Wow, it’s time already for my budget recap May 2019! Where has the time gone? I have learned so much this month!
This month I will be giving you my 5 budget takeaways. Headlines about the key things I have learned.
You might want to create a budget for the following reasons:
- to pay off debt
- to manage your household spending
- to save for a family holiday
- to build wealth
- to retire early
But why do you show your budget recaps Elly?
Seriously, you might be wondering this. I guess it’s because it’s great that people have budget ideas out there, but they just don’t provide real numbers on a real income. I only found a couple of people willing to do this and it helped me a lot, understanding the fundamentals of budgeting. Hopefully, me doing this, will help you shape your budget, and not be afraid to see it as a living document. It’s always changing and developing for me, as our priorities shift and as our financial goals adjust too. Hey, I bet you’ll spot things within my budget, that I could improve on, or when things change – my budget is very much a working document, that changes all the time!
I hope it will help you become able to see where you are spending money and what influences your financial decisions. For me, a lot of my money spending happens early morning, when I am just waking up. I know that if I take my time and make myself eat breakfast, I will not go out then and spend £4 at yes, you guessed it – Mc Donald’s or Greggs. For me, this is the spend that mounts up and this month, I have taken time to sit back and analyse the thought process I go through when I buy this breakfast, when I know I didn’t need to.
Progress to far to date
When I started budgeting with my budget binder, we originally had £15k debt and a house deposit of £12k to fund,s o £27k in debt.
Plus £7000 in student loans.
Now, with regular budgeting, and deciding to sell one of our rental houses, we have taken the debt total down to £116 and £2800 is left on my student loan. I’m so excited to make my final payment on the credit card next month!It’s not been an easy process,but I love my binder and it makes me feel accountable for where the money goes.
You will also spot, that I have a sofa loan, but it is £43 a month, and interest free, so at the minute, I am happy letting it tick away in the background.
1. Try new things but if they don’t work,bin them!
This is me after trying to use my air miles Credit Card as a debit card.
Me and Mr. Budget have an airmiles credit card, and we agreed that this month, we would use it to collect airmiles on the things we were already spending on. Fine – ok – that makes sense.
But at the end of the month, I was pulling my hair out!For me, my monthly budget,if I am tracking it correctly, shows me exactly how much money we have got left to spend in the month.
- The card has just switched handlers to Mastercard, and it was showing loads of pending payments.
- If I tried to pay back the balance, some of it was pending, leaving a balance behind.
- It was taking me 20 minutes each week, picking through the transactions!
Actions for June
Use cash envelopes and the debit card, because most transactions come out on the same day! Phew!
I analysed what we could have gained from the airmiles card, and we have already used the welcome bonus airmiles, to fund our holiday flights. I mentioned this to Mr Budget, that now we are not actually benefiting from this, so we agreed to close the card. Within 12-18 months, I would open one again, as a new customer, and cash in on some mega free airmiles again!
2. Don’t be afraid to change individual budgets month to month
My spending tracker has been super valuable this month, as it has shown me exactly what I was spending in each area.
I split my trackers into different budget groups and this made the overall analysis process quicker.
We spent more on the grocery budget than anticipated, and from my spending tracker, I can see that it was because we were more frugal! We wanted to buy at-home dinners, from the supermarket.
On the other hand, we were well within our eating out budget!
On my purchases from savings, I have noted down that we have spent on two holidays in the future – Mr Budget will replace the money in our savings account.
Actions for June
Adjust grocery budget for June to £250
Adjust eating out budget for June to £200
3. Save for treats in advance
Ok, so one confession I have is that I treated myself to having my hair done – thing is, I should have budgeted for it every month, but didn’t so it came out of savings. Now I have added it to my budget, so that it doesn’t get missed again.
Actions for June
Be accountable for even one off treats like this – save each month via a cash envelope, so the money is ready for when I fancy having it done again.
4. Always be aware of new or changing payments and adjust your budget.
This month has been full of new payments, two remortgages, so I’ve had to review the paperwork I’ve been sent, and when these payments are likely to start. One has caught me out, so here are June’s actions to avoid this.
UPDATE 5/6/19 – Phew – one mortgage provider actually refunded the extra payment into my account today, so nothing now to worry about!
Actions for June
- As soon as you get the paperwork, or email confirmation of your new payment, add it to your subscription tracker and date it.
- I check this subscription list every month, when I am doing my budget, so it would flag itself up then as a new payment.
- Cancel any old direct debits or standing orders.
5. Everyone’s budget is different
This is my main budget take away for the month. I will never judge anyone else’s budget because it is unique to them, their income, and their tastes. So what if you love buying handbags – if your budget balances and helps you achieve your goals, then it is working!
Goals achieved this month for us:
- £500 paid off the last credit card debt we have.
- £250 saved into pots for car maintenance, emergency fund, blog course, saving for an induction hob
- £50 cashback tracked through Topcashback and Quidco (I will receive this approx December – it will go towards overpaying our mortgage)
Actions for June
- Not to feel guilty for treating myself, as long as it’s within budget.
- Feel proud of my achievements, however small.
- Keep using cashback websites for whatever spending I can, to build up a fund for overpaying.
- Adapt my budget to accomodate two possible mortgage payments – we believe in remortgaging our house, and it has already saved us fortunes in interest!
- The most exciting one! Jump to starting Baby Step 6 (Dave Ramsey) – pay off the mortgage early. So we will be overpaying the mortgage every month. EEK! I know it’s geeky, but I’m really excited!