Do you work from a budget?

[chris]

Budget as in a monthly expenditure?

We don't, and it's something I'd really like to do. We tend to buy everything (literally, everything) on a credit card and pay it off at the end of the month. We do this for the reward points (clubcard points), which we've put to use for holidays in the past. It works well for us, as we'd be spending that much money anyway- so the holidays, or tickets for days out are in effect free.

My latest goal is to pay off our mortgage as soon as possible. I hate having it around my neck, it bugs me and keeps me awake at night whilst I think how I can tackle it to get rid of it. I want to pay it off so we can bank the money and then move somewhere further out, with more land - you know the usual pipe dream.

I'm pretty sure I can achieve this (paying off my mortgage before the term ends), but think I need to sort a budget out. For example, we'll pay bills in full when they come, rather than setting up a direct debit.. no idea why just always have done this. It's a bit of a shock when a £400+ bill lands on the doormat, I can tell you!

Do you work from a spreadsheet, use some software package, notepad + paper?

The steps I think I need to take are to get my utility bills on a fixed monthly direct debit (so I know exactly how much will be going out) - and change providers if it's not the cheapest. then I need to sit down and work out exactly how much we're spending a month, how much we have incoming and see what surplus funds we have, which we can redirect into over payments, or direct elsewhere.

How do you do it, if you do? Any good pointers? It's one of the reasons why I like to grow fruit and veg - if I can save money by growing my own produce, it'd be daft not to (as well as the other usual reasons)!

[Incy]

Before I was made redundant we used to pay everything bills wise by direct debit so that at the end of the month anything that was left just before my salary went in was moved to a savings account and we started the next month fresh. This worked really well for us and meant that we have been able to make sizeable lump sum payments off our mortgage. Sadly I've been out of work for a year now so we are not currently in a position to do this which means the last bit will have to wait a while longer.

[OverWyreGrower]

Everything is on a DD/SO. I can't afford to pay bills in big lump sums like £300-400 at a time.

We have a split current account - bills, spend and save....

When we get paid, a proportion of the money goes into the spend account and that's it for the month. The rest stays in the bills portion (boo!). Anything that is left over at the end of the month (Ha! As if!) is swept into the save portion.

I have a budget for petrol in a month, and I have up to £150 a month for food. The rest (which isn't much) is used for incidentals, such as birthday cards, small repairs etc. I make good use of comparison websites for everything (including shopping!)

MoneySavingExpert have a budgeting spreadsheet which is designed to tell you whether you are overspending etc, it's quite a good tool to use to track how much you're paying for stuff.

[Florence Fennel]

No budgeting here now Chris, but I'm a lot older than you and my children have their own families. As long as I don't run out of money before I run out of month, I'm happy. The mortgage and the bills are on DD and anything left over we can spend, either on luxuries for ourselves, or more usually we help our sons and daughter. You sound a determined young man, I'm sure your pipe dream will become a reality some time soon.

[Pies]

A friend of mine did something similar,he changed all his bills to monthly dd. Then set up another account,so he now has two accounts,he has all the dd taken from the new account into which he deposits enough to cover the total of the dd.This means when he looks at his bank statement for the first account this is how much spare money he has to spend

[zazen999]

When me and Mr Z started to live together I had credit cards to pay off and he had a few things so we worked out what the house cost, and opened a joint account and put a proportion into that account to cover house costs and any extras for hols.

Now we have a house and want to be mortgage free asap; we have got our 25 yr mortgage down to 14 years by overpaying for 4; and hopefully will be mortgage free in another 4. Our joint account still pays for everything house wise - and if we have a big spend we both put a proportion in to cover.

We have an Egg cashback card that is also joint, and get the max cashback on that each year. Plus we bought [for example] a car from the co-op for the £ at the end of the year which goes straight into my co-op bank account.

We research every large spend, and although we don't have a budget when either of us isn't working - we analyse every food penny we spend and get very old style about our food costs. We do menu plan though - so in a way we sort of do.

We did set up a spreadsheet at the start to make sure that we could afford the maximum payoffs for credit cards etc; as mine had funded my degree and had taken a bashing - and I have a spreadsheet which calculates the exact day we will be mortgage free - going on our current mortgage. We come to the end of the deal next April so that will change then - hopefully to a nearer date and not a longer one.

[Two_Sheds]

We came off a fixed rate onto a variable rate for our mortgage, last year. This resulted in a saving of £200 a month, but instead of spending that on rubbish, we've upped the repayment to what it was before. We're due to knock 9 years off the mortgage (MSE has a calculator for mortgage overpayments)

[OverWyreGrower]

BTW, we're budgeting to pay off non-mortgage debt.... we're in our dream house already, so I don't really care about having a HUGE mortgage....

[ginger ninger]

I've always worked/shopped to a tight budget even when I was on a very good salary, but being made redundant has made it hard. Only having a small amount to work with means holidays and treats are out of the question until I get back into work. The mortgage is on a variable but the OH pays that. I save all my receipts so I can see where the money has gone and I've learnt to spot a bargain a mile off

[Chitfaced]

One tip I have is that even when you've worked out your monthly expenditure (or even better, before you do so), collect up all the receipts of things you buy throughout the month. Just put them all in one box at the end of the day or the week and then you'll see the reality of how much unnecessary stuff you buy every month.

It's always a good exercise to do and never fails to surprise me even when I think I've been frugal.

I agree with the others, it's great to do bills by DD/SO (well, as great as paying bills can get...)

[FROSTYFRECKLE]

Mr Frosty and I set up our budget the good old fashioned way - paper and pen. We pay everything DD or SO (my biggest bug bear was paying £100+ every month on the Council Tax - it doesn't stick in the gullet so much by paying it weekly SO). We are fortunate to be able to save - straight into savings account or premium bonds, which is just as well as over the past year the savings have taken a hammering. We are now evaluating our options. We try and find bargains as much as poss (just bought flanalette sheets and pillow slips with 20% off - to get ready for winter). No frittering of money.

[bobleponge]

I am officially rubbish with money. I have a friend who is an accountant, and a few years ago I was in proper bad order financially. I went to see her, with all my fiscal woes, and she set me up a very simple budget thingy on an Excel spreadsheet, with simple forecasts and easy for me to work out targets etc.
For me it really helped, and am now, thanks to a few factors but the spreadsheet being a real major one, much better in the cash stakes. I have paid off 2 large chunks against the mortgage in the last 7 months, and will do another one as well before the end of the year. Should be mortgage free in a couple of years or so I hope. (Sadly the concept of overpaying ones mortgage on a monthly basis doesnt seem to exist here in the land of the rising Frog).

[its hilly]

We budget like stink due to both being self-employed, and having very low incomes for the last 3/4 years.
Try your banks website for advice. A lot of them do have some good fiancial help sections, complete with budget sheets you can download. Or CAB have them.
Dont forget to allow for stuff you only do once in a blue, like a garage bill. Or dental visits. They tend to get forgotten.
I used a simple spreadsheet with two columns for in and out. You'd be able to work out the formula dead easy. Just sat down at the start of each week to see what was there, and what wasn't. There was alot more wasn't than was.

[pipscariad]

We budget every month, and pay all bills that we can by DD/SO. About 5 years ago we started a budget book, with sections for all our outgoings, and note them down so we can see where the money is going. All done by paper and pen! We also note down absolutely everything we spend, even the odd few pence, in a book too, as although we were being careful with money we wanted to see where and what we were spending it on. Although this is a bit of a pain (although we've got into the habit of it now - of course we do forget the odd thing here and there..), it is also an eye opener,and worth doing if only for a little while, just out of interest.

Keeping the budget books is an enormous help, as without them I'd worry sick that we were spending more than we had coming in (we have cut corners wherever possible, and save every penny that we can. OH's job is less secure than we had hoped, although not desperately, but we need to have a 'cushion' just in case). Like you Chris we buy everything possible on our credit card to get our clubcard points, and use these for treats. We pay it off in full every month without fail. We're going to start overpaying on the mortgage in a few months when a couple of regular savers we have come to an end.

I'm terrible about worrying about money (or lack of it!), but seeing exactly where it's going helps enormously and I can't recommend it highly enough. Thankfully, although we live to a very tight budget, we have no debts apart from the mortgage, which we are slowly chipping away at. We can't afford to go on holiday (much to the children's chagrin!), but then hey, we are lucky enough to live somewhere where loads of people come on holiday to, so we holiday at home! (In fact, the house next door (identical to ours) is a holiday cottage, and so we pretend ours is too!)

Btw, budgeting becomes even more important once your children become bigger, as they get more expensive - my two lads now eat as much as OH and I, and have recently reached the size where they no longer fit into childrens sized clothes, men's are more expensive! (And they're only 13...) DD eats like a sparrow, bless her, but has expensive interests like dancing, gym and music lessons.... But I wouldn't be without them for a moment!

Yikes, didn't mean to write War & Peace there, sorry Chris

[jojo2910]

We are on a budget and have been for a while, but it is very useful now that we are paid weekly. I make a list of necessary expenditure each month - rent, bills, food allowance etc, and when their DD comes out. I then factor in some contingency. This lets me see how much we have and when.

We realised recently how much we were spending on little things - a pound here and there - but how much it all adds up. So now we are having a competition. We get a set budget for luxuries and treats (plants or seeds in my case) and it has to come out of our own budget. As there is a spreadsheet showing this, you can see where the money goes.

We are saving hard for a house deposit, which we are hoping will come next year. But we'll keep up the budget for a good while yet so we can knock money off the mortgage and get the years down.