Life Laundry and making a workable budget PART FOUR
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  1. #1
    Registered User Englishlady's Avatar
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    Default Life Laundry and making a workable budget PART FOUR

     
    <P style="MARGIN-BOTTOM: 0cm">I know that opinions vary about the best way to budget, some people think it's best to just have a general EF to cover ad hoc or surprise out of pocket expenses, that's fine for some.
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm">In our house I like to know exactly what amount of money I have for each category.
    <P style="MARGIN-BOTTOM: 0cm">I go for the “drip-drip” effect, the slow methodical way.
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm">In our house we have two categories: fixed expenditure and flexible expenditure.
    <P style="MARGIN-BOTTOM: 0cm">Fixed expenses would be things such as Mortgage/various insurances./Council tax ( like property tax) utilities etc.
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm">Flexible expenditure would be food money/holiday fund/personal pocket money/clothing fund etc.
    <P style="MARGIN-BOTTOM: 0cm">It makes for a long list, but it means that I can “see at a glance” where we are, with each area we are saving for, without having to “work out” if I can afford a holiday next year or new carpet in 6 months.
    <P style="MARGIN-BOTTOM: 0cm">I do break it down more than most, but it suits us and our way of life.
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm">The most helpful thing I think, is to fix the budget, based on the permanent income in the household, for example base it on dh's income if you have a temporary job/are on a short term contract/ are in any danger of not having your income in the short to medium term future.
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm">Why? Because this way you will get used to working a budget on less money which, gives greater potential to save.
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm">I shall now give an example of how I would work MY budget, using a fictional amount of money just so that you get the idea of how I work it.
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm">The amounts don't really need to do an “exchange rate” into $( either US or Canadian) or Euro's because the basis and formula is the same.
    <P style="MARGIN-BOTTOM: 0cm">All figures are per month:
    <P style="MARGIN-BOTTOM: 0cm"><B>Permanent Income 2,500</B>
    <P style="MARGIN-BOTTOM: 0cm"><B>Temporary Income 250</B>
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm">Mortgage 400
    <P style="MARGIN-BOTTOM: 0cm">House insurance (buildings&amp; contents) 75
    <P style="MARGIN-BOTTOM: 0cm">Council Tax( like property tax) 110
    <P style="MARGIN-BOTTOM: 0cm">Utilities:
    <P style="MARGIN-BOTTOM: 0cm">Gas Heating 55
    <P style="MARGIN-BOTTOM: 0cm">Electric 55
    <P style="MARGIN-BOTTOM: 0cm">Water rates 25
    <P style="MARGIN-BOTTOM: 0cm">Phone 25
    <P style="MARGIN-BOTTOM: 0cm">Car payments(* or savings) 200
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm"><B>Total Fixed outgoings 954</B>
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm">Flexible Outgoings:
    <P style="MARGIN-BOTTOM: 0cm">Car(gas/petrol/insurance/road fund tax etc.) 150
    <P style="MARGIN-BOTTOM: 0cm">His &amp; hers Personal pocket money (50 each)100
    <P style="MARGIN-BOTTOM: 0cm">Food Budget 300
    <P style="MARGIN-BOTTOM: 0cm">Holiday Fund 200
    <P style="MARGIN-BOTTOM: 0cm">Clothing Fund 50
    <P style="MARGIN-BOTTOM: 0cm">Home Improvement Fund 200
    <P style="MARGIN-BOTTOM: 0cm">Christmas and year round gift fund 50
    <P style="MARGIN-BOTTOM: 0cm">Self funding for Dental treatment/Specs etc. 50
    <P style="MARGIN-BOTTOM: 0cm">Savings ( Do-it-yourself Pension Fund/Life savings 300
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm"><B>Total Flexible outgoings 1400</B>
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm"><B>Total Fixed outgoings 945</B>
    <P style="MARGIN-BOTTOM: 0cm"><B>Total Flexible outgoings 1400</B>
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm"><B>Grand Total 2345 </B>
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm">Leaves 155 for Contingency Fund ( another category?!)
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm">Leaves “Temporary” income of 250
    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm">This can be used of more savings/CC or any other debt.

  2. #2
    Registered User Englishlady's Avatar
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    Notes:

    <P style="MARGIN-BOTTOM: 0cm">Car Payments, we have always tried to not pay interest on car loans and sadly sometimes things are out of our control, like when our car was smashed beyond repair, just as my fledgling car savings were only just up and running!

    <P style="MARGIN-BOTTOM: 0cm">We had to pay 250 a month to “buy” another car (despite getting the insurance from the old one!)

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">So, as we adjusted to paying that amount and re-worked the budget, then I decided that from then on when the car was finally paid for, we would carry on “paying” that 250 but to OURSELVES in an interest bearing account.

    <P style="MARGIN-BOTTOM: 0cm">Touch wood, because we buy cheap “non brand” car (one that just does the job!) we have bought our last 2 cars CASH!

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">Clothing fund: just because I have a certain amount doesn't mean that we SPEND it! <SPAN style="FONT-STYLE: normal">I</SPAN>t is Rolled over and put aside until needed.

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">If you are working a hard line with your budget it is important to have some “carrots”, something to keep you going when you are fed up of cutting down.

    <P style="MARGIN-BOTTOM: 0cm">Ours is our trips away, our holidays keep us sane and don't cost much.

    <P style="MARGIN-BOTTOM: 0cm">The price of the cottage/house rental for the week, plus extra petrol/gas.

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">We use our regular food budget to pay for our holiday food (well we would have to eat at home right?!)and if we do eat out (not easy for Vegans in the UK!) then I use the money I have saved in my change jar, often there is 100 or more by the time we go away!

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">If you have children and have to go away in the school holidays never UNDER estimate what that will cost! Holidays at peak times are always more expensive and kids just wouldn't be happy without doing some activity that involved spending, so remember that the savings are from now.. until you go away...... and once kids get the taste for a holiday it's hard to stop them wanting to go again, so try and think of stuff that doesn't cost much, like camping etc.

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">Personal pocket money:

    <P style="MARGIN-BOTTOM: 0cm">This is a life saver, more so if you and dh are not on the same fiscal page!! Once you have a little of your own money to play with,it is yours to do with what you will, this can save a lot of arguments, if dh isn't as frugal as you and also stops you feeling resentful if you”give up” your money to make ends meet!

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">Children's Pocket Money:

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">I don't have kids but I learnt from a very early age the value of money by earning it baby sitting at age 12 or 13 and then working a Saturday job from age 14.

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">It may interest some of you to know that, whilst I did the above and am pretty fiscally savvy, my sister who had the same childhood, but chose NOT to work until she HAD to, is one of those irritating people who keep no check on their money, have strange priorities and she hates any one who has even a penny more than she does!..............in other words she wants what I HAVE, but doesn't want to have to do ANYTHING to get it! ( Yep, there are a lot of 'em about ~sadly).

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">Cash is best!

    <P style="MARGIN-BOTTOM: 0cm">Unless you have a will of iron or are the most organized person on earth, it is HARD to keep constant track of your card transactions and I feel it is madness to use it for things like food and small bitty purchases.

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">All the big stuff is taken from the bank on Direct Debits, the stuff that gets put into an envelope is the housekeeping and personal pocket money.

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">This way you can keep track of what you spend and once it's gone, that's it!

    <P style="MARGIN-BOTTOM: 0cm">If you keep your supermarket till receipts you can look at what you are buying and over a period of time you can tweak and fine tune your spending.

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">I know some people don't like having a lot of money in the house, but you can take out your food budget either twice a month or once a week.

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">However, I think it is wise to have a little bit of money in the house, in case of emergency.

    <P style="MARGIN-BOTTOM: 0cm">In this day and age and with our world being what it is, it is sad that we may find one day our banking system is not working..........it could be an honest glitch or whatever, but if you couldn't use your debit or credit card for whatever reason and you didn't have any cash, you would be in a pretty poor way! What would you do for food?

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">A small metal safe cost me about £40 and gives me the peace of mind I need to keep my credit cards and small amount of cash safe, from not just burglars, but fire too( heaven forbid!)

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">I know a lot of you like to use price books, which are a useful tool, because I try to base my household spending on mainly fresh food and as little of cleaning and beauty products as possible, I have already worked out where the cheapest paper goods are (tp and kitchen rolls) I use shampoo for hair AND body and Aloe Vera gel for HAIR and body too!.

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">I don't use coupons as they are not very common here and the few there are are never for fresh food or good stuff!!!

    <P style="MARGIN-BOTTOM: 0cm">

    <P style="MARGIN-BOTTOM: 0cm">After each shopping trip I put all the coins into a changes jar one is coins less than 50pence one is for £1 coins and 50pence coins, the bigger coins pay for our holiday spending money and the smaller ones I use for postage for surprise gifts

    <P style="MARGIN-BOTTOM: 0cm">


    <P style="MARGIN-BOTTOM: 0cm">I hope some of this is useful to those who are struggling with a budget or those who have too much month left at the end of the money LOL!

    <P style="MARGIN-BOTTOM: 0cm">BTW in the UK most people get paid monthly and 12 times a year ( in case any one is interested!)

    <P style="MARGIN-BOTTOM: 0cm">I am always interested in hearing what you think and the reason I bumped up the other 3 parts was for any new people who wanted to see the story so far............


    <P style="MARGIN-BOTTOM: 0cm">

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    Very interesting Karen.

    We've decided to go cash too. Recently, there have been a number of incidents where criminals have fulled around with bank machines (happened in both Edmonton & Wpg). We have no way of knowing which ones, so cash for us. We pay utilities through telebank.

    As to children, our kids have to earn their money. Dd helps me with cleaning the po and ds#1 watches ds#2 when I go out. They have to put 10% in their bank account, keep out 10% for tithes and the rest is theirs. It's interesting because both of the kids are pretty frugal and always put more than 10% in the bank.

    I love how you put the $250 into a special account once your vehicle was paid. Great plan.

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    In this day and age and with our world being what it is, it is sad that we may find one day our banking system is not working..........it could be an honest glitch or whatever, but if you couldn't use your debit or credit card for whatever reason and you didn't have any cash, you would be in a pretty poor way! What would you do for food?


    Just think of all those poor displaced persons from Hurricane Katrina who couldn't access their banks!!

    Hey, I LOVE that cute, new hairdo. It makes you look much younger.

    Well, I don't think I could go to cash-only. I am way too scatter-brained and disorganized for that! I do try to always use my debit card though and not the CC for my purchases.

    BTW, I got me a spray bottle and keep it on my sink with your tip on some diswashing liquid mixed with water. Someone else also suggested adding a little vinegar to cut grease. It's working great and should be quite awhile before I need to buy anymore detergent.

    Thanks Karen!

    Debbie

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    Thank you very much for your ideas. I also love your new hair cut. You look great!

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    Registered User Scattymum's Avatar
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    I've been waiting for part 4 , Thanks Karen!!.

    I'm really enjoying reading and learning from these, you make an awful lot of sense by breaking it down into small catagories, I've printed these off so I can re read them. DH and I have changed alot over the past few months but The start of the new year is going to be much better and I'm hoping that a lot of the things I have learnt of this board are going to be put into practice and get us sorted once and for all!!

    Thanks again

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    Yippeeee! Part 4 is here!!
    Thanks Karen!
    Graci

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    I love your system Karen.

    I really like that you emphasize rolling stuff over. Just because it's there in a category, and it hasnt' been spent, it's great to let it sit and build a bit. Then when the bigger wants come along, you can deal with them.

    it's more satisfying than deciding on next thursday we will buy x type of clothing, because we have this amount of money and we are nearly needing new jeans.

    By rolling over and letting the fund build, you wait till the sales come, and get more for the money or you find that you need a coat, which is a lot more money, but you have it there. Meanwhile the jeans can go a bit longer.

    Make it last, wear it out or make it do.

    it's a great principle for budgeting. It fits in all categories.

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    Registered User my4littlebuffaloes's Avatar
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    We struggle with rolling things over. We use the cash envelopes for about 7 different things. Many times I pull from other envelopes when the one I need money from is out. Sometimes it is necessary (child is sick and needs to go to the doctor) and sometimes it isn't (great sale at the grocery store, but am out of grocery money for the month). We get paid monthly too and absolutely love it! I also have a savings account for those non-monthly expenses. Once I set this up - I have rarely had a true emergency. The freezer broke - we had the money in the household repair account. Dh car needed a new muffler - we had the money in the car repair account. It has truly been a life saver! Now if I could just do better with the cash envelopes, we would be great!

    Jennifer

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    Thanks for more of your good tips Karen.

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    Im glad these Life Laundry threads were bumped up, I read them all and will probably revisit as well.


    ~Audrey

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    Thanks so much Karen! I can't wait to rework my budget once my debts are paid off. There are some categories you mentioned that I want to start adding to my list in my budget. (holiday/clothing fund) Right now I don't specifically budget for these things because all of my extra money goes towards debts, but when I need something extra for myself or as a gift, it makes it tough to find the cash unless you have it set aside for that type of thing.

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    I just read all four parts Karen - some great tips in there - especially the ones on cleaning products and toiletries. Thanks.

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