# How to manage tight budget



## terrysgirl33 (25 Feb 2015)

*Age: *45
*Spouse’s/Partner's age: *48* 

Annual gross income from employment or profession: *65,000* 
Annual gross income of spouse: *0
*Other income:   *4,150 (Rent a Room)
    4,860 (child benefit)
*
Monthly take-home pay:* approx. 3,000
*
Type of employment:* public sector
* 
In general are you:*(a) spending more than you earn, or
                                (b) saving
*                                (c) spending what we earn √

Rough estimate of value of home: *300,000
* Amount outstanding on your mortgage:* 62,000
* What interest rate are you paying? *Approx. 1.65%
* 
Other borrowings – car loans/personal loans etc: *none
* 
Do you pay off your full credit card balance each month? *yes
* If not, what is the balance on your credit card? 

Savings and investments: *About 2,000 in savings.
* 
Do you have a pension scheme? *Yes
* 
Do you own any investment or other property? *No
* 
Ages of children: *7, 9 and 11
* 

What specific question do you have or what issues are of concern to you?*
For years we seemed to be managing fine, enough money to pay bills and put some away.  At the moment we have no real savings, just enough to pay a higher than usual credit card bill or car insurance.  Our car is 12 years old and we have no savings to replace it, or to do anything around the house and other normal expenses that come up from time to time.  I need advice on how to manage money and get a grip on our budget again.  As the kids are getting bigger, managing money is getting more and more complicated as there are more and more things to pay!

In general we are very very lucky to have a steady income and no debt, but it has become a struggle to keep it like that, and I'm not exactly sure why.


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## RichInSpirit (25 Feb 2015)

I'm very tight financially. I was trying the write everything down approach last year but got a bit bogged down with it. 
I have a rough budget framework from the insolvency service plus my repayments. 
Going to try a "countdown budget " weekly where I have amounts allocated in each category to try and arrive at a balanced budget. Not sure how it will go yet.


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## Delboy (25 Feb 2015)

65k Gross with Married Tax Credits = 3.9k take home?Are you paying into a Pension or something like that?
+ €750 per month into your hand for CA and RaR.
So thats €4.6k cash coming in per month by my calcs

How many years left on the mortgage..say 15? = €400 per month. So possibly very low outgoings there.

Not sure from the info provided how your struggling!


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## terrysgirl33 (25 Feb 2015)

Delboy said:


> 65k Gross with Married Tax Credits = 3.9k take home?Are you paying into a Pension or something like that?
> + €750 per month into your hand for CA and RaR.
> So thats €4.6k cash coming in per month by my calcs
> 
> ...




Thanks for the reply Delboy.

The figures here are approximate, I don't have all of the numbers to hand.  On looking at it again, I get approx. 3450 a month.  I added back in the health insurance which is taken out before I get it, there are also deductions for pension, USC, union etc.  I actually get paid a fortnight, so this is the (fortnightly pay X 26 / 12) for the monthly amount.  Mortgage is approx. 975 a month, there is only 5 years left and I'd like to get that finished!  It's on a good tracker rate too.

We probably need to track where the spending is going.  I think a lot is going on medical expenses, but we need to track that.  This is money for 5 people to live on.

On paper it looks good, but the money isn't there at the end of the month.


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## terrysgirl33 (25 Feb 2015)

RichInSpirit said:


> I'm very tight financially. I was trying the write everything down approach last year but got a bit bogged down with it.
> I have a rough budget framework from the insolvency service plus my repayments.
> Going to try a "countdown budget " weekly where I have amounts allocated in each category to try and arrive at a balanced budget. Not sure how it will go yet.



This sounds like a good idea, but my problem is with two adults and three children, it's hard to track.  It could be done if everyone agrees, time for a talk!


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## Monbretia (25 Feb 2015)

Spending diary, spending diary, spending diary!  Only way to go to see where the money is going, quickly becomes a habit, every time you buy something these days you are handed a receipt.  Don't throw the away, shove them somewhere wallet/bag/drawer, anywhere but write them in daily to something, either an online system or bog standard diary or notebook.  All annual/monthly expenses will be on bank account so tot up yearly spend on things like insurance/car tax/electricity/phones etc.  

The spending diary will show you where the day to day cash goes, log everything and every evening sit down with your cup of tea and tot them up.   

I like to take a fixed amount out of the ATM once weekly, taking out multiple withdrawals weekly makes it hard to track where it is going.  Keep all your petrol receipts or pay with debit card so you have a record.   I always fill the car, just simpler, sometimes it lasts weeks other times it is gone in days but I record all spending on everything.

It's a habit and well worth developing, get the children involved too, it's a life skill that they need to learn too.


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## michaelm (25 Feb 2015)

Delboy said:


> 65k Gross with Married Tax Credits = 3.9k take home?Are you paying into a Pension or something like that?


Yeah that take home figure looks low even allowing for pension & pension related deduction.  Are you paying AVCs or perchance not claiming all tax credits or not benefiting from an increased SRCOP?





terrysgirl33 said:


> I need advice on how to manage money and get a grip on our budget again.


I use a one A4 page spreadsheet to track my numbers (not a spending diary though).  I always know my a/c balance and that is broken up into virtual money pots covering food, fuel, utilities, yearly, etc.  When I get paid set amounts are use to notionally top up each pot.  Also, I do a yearly budget where I estimate all expenses (insurances, taxes, holidays, schools, clothes, Christmas, birthdays, sundry), this total figure divided by 12 determines how much needs to go into my 'yearly' pot every month . . so I never have to worry that a insurance premium or other bill is creeping up on me.  All spending must come out of one pot or another.


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## 44brendan (25 Feb 2015)

terrysgirl33 said:


> This sounds like a good idea, but my problem is with two adults and three children, it's hard to track. It could be done if everyone agrees, time for a talk!


Don't just track "BUDGET". Use a simple spreadsheet (plenty available online) and calculate exact spend for everything. Firstly do this on an annual basis and measure it against income. cash-spends are most difficult to track so avoid them where possible. I.e. treat the family income/outgoings as a business and ensure that casual spends are strictly kept within an agreed amount. Withdraw cash in 1 amount each week and keep the weekly cash/casual spend within this amount. Unless you have a budget and monitor it against actual spend you are wasting your time trying to control expenditure.
I gave a number of courses in expenditure control for small businesses and a family is similar to a small business. Look at your historical ATM withdrawals and add up amount spent each month on unbudgeted items! You will find it difficult to account for how so much money was wasted!


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## terrysgirl33 (25 Feb 2015)

Monbretia said:


> Spending diary, spending diary, spending diary!



This is a good idea, I just have to do it!


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## Monbretia (25 Feb 2015)

It just becomes habit, I like the basic paper diary system and I have 30 yrs worth of them in the wardrobe!  Don't know what I will ever need them for but can't bear to dump them


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## Gerry Canning (25 Feb 2015)

Terrysgirl.

1. Spending diary seems a great idea, you will then know where the money goes and can look at things like.

a. Food , do you shop in bits or do you do a full shop.
Do you use branded goods or not.
b.Tv/Internet. Have you Sky or something similar,do you really need it?
c.Medical expenses, have you claimed tax relief?
d.Health Insurance , can you go lower eg 4bed rooms rather than private?
e.Pension. Have you any Additional Voluntary Contributions (AVC,s) if so maybe cancel them, but take advice before doing anything.
f. Ordinary Insurance. Have a good look at it ,probably due a review and might have savings there.

Given the drop in incomes , increase in Taxes etc , you have done well to get this far.


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## Delboy (25 Feb 2015)

terrysgirl33 said:


> This sounds like a good idea, but my problem is with two adults and three children, it's hard to track.  It could be done if everyone agrees, time for a talk!


I keep a spreadsheet of all spend (mine at least) for the month, and we have a shared Credit Card on which all day to day spending goes (we pay it in full every month and as it's with Tesco, we get clubcard points which = to a free Ferry to France this year from 2 years worth of points!).

So if you use a credit card and track all ATM movements on the bank a/c's, you should be able to pin down where the spend is going. 
We don't necessarily make cut backs in some areas based on our spend analysis, but it's a good way of tracking everything.

But it'll come down to the basics such as how many Supermarket trips per week (e.g. how much meal planning is going on, are you keeping in mind deals such as Aldi super 6 or Lidl's weekly specials ...some great deals there this week on Fish and Meatballs for example !!!. Supervalu have Salmon at 10.99 per Kg, finishing today, and I bought a heap of that this week for the freezer!).

With your take home pay from work + other cash coming in, you shouldn't be in any trouble. Yeah mortgage is high for such a small amount owing...but best to get that paid off before the kids get to College age!


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## terrysgirl33 (25 Feb 2015)

Quick answers, we do two supermarket shops a week as there isn't enough freezer space to fit more in.  Shop mainly in Aldi, some in Lidl/Supervalue.  Don't cook from scratch as much as we should, I don't get home from work until 7 and DH isn't able to do much at the moment.  Where a substitute is acceptable we eat non-branded stuff.

We have UPC for broadband and home phone.

Yes, we claim back medical expenses every year.

Health insurance, I think we're on a fairly low level plan.

Pension, no ACVs, or extras.

Insurance, generally I think they are fairly good value.

Much shopping, fuel etc. is done on the credit card, must look over that.

Thanks for all the food for thought.  I will have to root out bills and receipts, and talk to the people involved, in order to do anything else, but this is a good round up of ideas.  Most of this we know already, but for various reasons some of it slips .


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## michaelm (25 Feb 2015)

terrysgirl33 said:


> Quick answers, we do two supermarket shops a week as there isn't enough freezer space to fit more in. Shop mainly in Aldi, some in Lidl/Supervalue.


We have a monthly amount budgeted for food/household spend but we break that down to a weekly figure which we reduce (on our shopping list whiteboard) whenever such expenditure goes on a card or if we withdraw cash for same.





terrysgirl33 said:


> Much shopping, fuel etc. is done on the credit card, must look over that.


We put nearly everything on the credit card (on the spreadsheet I reduce the relevant money pot and increase the credit card pot).  It sounds a bit contrived as I type it but it has worked well for us over many years.


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## terrysgirl33 (25 Feb 2015)

Just to add, we have done well over the years by being very very careful.  But for whatever reason, due to circumstances changing or due to being too busy with other things to pay attention, things have started to slip.


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## terrysgirl33 (25 Feb 2015)

michaelm said:


> We have a monthly amount budgeted for food/household spend but we break that down to a weekly figure which we reduce (on our shopping list whiteboard) whenever such expenditure goes on a card or if we withdraw cash for same.We put nearly everything on the credit card (on the spreadsheet I reduce the relevant money pot and increase the credit card pot).  It sounds a bit contrived as I type it but it has worked well for us over many years.



We do something similar, much of our regular shopping goes on the CC.


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## PTSBCase (25 Feb 2015)

Maybe check out money advice & budgeting service - mabs.ie
While this service helps people who are in debt it also provides a service whereby they can help with budgeting & prevent you from getting into debt. Check out their website. There are online budgeting tools and also details how to get in touch to avail of their services. Good luck!


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## Joe90 (25 Feb 2015)

I downloaded a free family budgeting spreadsheet from this website at the beginning of the year, and it is excellent.  I edited the categories to suit our own outgoings, and have a handle on everything that comes in and goes out each month. Makes for interesting reading each month, allows me to estimate future spend, and carries data over each month ...

http://www.spreadsheet123.com/ExcelTemplates/budgets.html


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## Protocol (25 Feb 2015)

As a comparison, I earn approx 8k less, but save 1k per month, just about.

I support a SAHM + 2 kids + mortgage + car.


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## Bronte (26 Feb 2015)

terrysgirl33 said:


> This sounds like a good idea, but my problem is with two adults and three children, it's hard to track.  It could be done if everyone agrees, time for a talk!


 
This I don't get, two adults one income and three kids under 12 - what has it got to do with talking to anyone other than the parents?

So far on this thread you have not managed to confirm your actual salary, into your hand.  That would be a good starting point.  How about you fill out the money *makeover template* and you will be amazed at where savings can be made, another poster has already mentioned they are saving 1K a month more than you on a lessor salary.

Are you claiming back your medical expenses?

It is *imperative* that you save for a car.


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## Bronte (26 Feb 2015)

michaelm said:


> or not benefiting from an increased SRCOP?I .


 
What's this? 

I like your weekly and annual 'pots' etc.  Good planning is key.


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## vandriver (26 Feb 2015)

Standard rate cut off point


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## Mrs Vimes (26 Feb 2015)

I have children of a similar age who hear the word "no" a lot - it can be hard to say but I think I'm doing them a favour in the long run by not forking out for everything that takes their fancy. I know how quickly it all adds up - even a coffee break if we are in town costs a fortune when there are 5 of you.

I suspect that this is where a lot of your money is evaporating - little things like the cinema or coffee or pocket money, as well as bigger things like swimming lessons.

If your children are able to help with the budgeting then let them eg choose whether to go to the cinema or save for a bigger outing at a later date.


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## grenzgebiet (26 Feb 2015)

Sometimes it's easier to do a physical control instead of just paper exercises.

For example:
(1) Go out and buy a selection of small purses/wallets
(2) decide how much you want to spend on say Household per month - say €500
Put €500 in this wallet. Use this and ONLY this wallet when you shop at Lidl, Aldi for food, washing powder, toothpaste or whatever.   If it's empty before month end - tough.

(3) decide how much you want to spend on Pocket Money or Discretionary Spending for yourself - say €300.
Put €300 in Wallet No 2. Use this wallet ONLY when you buy personnel stuff - coffee, newspaper, new T-Shirt, glass of wine etc.   If it's empty before month's end - tough.

(4)  decide on other spending categories and repeat (1) to (3)

Things will soon start to make sense.


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## trasneoir (27 Feb 2015)

Monbretia said:


> Spending diary, spending diary, spending diary!


Do it. I started using a simple "envelope" budget nearly 2 years ago. The effect has been equivalent to a 10k raise. I went from living month-to-month to an average surplus of €435 _without any conscious sacrifice._

I swear by youneedabudget.com . I record purchases on the phone app, and it syncs them back to my budget. I never had the discipline to keep a notebook handy, but I'm rarely out without the phone!

(It's actually €435.04. The software remembers_._)


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## terrysgirl33 (4 Mar 2015)

Bronte said:


> This I don't get, two adults one income and three kids under 12 - what has it got to do with talking to anyone other than the parents?
> 
> So far on this thread you have not managed to confirm your actual salary, into your hand. That would be a good starting point. How about you fill out the money *makeover template* and you will be amazed at where savings can be made, another poster has already mentioned they are saving 1K a month more than you on a lessor salary.
> 
> ...



I agree, it is the realisation that the car is 12 years old this year that has made me realise that something needs to change.  The first post was done using the makeover template!

Actual salary: I have two figures for this on my P60, the salary for PAYE purposes, and the salary for USC purposes, do you know which is the 'real' one?  AFAIK the one for PAYE purposes is the gross salary with the pension contributions removed as these aren't taxable.

The point about the two adults and three kids under 12 is that with that many people things come up unexpectedly.  Last week two people had to go to the GP, and two people ended up in two different hospitals.  I think it ended up costing about €120 in GP fees, parking, tolls (the two hospitals were Blanchardstown and Tallaght).  This isn't resolved yet, DH is in hospital, so that's why I haven't replied before now.



Protocol said:


> As a comparison, I earn approx 8k less, but save 1k per month, just about.
> 
> I support a SAHM + 2 kids + mortgage + car.



That really is very good, want to tell me how you do it?  No snark is intended, we really need to do something and any advice on how to do it is welcome!



Mrs Vimes said:


> I have children of a similar age who hear the word "no" a lot - it can be hard to say but I think I'm doing them a favour in the long run by not forking out for everything that takes their fancy. I know how quickly it all adds up - even a coffee break if we are in town costs a fortune when there are 5 of you.
> 
> I suspect that this is where a lot of your money is evaporating - little things like the cinema or coffee or pocket money, as well as bigger things like swimming lessons.
> 
> If your children are able to help with the budgeting then let them eg choose whether to go to the cinema or save for a bigger outing at a later date.



I'm afraid my kids hear 'no' a lot too!  I'm trying to strike a balance between giving them the things I think will benefit them (swimming lessons, music, sports of some sort) and things they don't really need.  One of the kids has had problems with bullying, which has manifested itself in exclusion from things like birthday parties, so I am reluctant to cut those out altogether.  As well, DH has been ill quite a bit and they have been very good at doing things around the house and helping, so it seems wrong to punish them for that.



trasneoir said:


> Do it. I started using a simple "envelope" budget nearly 2 years ago. The effect has been equivalent to a 10k raise. I went from living month-to-month to an average surplus of €435 _without any conscious sacrifice._
> 
> I swear by youneedabudget.com . I record purchases on the phone app, and it syncs them back to my budget. I never had the discipline to keep a notebook handy, but I'm rarely out without the phone!
> 
> (It's actually €435.04. The software remembers_._)



I have seen this recommended before.  With 5 people involved it sounds like a good idea, I used to be able to keep a rough balance in my head when it was just me!  I don't have a smart phone however, but I need a new phone.

Any advice is welcome, but I won't be able to do much until DH is out of hospital.  I don't know how single parents manage, it's rather busy!


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## michaelm (4 Mar 2015)

Generally you can ascertain your net pay from your P60. Use Pay(A) less Tax(B), USC(E) and Employee PRSI.  If your weekly net income is less than €703 you should qualify for Family Income Supplement of at least €20 per week (your rent-a-room income may scupper this, I'm not sure).  Your mortgage payment and travel to work expenses may enable you to qualify for a GP Visit Card.


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