Need fresh eyes on my budget!

Debtfree2026

Just catching up on your diary and just thought I'd put in my thoughts - I had my light bulb moment end of 2024 and have been utilising saving pots since Feb 2025, so over a year now.

Yes, I have all household stuff and pet food included in my shopping budget. As someone else said, it tends to even out over the month. So even though one week I may have needed to get toilet paper, washing powder and bulk buy cat food, it's likely that will see me through until the following month. Something for myself - a face cream perhaps - I'd take from my personal spending money pot.

Teaching kids to budget - I have two daughters, 5 and 10 years old. My 10 year old has a Monzo card which is linked to my account, and this is where I put her pocket money every month. She has her own saving pots! She is well aware of my 'new' budgeting ways and is fully embracing them. She actually just asked me if we could order food for lunch but we decided to save the pennies and she helped me make some eggy bread! At this time of the month I am being more frugal, using up foods from the freezer etc because I am hoping the girls will learn from my past mistakes!

I do agree - it seems that the pots are never 'full' as they are constantly being taken from! Although, I use the zero budgeting method, so although I will have zero in my main account, I do have money in my saving pots. The girls had the dentist this week and I took the money from the Health pot. Eldest needs new football boots for school, so I'll take that from the Clothes pot. I am quite strict with this and it means that I can't overspend on the groceries, as when its gone it's gone. At the moment I have £38.81 in my groceries pot to last until payday next week so although I'm not panicking, I probably won't buy a £15 bottle of wine this week!

honeybee1234

Thanks @foxgloves and @Debtfree2026 as this is exactly the sort of stuff that is useful! The "this is how it works for us on a day-to-day basis." Everyone does it slightly differently, and I like hearing that because it highlights the things that maybe I already am trying that could work with some determination, or alternative ideas that could be useful but I hadn't thought of. It's always interesting to hear about the real life "when it's gone, it's gone" sweat of personal spends and grocery budgets!

I'm just sat with a notepad and my list of pots, trying to decide whether to set up some standing orders initially to start funding them. I always preferred being able to pay to pots manually and adjusting the amount depending on what else was going on that month, but the last couple of months I've left it and left it through analysis paralysis and ended up spending it all 😳

Dakota_Rose

I started with writing everything down in a notebook but now love my spreadsheet. It’s very simple but allows me to duplicate the page for each month, to adjust any price changes and decide how much of my remaining funds after essential outgoings are going where. I can then plan how much will go into each pot and like you, I like to adjust according to what priorities I have coming up. Each month when my pay goes in, the first thing I do is fill my pots up. Every pound is accounted for with a tiny buffer in case of an unexpected price increase. I end each month with £0 in my current account.

One trap I fell into, was thinking of these as ‘savings pots’ as they are constantly filling and emptying depending on what comes up. Simply changing the name to sinking funds has changed my mindset and made me realise why I wasn’t saving over time. I didn’t actually have a separate savings pot that wouldn’t be touched other than in an emergency. I work a zero-based budget but it took me a good few months to get that accurate. I now know to the penny how much should be in each ‘pot’ and will get excited when one goes up instead of down now, sweeping any extra pennies into the emergency fund.

It sounds like you are making some really good progress in your budget organisation, and good money management depends on that. Looking forward to seeing how things improve for you 😊

Debtfree2026

@Dakota_Rose has nailed it - yes, sinking funds rather than saving pots makes so much sense!

It has taken me time to get my pots accurate too - still an ongoing process in some areas!

honeybee1234

Afternoon everyone!

Thankyou so much for all the advice so far, I honestly appreciate everything and I'm fervently noting down anything that sounds useful!

I have a very unexpected - but potentially wonderful! - dilemma. I have completely by chance had a couple of refunds, which, when added to my emergency fund, will be very close in value to the total of my credit card debt.

I am now considering the very obvious question of, "do I use this money to pay off my cards?" I'd go back to zero in my savings which honestly scares me, but the feeling of freedom from that debt would be amazing! I'd still have my Creation interest-free credit for my sofa, however I'm happy to let this tick over for now with it being 0%.

If I'm being brutally honest (don't judge me!) I know this would mean needing to be on point with my budget as I'd have no savings to dip into, and I'd be looking at closing cards. But this is the position I ultimately wanted to be in... I just wasn't prepared for it to be so soon!

Any advice or thoughts welcomed!

Dakota_Rose

My advice would be to hold on to (at least) £1000 of your emergency fund and chuck the rest at the credit cards. The last thing you want to do is clear the cards, empty your EF and then find that the budget still isn’t balancing and be straight back into the cards with no safety net to fall back on. What a lovely decision to have to ponder though!

elsien

I agree. Whilst the credit card being paid off would be a huge relief I think splitting it between an emergency fund and the credit card still gives you that buffer if you need it.

Debtfree2026

I actually did something similar this month - basically I spend £1000 a month towards my debts, £500 towards my credit card and £500 towards a personal loan. The credit card was on 0% and minimum payments were about £130, fixed payment on the loan is £459.29, so I was overpaying on both. I just felt ill to think of how lovely that £1000 would be going towards savings/etc every month! I had quite a bit saved into my sinking pots and decided to pay off my credit card balance. Taking my sinking pots down a lot but meaning that I can now use that 'spare' £500 to overpay even more on my loan (the one remaining debt I have!) or to replenish the pots again where needed.

I did still have over £1000 collectively in the pots which I could utilise in an emergency, so I think Dakota_Rose's advice above is probably the best scenario for you, even if it means you would have a bit left on the credit card. I know what it's like though, I am so impatient to get this debt gone! I have a spreadsheet with my incomings/outgoings etc and I've already got one prepared for 2027 and to not have any debt payments going out is really pushing me forward and keeping me so motivated!

foxgloves

Lots of food for thought here, & it's a positive thing that these refunds have arrived. Your over-riding aim seems, quite rightly, to get rid of the millstone of credit card debt, so I think I would be inclined to make your emergency fund up to £1000, then pay the rest of it to credit cards, cancelling & cutting them up as you go. Then adopt a snowball approach, as your paid off cards will no longer require any monthly payments so that money can be added to what you would normally pay to the remaining ones to bring the balances down faster.

I know you've been taking a good look at your pots too, so it's a good time to underline how, once your new budget is all tweaked & working properly, that your Emergency Fund needs to be there to cover unforeseen emergencies, not the annoying predictable regular expenses we know all too well are going to come along, like new boots, car servicing, fridge, presents, etc. I say this not in judgement, as all these things would have been considered 'emergencies' by me back in the day, as I never used to set money aside for anything.

elsien

This post is partly for anyone reading as to why an emergency fund is a very good thing, ( I know you already have one honeybee1234) and partly a rant because I am not a happy bunny. 🙂

I take 87-year-old parents abroad for the last thing on her bucket list as it’s the last trip abroad we will be doing. It costs more than planned because of things like having to pay for taxis instead of using public transport.

Three hours before I was due to fly out water started coming through my ceiling. There was no time to get anyone in. So to play safe, I turned off the water and electrics and spent a fun hour defrosting my freezer and throwing away all my carefully hoarded yellow sticker food, half price joints, batch cooking and the occasional steak bought to treat myself with. I am still in morning about that.

Came back and had to get a plumber out to fix the leak. Had to call them out for a second time because the pipe issue has caused a problem with the boiler, which now also needs repairing. And the stopcock which decided this was the most opportune time to also spring a leak.

Ceiling is an old plaster and lath one which may need to come down. It at least needs repairing and repainting, but my preference would be to replace it with plasterboard while the work has been done. And to get to the floorboards, they ended up cutting the carpet because that was the best option in the circumstance.
My 25 year old freezer was on its last legs anyway so while it’s empty it seems like a good time to get a new one.

absolutely no idea what the bill will be as yet or how much of this the insurance will cover. Without a hefty emergency fund this would all be on the credit card.

The food budget has just splashed out for a good bottle of red wine!