No Savings... Is this wrong

mirrorwall14

I hated the budgeting apps but we developed our own system of spreadsheets which earmark our wages and split it up as follows. We change the weeks according to the month in question. It's a fairly sophisticated spreadsheet but we developed it over a year to fit our own needs. All I have to do is pop in our bank balance to see if we are ahead or behind where we need to be. We both found we needed a little discretionary money so we have a daily allowance which I can use for coffees or save for a lunch out etc. Having a daily figure in your head really curbs the 'will I stop for a coffee' mindset

Daily allowance
Mum 5e
Dad 5e

Everyday monthly mexpenditure
4*60 shopping (two adults one toddler)
2*Car petrol mum
3*car petroldad
4*childminder
Etc
These get reduced as we do them

Monthly expenses
These are one off payments so get ticked as they go e.g.
Rent
Life insurance
Car insurance
Phone
Medical drugs
Savings

> monthly expenses
These we allow build up so the monthly money is withdrawn to a different account each month as soon as we get paid and put back in when the bill falls due. We tend to over egg the ones that could be a shocker e.g. ESB and oil and the others will change based on your own needs. The presents one has made the biggest impact on discretionary spending as we are far more inclined not to go nuts but there is leeway to save a little more in a month if we want to get something bigger. We keep a record of the balance for each item in the spreadsheet

ESB (100 a month)
Oil (70 a month)
Car tax (annual divide 12)
Car maintenance (50e a month)
Presents (50 a month)
House insurance (annual divide by 12)

If there's is any balance in the account at the end of the month we add it to extra savings. It works very well for us and increased our savings rate massively as the savings money was already earmarked and 'gone' at the start of the month.


No matter how you do it this does require work and patience but honestly it is so so worth it. We have just paid our booking deposit for our own house after getting the hang of this a while back

BetsyEllen

Pecker31 wrote: »

Thanks Guys,

Gonna sit down tomorrow night and look at "ynab" and fill it out, hopefully we can come up with a three year plan!

Thanks for all the advise

Had a quick look myself, it costs to use it each month.
I just downloaded one to my phone called Budgt, cost me €1.99 - I've been putting all my spends in for this month so far from my online banking...Jesus, I swear I pay all of the Tesco staff's wages!! Seriously need to cut down on that :eek:

AlmightyCushion

BetsyEllen wrote: »

Had a quick look myself, it costs to use it each month.
I just downloaded one to my phone called Budgt, cost me €1.99 - I've been putting all my spends in for this month so far from my online banking...Jesus, I swear I pay all of the Tesco staff's wages!! Seriously need to cut down on that :eek:

For the likes of Tesco and that. Keep the receipt and break the shopping down into categories. Food, junk food, alcohol, etc. No point finding out you spend a fortune in tesco without knowing what it's going on. If you see at the end of the month that you spend over €100 on sweets and biscuits in Tesco then you might hesitate picking up that pack of hob nobs the next time you go.

magicmoves

BetsyEllen wrote: »

Had a quick look myself, it costs to use it each month.
I just downloaded one to my phone called Budgt, cost me €1.99 - I've been putting all my spends in for this month so far from my online banking...Jesus, I swear I pay all of the Tesco staff's wages!! Seriously need to cut down on that :eek:

Make sure not to include cashback if you do get cashback at the till.

howamidifferent

BetsyEllen wrote: »

Had a quick look myself, it costs to use it each month.
I just downloaded one to my phone called Budgt, cost me €1.99 - I've been putting all my spends in for this month so far from my online banking...Jesus, I swear I pay all of the Tesco staff's wages!! Seriously need to cut down on that :eek:

YNAB4 the desktop version with accompanying Apple & android apps can be bought for a once of $60 . The online version is the pay per month version.

Judge Trudy

fits wrote: »

I always take the savings out and make all my payments at start of the month and work from there. Also I think three times before spending money on anything. coffee and 'little bits' really add up.

I second this method of saving. I'm lucky that my job has a credit union attached to it so my fortnighly savings goes straight into my savings account, then I just budget and live on the rest. I also have a 7 day notice savings account that I put 10 or 20 euro into here and there. I have to give 7 days notice if I want to access it so takes away the temptation to dip in and out of it. There are definitely other things I spend too much on like food but we're still getting into our groove after moving in together so I'll learn to budget better soon.

BrokenArrows

Pecker31 wrote: »

Hi so I am looking for some general advise.

I earn a wage of €1520.00 P/M NET. My OH earns slightly less approx €1320.00. Our rent is €650 P/M and between us we have NO savings. We are both 35 and really want to start saving for Kids/House/Life etc. I know we are a little older but we only met 3 years ago.

We have no kids and no major debt (I have a €7K CU loan which I pay weekly).

The problem is we are always broke, I am always in my overdraft and we are down to the penny the day before pay day

What would you need to be saving a week/month to even get a mortgage and how can we start. Thank you.

Whatever about not having savings you are 7k in debt (That is major when you have no savings and a low income).

In reality you have zero chance of getting a mortgage based on your debt and combined income. If you didn't have that debt then you will stand a better chance.

You're going to need at least 10% of the price of a property for the mortgage deposit. So you're looking at at something like 20k minimum. So if you somehow manage to save 300 per month together it will be 5 years before you have that amount.

In reality you should both be trying to get better paying jobs or get second jobs for a few hours in the evenings. If the both of you earn an extra 300 per month in part time work then you have just cut your saving time from 5 years to 2.5.

lawred2

Pecker31 wrote: »

€200 a month on food?? We spend at least €450! That might be a start of where we are going wrong!

two of you spend 450 on food?

BrokenArrows

BrokenArrows wrote: »

You're going to need at least 10% of the price of a property for the mortgage deposit. So you're looking at at something like 20k minimum. So if you somehow manage to save 300 per month together it will be 5 years before you have that amount.

Even the Central Bank lending limits would make it tough on their combined incomes, depending on where they intend to buy.

moleyv

This thread is very helpful actually. I was only wondering the other day about good budgeting apps/programs.

I always can cover bills, have a regular savings account and some longer term savings. And a month of a fall back fund to cover bills.

I still feel like I could be doing better though, and have no idea of what I spend and when (outside of my bills).

I am guessing the YNAB wouldn't link in with my BoI current acc?

BrokenArrows

Karsini wrote: »

Even the Central Bank lending limits would make it tough on their combined incomes, depending on where they intend to buy.

True.

The real goal OP should be to look at your situation. Realise that at 35 you should be earning more than what you are. Figure out a plan to increase both your earnings.

I don't know where in Ireland you're based or what your skill set iis but i know companies in galway who pay 24k gross (about 2750 net pcm) for people to just answer the phone so it wont be too hard to find something better than what you have.

So you need to be dedicating your time every week to applying for higher paying jobs. Don't be afraid to apply for things which are far outside your experience. You might find an employer willing to train you up.

And a lesson I learned after wasting many years is if you're not getting at least an extra 2-3% per year raise in your salary then its time to move. Thats the cost of inflation so if you stay in that job then you are earning less than the year before. And people only really get large raises when they change jobs. My last 3 job changes involved an extra 10-20% each time. The previous 4 years in the same job got me an extra 4% over the whole 4 years.

EagererBeaver

OP, tools like Google Docs have budget templates that are extremely useful (and free). As someone already pointed out, what you need to do is figure out where you're money is going and then start imposing some discipline. Look at what's mandatory and what isn't (e.g. hot water is a necessity but Sky Sports multiroom HD isn't etc. Generally the way I and my girlfriend categorise things as is:

Rent/mortgage
Utilities
Other Bills (TV, phone, internet, netflix, spotify etc - anything with a monthly or other regular payment)
Transport
Lifestyle (gym etc)
Miscellanaeous

To answer the original question though, blowing 2,200 a month and not really knowing where it's going is wrong, yes. Someone mentioned you should have a minimum of six months salary in savings (not to be contributed toward a house) which I think is a bit conservative. Three months living expenses is generally the accepted figure.

Good luck and let us know how you got on.

okiss

A few years ago I was in your position. I had some debit and no savings. I realised that I had to make a few changes to my life to get out of debit and to get some savings together.
I found this website very good - www.consumerhelp.ie. Go to the tools and calculators and then into budgeting calculators.
This budget allows you to put in all your expenses under either weekly, monthly, quartly and yearly. It then works out how much your spending compared to what you are earning.

In your case I would get a note book and write down everything you spend in the next week be it petrol, food, take aways ect. You need to see where your spending money and workout from their were you can start of save.

This is what you need to do.
1. Start from next week to put €10 to €20 a week aside for Christmas. You will have to buy presents, have nights out ect so you don't want to be in debit in Jan.
2. You need to get your credit union loan paid off as soon as possible to pay less interest. Once you do this you can put this extra money into a savings account.
3. Open a high interest regular savings account and as soon as you get paid a standing order of x amount a month goes into it.
4. Aim to get rid of your overdraft. Your bank are changing you a set up fee and interest on this. Also if you are keen to apply for a mortage over the next few years and your always in your overdraft it does not look great.
5. Look through your presses and the fridge and freezer. Make out a meal plan for the week and buy just what you need. Bring a lunch or a dinner you can heat up into work rather than buying a sandwich/meal out/coffee ect.
6. When you shopping keep an eye for buy one get one free or large packets/bottles of the products you use. Stock up on these when they are on offer ie bottle of persil washing liquid.
7. Make large amounts of the meal you might like ie chill/curries and freeze some dinners. When you come in from work uses these rather then get a takeaway.

8 Start to pay for everything in cash ie food, what you spend on a daily basis. Then once a week say on a Sunday take €30 out of the cash machine for that weeks incidentals. When this money is gone you don't take out more. It will start to make you think before you spend.

Look at the following bills also
Tv, landline phone and broadband - most companies now do a combination of these 3 - make a note when you 12/18 month contact is up on these and then check out prices about 2 months before this. If your with sky ring them to get a better offer. Do you need sports/movies ect as part of your package?

Mobile phone. See if you can get a better deal by changing providers. Also look at pay as you go also for €20 or €30 per month.

Health insurance. Have look at www.hia.ie website and see can you change your cover when this comes up for renewal. Be willing to pay an excess and it should bring down the cost of cover.

Car expenses. Do you both have cars? Could you manage with one car instead of 2? Price car insurance with a few companies.
If you use pubic transport see if you could get a comuter savings ticket. Your employer pays for this and you pay them back. It could save you both some money as they are charged less prsi and you pay less tax.

The reality is if you want to buy a house you have to save 20% deposit of the purchase price and have another few thousand to pay for solicitors ect. I would also advise you not to have a child/children until you have a mortgage because the bank will take these into consideration re the ammout you can borrow. Do not take out any more loans once the cu loan is paid off even a small loan or credit card debit can effect the amount you can borrow also.
Also you may ony be able to get a mortage out for 20 or 25 years due to your ages. The banks will want the mortage to be paid before you both retire.

I hope the above helps you.

howamidifferent

moleyv wrote: »

I am guessing the YNAB wouldn't link in with my BoI current acc?

Probably not but they have a free trial so you could check. I know it supports PTSB...

daheff

Michael D Not Higgins wrote: »

OP just to let you know, since you mentioned a house as one of the targets, on your current salary you would only qualify for a mortgage of ~135k which you would need to have a deposit of at least 15k for a max house price of 150k. Depending on where you want to live, this could stretch from a shoebox to a house.

I'm guessing with rent of 650Eur, that property prices would be relatively low (ie not Dublin). 130K of a mortgage with AIB would be a repayment of circa 585E a month. (check www.bonkers.ie)

Roughly speaking you need to save 22K (7 for current loan and 15k for a deposit) before you can look at buying somewhere (unless a family member can give you a deposit).

BrokenArrows wrote: »

Whatever about not having savings you are 7k in debt (That is major when you have no savings and a low income).

focus on paying off the most expensive debt you have first- this is probably your overdraft or credit cards. then look at trying to pay the 7k off.

BrokenArrows wrote: »

In reality you should both be trying to get better paying jobs or get second jobs for a few hours in the evenings. If the both of you earn an extra 300 per month in part time work then you have just cut your saving time from 5 years to 2.5.

thats all well and good to suggest - but maybe the OP isn't qualified to do something else...maybe there isnt any other work in the locality?

Best thing to do is to benchmark what you currently get paid. See does it stack up with other similar jobs. Maybe your employer is trying to underpay you.

Also make sure you are claiming all the right tax credits available to you.



But dont put your head in the sand and ignore it. Know what you are spending on and budget. A budget doesnt mean you have to have no fun..but doesnt mean you splurge all the time either.

Pecker31

daheff wrote: »

I'm guessing with rent of 650Eur, that property prices would be relatively low (ie not Dublin). 130K of a mortgage with AIB would be a repayment of circa 585E a month. (check www.bonkers.ie)

Roughly speaking you need to save 22K (7 for current loan and 15k for a deposit) before you can look at buying somewhere (unless a family member can give you a deposit).


focus on paying off the most expensive debt you have first- this is probably your overdraft or credit cards. then look at trying to pay the 7k off.




thats all well and good to suggest - but maybe the OP isn't qualified to do something else...maybe there isnt any other work in the locality?

Best thing to do is to benchmark what you currently get paid. See does it stack up with other similar jobs. Maybe your employer is trying to underpay you.

Also make sure you are claiming all the right tax credits available to you.



But dont put your head in the sand and ignore it. Know what you are spending on and budget. A budget doesnt mean you have to have no fun..but doesnt mean you splurge all the time either.

Thats just it I did leave a job what paid €680 p/m more but there was a lot of factors in that and I am 100% happier where I am, I live in a rural town and I am doing admin work but currently on the look out for something else.

Have contact MABS so we are meeting with them and we are going to budget tonight and see what it looks like.

Thanks for all yer help

Pecker31

lawred2 wrote: »

two of you spend 450 on food?

ya crazy isn't it!