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    • katie4
    • By katie4 10th Jul 18, 9:09 AM
    • 145Posts
    • 43Thanks
    katie4
    Budgeting help
    • #1
    • 10th Jul 18, 9:09 AM
    Budgeting help 10th Jul 18 at 9:09 AM
    Hi
    I have never really budgeted before apart from moving money into my bills account when I get paid every month, the rest of my money just stays in my account for my everyday spending; food shop, petrol etc


    I am just looking for what other people do to budget their money for the month, I have heard of keeping it in separate categorized envelopes for example, or using cash only. I find it too easy to spend unnecessarily using my card


    thanks

Page 1
    • getmore4less
    • By getmore4less 10th Jul 18, 10:14 AM
    • 32,397 Posts
    • 19,465 Thanks
    getmore4less
    • #2
    • 10th Jul 18, 10:14 AM
    • #2
    • 10th Jul 18, 10:14 AM
    Why not start with the idea you want to do proper budgeting and work back to implementing something that makes that work for you.

    Budget==plan.

    What you need to do is plan in advance where you want to allocate your money.
    This needs to be longer term than a month, a year is the minimum for most people and that should also include longer term stuff that will need saving for.

    Make a list of everything you want to include (categories) and save for longer term. if you think you may miss things you need a catch all(emergencies/forgot) catargory


    Add up all the income for the year and start to allocate it to all the things you will be needing during the year then start adding in the wants till the money runs out, keep adjusting till the numbers balance.

    many use the SOA format which does annual/12 the advantage of using a full years spends it normalizes* the totals for the year.

    once you know where you need/want to spend the money, then all you need to do is track you are on plan and manage the cash flow to make sure the spends happen when you have the cash.

    The trick is to only spend(keep a diary) on planned stuff and avoid the impulse buys, if you think you need/want something think about how the plan needs adjusting if it is not in the plan.

    you can go into detailed sub categories splitting need and want/nice to have.

    Take food, you can have a need budget the amount you need to spend to live OK, then have on top a treats budget, you can use that to buy really nice stuff or have a take away on top of the need to spend.

    Clothes, look at the wardrobe and you can work out what will need adding over the next year, knickers, pair of work shoes, then along side that you can have an extra amount for the wants stuff.

    by splitting needs from wants you can start to make value choices for the want money rather than spend when you want something and then have nothing when you want the next thing.

    Make a priority list for wants.

    If you are not sure start with the last 12 months and try to work out where all you money went, often the first time people do this they have a significant amount of their income where they have no idea where it went.


    it is all about the plan that prioritises where you want to allocate the money you have that makes budget successful in gaining control over the finances.
    • K80 Black
    • By K80 Black 10th Jul 18, 10:37 AM
    • 54 Posts
    • 187 Thanks
    K80 Black
    • #3
    • 10th Jul 18, 10:37 AM
    • #3
    • 10th Jul 18, 10:37 AM
    I have a spreadsheet where I detail all my spending - categories for things like food, booze, entertainment, transport, clothes, gas, electricity... you name it, if I spend money on something that's not currently a category, it becomes one.

    It has monthly totals for each category, and weekly totals for everything. This way I can easily see if I have a 'splurge week' where I spend too much and have to cut down, or if there's something in particular I'm spending too much money on.

    I'll admit I've only been using it for 2 weeks, and it is a bit of effort. The results are already paying off though - after seeing how much I spent stocking up on beers and wine at the start of the month, I've not been tempted to nip to the offie for some cider or something like I usually would. I've discovered I spend more on my food shop than I think, due to my habit of popping to the corner shop for top-ups, and far less on entertainment and other 'stuff' than I thought!

    This is more of an 'anti-budget' since I'm just documenting, not actually planning as such - but it might be a good place to start for a few months to see what you actually spend vs what you think you spend.
    • getmore4less
    • By getmore4less 10th Jul 18, 10:53 AM
    • 32,397 Posts
    • 19,465 Thanks
    getmore4less
    • #4
    • 10th Jul 18, 10:53 AM
    • #4
    • 10th Jul 18, 10:53 AM

    This is more of an 'anti-budget' since I'm just documenting, not actually planning as such - but it might be a good place to start for a few months to see what you actually spend vs what you think you spend.
    Originally posted by K80 Black
    good points

    As I said the key is the plan but as you say that has to be based on reality and that comes from iterations of real spending.

    A look back at the previous 12 months can kick start the process but a spending diary tracking is critical to a plan succeeding going forward

    What many people find is the biggest side effect of a spending diary is they think more about each spend and without realising spend less anyway.

    Another essential part of the process is the value for money.

    This can be as simple as reducing food waste.
    Using stuff you already have more often like clothes.
    Reviewing the regular outgoings to make sure you are using them fully.
    bulk buys


    One thing on the saving side is motivation, very good idea to have goals for the savings, so they have a priority/value against the other things the money could get spent on.

    good shorter term one is holiday, every time you pass on the coffee that's another few in the holiday fund. longer term might be get a house or get rid of the mortgage once you have a house.
    • enthusiasticsaver
    • By enthusiasticsaver 10th Jul 18, 11:10 AM
    • 6,684 Posts
    • 14,183 Thanks
    enthusiasticsaver
    • #5
    • 10th Jul 18, 11:10 AM
    • #5
    • 10th Jul 18, 11:10 AM
    I like to keep budgets simple. I record spends on clear checkbook and a spreadsheet but use a few basic budgeting rules to check we are not overspending. We are now early retired so we do not tend to save long term now as we are on our drawdown phase.

    We have several savings/current accounts which we put a certain amount in each month after we receive our pensions, investment income.


    Our main account has enough left in there to cover monthly and annual bills and a considerable buffer as the account pays interest. This is also our emergency fund and roughly stays at the same amount throughout the year. We pay our credit off in full each month which covers food and fuel spends. We leave enough in cash in there to cover entertainment and gift spends for the month.


    We each have a personal account which we pay a monthly amount into to cover our personal hobbies, a holiday account and a car and house maintenance/improvement/replacement account. Our retirement buffer is spread over internet saver with Tesco and investments.


    The spreadsheet shows our net wealth position so we can see if we are overspending over a period of a few months although we tend to worry about it on an annual basis now so if we overspend one year we cut back the following year and delay home improvements/car replacement/large holidays.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • venomx
    • By venomx 10th Jul 18, 1:39 PM
    • 125 Posts
    • 16 Thanks
    venomx
    • #6
    • 10th Jul 18, 1:39 PM
    • #6
    • 10th Jul 18, 1:39 PM
    I use a bank called " Monzo "
    It has an app which shows you exactly how much spent on groceries/bills/shopping etc

    Last edited by venomx; 10-07-2018 at 1:44 PM.
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