Best way to work out what you have left each month?

Lazy_Panda

Bit of a reality check recently, I always thought I was doing fairly well salary wise, but when I actually broke everything down monthly, it didn’t feel like it stretched that far.

Between tax, pension and general living costs, I feel like a big chunk disappears before I get to enjoy it.

Do most people here actually track their true disposable income after everything, or just go by salary?

I tried properly mapping it out (take-home vs spending) and it was a bit eye-opening.

Curious how others approach it. Do you budget properly or just keep an eye on things loosely?

horsewithnoname

firstly you start with your net monthly income, then you need to deduct one twelfth of your annual bills - so add up everything, poll tax, utilities, loans, subscriptions, season tickets, insurance everything and deduct the monthly amount from your net salary. Then I would advise keeping a spending diary; literally write down every single thing you spend. Doing this for several months, preferably a year will give you an idea of how much you spend and on what. It’s quite informative!
obviously there are necessary things like food and toiletries, which you may be able to reduce and then there’s the spending on “stuff”; when I did let’s just say the large code chains profits took a hit!
I don’t need to keep a spending diary now, because I have definitely trimmed my spending and though I do spend money that is not necessary, I know how much I can and want to spend now.
I still keep a spreadsheet with income and outgoings, which keeps me on track and enables me to put money aside for annual bills.
Definitely worth doing!

eskbanker

https://forums.moneysavingexpert.com/discussion/6663802/best-way-to-work-out-what-you-have-left-each-month

Not sure it really matters what others do - there will be a wide range of financial circumstances, ranging from those really struggling to make ends meet to those who don't need to pay particularly close attention to spending, so the important thing is to choose a method that works for you.

As you've found, mapping actual spend against actual (take-home) income at a detailed level can be very illuminating, as many will find that they're underestimating spend on all the smaller things, even though they'd have a handle on the big-ticket stuff.

As might be expected, there are a wealth of articles and tools about budgeting on this site, in areas such as:

https://www.moneysavingexpert.com/family/

TonyMMM

Instead of worrying about what you have left at the end of the moth, adopt the "pay yourself first" system.

Work out your monthly budget and set an amount you want to save ( be ambitious, but realistic) and then you set up an automatic transfer for that amount into a savings account on the day you get paid. That reduces the temptation to spend that cash during the month - it made a massive difference to the way I approached budgeting years ago and rapidly built up a decent level of savings.

wmb194

https://forums.moneysavingexpert.com/discussion/6663802/best-way-to-work-out-what-you-have-left-each-month

Other personal finance databases are available but I use MS Money to keep track of everything.

https://www.garethjmsaunders.co.uk/2011/11/27/download-microsoft-money-2005-for-free/

Lazy_Panda

https://forums.moneysavingexpert.com/discussion/comment/81959525#Comment_81959525

Having a budget tracker is key especially as monthly salaries aren't stretching as far these days. I got a couple of recommends from colleagues on how to approach it. Interested to learn about the 50 / 30 / 20 rule on how to monitor monthly spend: needs (50%), wants (30%) eg subscriptions, dining, lifestyle and savings (20%). My wants were in the red and reflecting on these I do spend a lot on things for comfort and ease rather than necessity. Like you said, many underestimating spend on all the smaller things - the remedy being get it down on paper, or screen, and put some work into adapting lifestyle.

Lazy_Panda

https://forums.moneysavingexpert.com/discussion/comment/81959675#Comment_81959675

Thank you for the sign posting to the resources. Some worthwhile Sunday reading.

Lazy_Panda

https://forums.moneysavingexpert.com/discussion/comment/81959682#Comment_81959682

Appreciate the advice Tony. Sounds good to me.

Rob5342

I have a spreadsheet with all my bills on it and a weekly budget amount. I use Monzo pots to manage things dsy to day and have a bills pot and a pot for each week and then I use their budgeting tools to see where it all went. I treat savings like a bill and have a standing order to pay into my savings the day after I get paid.

Lazy_Panda

https://forums.moneysavingexpert.com/discussion/comment/81959722#Comment_81959722

Great, I'll check it out. Thank you for the recommendation.

GTR_King

My wages get paid to my Barclays account!

I then transfer £100 to savings each month ready for service charge bill (each July)

I then have all my bills go out of my club Lloyds current account which I transfer Said amount to it last day of the month & leave it till account is £0 (once all bills been paid)

I then transfer said amount to Halifax account for monthly food shopping!

What Ever’s left in my Barclays account after credit card has been paid is my spending money!

then once all my Bank statements have been produced (end of the month) I look at them to see what extra things I have spent my money on & where I can trim things down!

works for me!