Stopping the backsliding… a family of four no longer living beyond their means

FlorayG

Bluegreen143 said:

Excited as I’ve just twigged that the planter full of flowers planted by MIL in our garden is edible nasturtiums! (Can you tell I’m still such an amateur at gardening?!). Definitely going to try one tomorrow, apparently the flowers are nice in salad. 

You can pickle the seed pods as well to use as capers
This is an interesting thread I will follow
Couple of suggestions; chicken breast is the most expensive part and you seem to use a lot, could you use thighs instead? Also when cooking make large batches and eat the same thing two evenings running, thus saving time and cooking fuel
My vehicle costs me an average of £1,000 a year to keep on the road ( but it is quite old and I expect repairs) but there's no way to really know - I just had a catastrophic and unexpected MOT fail that cost me nearly £2,000 to get fixed! Last year it only needed a brake light fixing.
I'm sure you are aware that whatever new mortgage deal you get at the end of this year is going to cost you loads more then your current one so you are definitely doing the right thing getting ahead before that happens

Bluegreen143

FlorayG said:

Bluegreen143 said:

Excited as I’ve just twigged that the planter full of flowers planted by MIL in our garden is edible nasturtiums! (Can you tell I’m still such an amateur at gardening?!). Definitely going to try one tomorrow, apparently the flowers are nice in salad. 

You can pickle the seed pods as well to use as capers
This is an interesting thread I will follow
Couple of suggestions; chicken breast is the most expensive part and you seem to use a lot, could you use thighs instead? Also when cooking make large batches and eat the same thing two evenings running, thus saving time and cooking fuel
My vehicle costs me an average of £1,000 a year to keep on the road ( but it is quite old and I expect repairs) but there's no way to really know - I just had a catastrophic and unexpected MOT fail that cost me nearly £2,000 to get fixed! Last year it only needed a brake light fixing.
I'm sure you are aware that whatever new mortgage deal you get at the end of this year is going to cost you loads more then your current one so you are definitely doing the right thing getting ahead before that happens

Thanks FlorayG - very aware of the mortgage going up and it is definitely is an impetus behind me deciding we need to shape up. 

Our current deal is about 1.9% so it will go up loads!! We have 25 years left on it and DH is 40 so I don’t think we can increase the term to pay less now (nor do I want to drag out paying it and pay more interest in the long run). I am very pleased that we didn’t move and take on a bigger mortgage when I returned to work after being a SAHM - we could have, because our earnings doubled, but we’d be in a right mess now. 

Yes, we eat tons of chicken breast. I occasionally serve thighs on the bone as a barbecue thing/with salad. 

My DC are not overly fond of thighs in things like curry or pasta, so I’ve gotten into the habit of buying breasts, but I should branch out more so it’s a good reminder. We are actually quite strict with their eating and don’t usually pander to pickiness - when I post my meals, the children always eat the same as us and we do enforce the eating of at least the protein and veg components so they have a fairly varied palate  - but I’ve slid into usually buying chicken breast as one less battle to pick. 

I used to do batch cooking when there was just two of us - the batches need to be bigger for a family so it always feels easier just to make one lot - I work part time and finish work at 3pm so I do generally have plenty of time to cook and DH is a decent cook too so takes over if I’m busy or tired. I would like to get in the habit of keeping at least a couple of emergency meals in the freezer again to stave off emergency takeaways.

We’ve had terrible luck with cars the last couple of years. Our car before that was a £2,000 banger which ran beautifully, never needed repairs and lasted five years. We felt so smug about our wise purchases! And the two cars we’ve had since then have been disasters, so much so we had to get rid of one after a few months and replace with our current car 🤦‍♀️ which, in spite of being so much more expensive and newer than the original banger car, has needed tons of repairs since we got it! 

Baileys_Babe

We buy deboned chicken thighs, chop them up, and use them in many dishes. We occasionally use chicken fillets if we can buy them at a good price.

We too are a family of 4 (3 adults, and 1 teen) we often batch cook and freeze the other meal for easy cooking on another occasion.

Bluegreen143

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household........... 2

Number of children in household......... 2

Number of cars owned.................... 1

Monthly Income Details

Monthly income after tax................ 2279

Partners monthly income after tax....... 2400

Benefits................................ 170

Other income............................ 0

Total monthly income.................... 4849

Monthly Expense Details

Mortgage................................ 530

Secured/HP loan repayments.............. 0

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 170

Electricity............................. 241

Gas..................................... 0 inc in electric 

Oil..................................... 0

Water rates............................. 0 inc in council tax

Telephone (land line)................... 0

Mobile phone............................ 0 inc in personal budget 

TV Licence.............................. 15

Satellite/Cable TV...................... 13 Netflix & Amazon prime 

Internet Services....................... 26

Groceries etc. ......................... 550 New budget, hope to reduce further 

Clothing................................ 62.5 Kids only, adult clothes inc in personal budget

Petrol/diesel........................... 150

Road tax................................ 20

Car Insurance........................... 42

Car maintenance (including MOT)......... 125

Car parking............................. 80

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 90 clubs & pocket money; will increase in next year as DD hasn’t started anything yet 

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 0

Buildings insurance..................... 10

Contents insurance...................... 0

Life assurance ......................... 75

Other insurance......................... 0

Presents (birthday, christmas etc)...... 150

Haircuts................................ 0 cut our own 

Entertainment........................... 1100 £500 each personal budget + £100 for family entertainment. As discussed, our personal budgets include hobbies, socialising, phone bills & personal subscriptions, our own clothes etc. I usually save a chunk of mine too and have built up £1,000 between cash & S&S ISA in the past few months.

Holiday................................. 250 

Emergency fund.......................... 125

Total monthly expenses.................. 3824.5

Assets

Cash.................................... 5211 savings 

House value (Gross)..................... 225000

Shares and bonds........................ 32500 inc pensions 

Car(s).................................. 4000

Other assets............................ 0

Total Assets............................ 266711

Secured & HP Debts

Description....................Debt......Monthly...APR

Mortgage...................... 130000...(530)......1.9[b]

Total secured & HP debts...... 130000....-.........-  

Unsecured Debts

Description....................Debt......Monthly...APR

Credit card....................1070.6....740.......0[b]

Total unsecured debts..........1070.6....740.......-  

Monthly Budget Summary

Total monthly income.................... 4,849

Expenses (including HP & secured debts). 3,824.5

Available for debt repayments........... 1,024.5

Monthly UNsecured debt repayments....... 740

Amount left after debt repayments....... 284.5

Personal Balance Sheet Summary

Total assets (things you own)........... 266,711

Total HP & Secured debt................. -130,000

Total Unsecured debt.................... -1,070.6

Net Assets.............................. 135,640.4

Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.

I’ve done an official SOA, though I find the categories a little confusing! (No category for buying “stuff” for your house or garden for example! Is that meant to come from entertainment or the leftover budget at the bottom?!).

If I had been sticking to this budget previously we’d never had put expenses on the credit card and would have around £1,000 leftover budget each month to save 😳 so clearly, I’ve been overspending to quite a large degree. Though until recently I was paying my mum £400 a month to clear the car loan (she lent us £6k interest free to buy our current car - I managed to clear that in under 2 years and was paying £400 a month the last few months). So I suppose that accounts for some of it. 

I know that groceries have been much higher than targeted for at least a year but that can’t account for it all. 

While we’ve had some car emergencies and white goods breakdowns, we had about £3,000 of emergency savings last autumn which paid for those (we are now to £550 emergency savings). So while that partially explains why our savings are low it doesn’t explain the monthly budget shortfall. 

MFWannabe

Your life insurance seems incredibly high? 

Is that for both of you and does it include critical illness cover? 

Bluegreen143

It’s for us both and there is critical illness cover (though I think it only covers Red - I wanted to cancel that bit recently but he wasn’t keen).

The reason it’s higher is we have two separate policies. One joint policy which covers our mortgage if either of us dies and we’ve had for ages. 

I have mentioned before that my husband’s brother sadly passed away unexpectedly (in his late 40s) last year which had a huge impact on us. He didn’t have a will or everything set up well and had a more complex family situation (divorced with adult child and engaged to someone else) and it really made us realise that we didn’t have our own affairs in order. We redid our wills and looked at our insurance again. 

I get a whopping 7x my salary in death in service benefits so Red would be absolutely fine if I died with a huge lump sum and the mortgage paid off with the joint policy. Likewise if we both died in some accident we wanted to make sure the kids had a really good start in life to still go through uni and get on the property ladder etc. 

However his death in service was a meagre 1x salary so if he died, I wouldn’t get a large lump sum. We thought this is crazy to leave me more vulnerable particularly as we’ve always considered him the main breadwinner (though I now earn just about as much as him so I guess that’s not true). We took out a second policy to insure him to the level that I’m insured through work. 

I know it seems high but it’s bought Red peace of mind that the kids and I would be ok if anything happened to him. Red’s dad sadly died in his thirties and now his brother unexpectedly dying in his forties - I think he has a bit of a paranoia and doesn’t see himself living to an old age (he’s 40 now and has already outlived the age his dad got to). I read once that this is actually a very common fear particularly amongst men whose dads die young! 

Red’s half siblings were also orphaned at a young age when his dad died, as their mum had already passed on, and he witnessed the effect of there not being much provision for them as they were being cared for by pensioner grandparents (eg having to leave school at 16 to get jobs to contribute rather than going to college etc). 

I think once the kids are older and out of education we will obviously heavily scale down on the life insurance as the main function of such high levels of cover is to protect them. 

foxgloves

Hi @Bluegreen143, 
I think that the SOA proforma is limited to fairly standard financial outlays, including of course all those essential bills. I know many of us money savers here on the diary forums put away money into various savings pots to cover other categories, especially those where expenditure can be expected at some point. I think your category of "House stuff" falls within that, really. It's quite a broad category, as technically could cover anything from buying 2 new bath towels to annual servicing of appliances to a new sofa. Some spending within this category would be very much discretionary & while not letting stuff get to the state of actually falling to bits, a lot of it can often wait until debt has been repaid or can be saved for. 
We've been debt-free for quite a long while now, something which was facilitated first by me finally having a major LBM after 2 decades of living beyond our means, followed by learning to budget aka 'finding a system which worked for us'. I still keep a diary on here to keep me on the straight & narrow & to share ideas, Something which works well for us is having a range of savings pots. I have a spreadsheet for all the usual bills/DDs, then set a monthly grocery budget & we both have £100 a month for Personal Spends. I pay a monthly amount into a regular savings account, premium bonds & car replacement fund, then make discretionary payments into our savings pots as needed. The money is simply held as a lump sum in a separate bank account & the individual pot amounts administered via a simple spreadsheet. Our 10 savings pots are:
Car maintenance
House & garden
Clothes
Holidays
Presents
Dentist/Optician/Medical
Appliances replacement 
Tech replacement
Meow Fund
Leisure/entertainment
Some pots require a set amount each month to avoid problems further down the line. For instance, holidays. If a holiday costs 'X' & I know the date the balance needs paying, then I can work backwards & divide the total (inc cattery fees) by how many months I have to save it. Other pots rely on knowledge of circumstances as to whether they need boosting or just a 'trickle in' approach. For example, I am ensuring our clothes pot doesn't go too low atm as I know there are at least 4 pairs of boots in this house which are due to cark it pretty soon & will need replacing at least on a rolling basis. Our appliances replacement pot is loosely based on having the money put aside should we be unlucky enough to have 2 white goods lose the will to live fairly simultaneously  (which happened to us not many years ago), our car maintenance pot is based on needing an annual service, an MOT & a couple of tyres. The Meow Fund covers flea treatments, annual vet check-ups & boosters as well as some for any medical emergencies - we have insurance, but would need to pay the excess. I love having these Savings Pots because without them, my options (as Chief Budgeter in the relationship!) would be to raid our Emergency Fund for routine non-emergency stuff for which we can plan, or to use a credit card. As we both made the commitment not to use a credit card for borrowing ever again (we have a spendy past), this is not an option we would want to take. So the Savings Pots play an important part in keeping our finances straight & cushioning shocks. I always think of them as our 'first line of defence'. So that's a long way of saying that there's no reason you can't make categories for discretionary spending once all your essential bills/DDs, food expenses have been taken into account.
Good luck with it all. You are on a decent income so hopefully will be able to make some good inroads.
Best Wishes,
F

Bluegreen143

Thanks @foxgloves (I’ll check out your diary). Thanks for sharing your pots, that’s really helped me refine what mine should be. 

I’ve started using YNAB again and been tweaking my budget categories over the past week or so. 

I think I’ve landed on having the following structure:

Bills & joint subscriptions (obvious mortgage, car insurance, energy, internet etc) 

Monthly spending
- groceries
- chicken feed & bedding
- petrol & parking
- kids’ pocket money
- misc

Pots 
- car maintenance
- home maintenance
- dental/medical/optical
- kids’ clothes
- gifts & celebrations
- holiday
- home & garden
- leisure & entertainment
- kids’ activities 

Savings (longer term stuff like help to save accounts, LISA etc)

Personal
- clothes
- books & hobbies
- socialising 
- bills & subscriptions
- personal gifts 
- savings for going away & wedding ring replacement
- misc personal

foxgloves

You're welcome. Most budgets need tweaking along the way as we learn what works optimally for us & we're all different. I think I'm on about Version 3.2 of my budget here at Foxgloves Manor but even now I still make little tweaks if I think it might work better.
F

theoretica

Looking at your comments around the budget, you seem to have been operating with easy access to spending money, and the idea that you save what is left over.  Rather than paying fixed bills first, putting money into various saving pots immediately (including long term for retirement, medium term for the next car and short term for holidays and presents) and only leaving the money you intend to spend - whether groceries or personal - available.  Save first, not what is 'left over' at the end.  Once the credit card is cleared, putting away at least the old £400 a month to rebuild car savings seems very worthwhile.

Are there any ways you could avoid paying so much for parking?  I am sure it varies depending on where you live, but that is a bill that catches my eye.