, shoes etc., neither am I including emergency expenses - should I be doing that, and if so how much should I be putting aside? - no access to catalogue as no credit.

Should I write to Paypal and transfer them over from "usable" credit to arranged credit (i.e. take them out of the picture?).

Do people find it easier to have separate accounts for each budget - e.g. one for food, one for bills, one for savings etc - are there any card only accounts out there available to those on benefits with low credit ratings, maybe if I regularly put an amount on this every week (as pension credit, carer's allowance are paid weekly), then maybe I won't overspend or be tempted to overspend!

Bankruptcy/IVA are NOT options we would consider, just need to sort out a set amount to try and stay within.

Any advice would be much appreciated.

Chino

As you are making debt repayments and have maxed-out credit cards you should cancel the Sky TV, charity, national trust membership and lottery payments. Also, do you need life cover?

Consumerist

I would suggest you copy this post over to the <Debt-free wannabe> board. Please add a post here if you do that, to avoid responses being split between two boards.

SuperExcelMan

My husband smokes cigars (he's 71 and won't quit), this has to come out of the food budget BEFORE I buy food etc - this is about £60 per week.

Any advice would be much appreciated.

He is spending £240 a month of YOUR joint money a month on cigars when you are in debt, and your on here asking for advice?

That’s abuse. Tell him to buy them himself after he has paid half of all the bills, including food.

p00hsticks

I second going over to the debt free wannabee board and filling an an SOA - but in general, you need to prioritise essentials (electricity, food, essential travel) above 'luxury items' - SKY, National Trust etc and cut back or drop those non-essentials if there is not enough money to go round