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Bunchy The Budgeteer Has Moved!

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Come over to see me in my new fancy schmancy internet house over at bunchythebudgeteer.com.

It’s going to take me some time to iron some things out, so in case you can’t see my latest blog post please check it out directly at this link: Websites and Apps to Save You Money.

Easy Carrot, Orange, Coriander and Ginger Soup

Another Autumnal day calls for the last of the fail-safe and easy soup recipes we use. This time it’s with carrot, orange, coriander, and ginger. The recipe name may sound as if the cooking will be a large production. It isn’t. Especially if you use cheats, as I often do!

* Photo courtesy of  dreamstime.com (As soon as I next make my next batch, I’ll snap a picture and add one of my own).

Another Autumnal day calls for the last of the fail-safe and easy soup recipes we use. This time it’s with carrot, orange, coriander, and ginger. The recipe name may sound as if the cooking will be a large production. It isn’t. Especially if you use cheats, as I often do!

It’s also yet another soup that can be suitable for vegans and those with gluten intolerance. Ensure the stocks used are suitable for you and you’re good to go.

I like to make a large batch of this on the hob, as it’s quick to make. By making much more than needed for one dinner, we can freeze portions and use on lazy days. Batch cooking like this saves not only your energy and time but your energy bills too!

I’d been making this soup for a few years before meeting my (now) husband. Trying to convince him that orange works well in this recipe wasn’t easy. He thought I was ‘mental’ to include it, but he changed his tune after trying the soup for the first time. Now it’s one of his favourites.

My inspiration for the recipe was from Riverford Organic Farmers (the people who I’ve ordered veg boxes from). I tweaked it a little, as you may also want to.

Finally, I can’t let you go without sharing these fun facts (well I enjoyed them, but then I’m a bit of a nerd) taken straight from Wikipedia:

The provitamin A beta-carotene from carrots does not actually help people to see in the dark unless they suffer from a deficiency of vitamin A. This myth was propaganda used by the Royal Air Force during the Second World War to explain why their pilots had improved success during night air battles but were actually used to disguise advances in radar technology and the use of red lights on instrument panels. Nevertheless, the consumption of carrots was advocated in Britain at the time as part of a Dig for Victory campaign. A radio programme called The Kitchen Front encouraged people to grow, store and use carrots in various novel ways, including making carrot jam and Woolton pie, named after the Lord Woolton, the Minister for Food. The British public during WWII generally believed that eating carrots would help them see better at night and in 1942 there was a 100,000 ton surplus of carrots from the extra production.’

Enough chatter. You want the recipe

Easy Carrot, Orange, Coriander and Ginger Soup

(serves four)

Ingredients:

  • 1 large onion (chopped)
  • 2 cloves of garlic (chopped) *Optional.
  • 900g of carrots (chopped)
  • 1 tsp of fresh ginger (grated) *We store our root ginger in the freezer and take it out to use when needed. In a pinch, or to save time, you could also use ginger powder.
  • 2 tablespoons of oil
  • Juice of 2-3 oranges (and zest, if you wish) *To save time, use 150ml of orange juice instead.
  • 1 litre of veg stock
  • A few coriander leaves (chopped) *You can use chopped parsley leaves if preferred. To make the recipe more frugal and easier, use dried versions of the herbs instead.

To Serve (Optional):

Plain yoghurt or creme fraiche (use dairy-free or gluten-free if necessary).
Salt & pepper to taste.

Method:

1. In a large saucepan, heat the oil and add the chopped onion.
2. Cook on a gentle heat for 10 minutes, or until the onion is soft.
3. Add the garlic (if using) and cook for another minute or two.
4. Add the carrots, ginger (and zest, if using), stir to mix and add the hot stock.
5. Bring to the boil, then reduce heat to a simmer and cook for 20 minutes (or until the carrots are softening).
6. Blend up the soup mixture in a blender or with a hand mixer, until smooth.
7. Return the mixture to the pan, add the orange juice and reheat on a low setting.
8. Add salt and pepper if desired and a blob of yogurt if using.

We like to eat this for dinner with either crusty bread, french baguette or with sandwiches. Nom, nom, nom.

Let me know if you try it, or if you tweak it, and how it turned out!

Here is the inspiration for the Easy Carrot, Orange, Coriander and Ginger Soup. You may also want to have a look at Mr.B’s (the hubster) Vegan-Friendly Frugal Tomato Soup, my Frugal And Healthy Spicy Lentil Soup  and my Chunky Autumnal Vegetable Stew Slow Cooker Recipe.

I love hearing from you and want to grow this community that is growing each day. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.

Lisa a.k.a ‘Bunchy’

Chunky Autumnal Vegetable Stew Slow Cooker Recipe

I’ve been craving a hearty and chunky vegetable stew for a couple of weeks now. Something ‘Autumnal’.

I’ve been craving a hearty and chunky vegetable stew for a couple of weeks now. Something ‘Autumnal’.

I don’t know about you, but Autumn is my favourite season. Yes, there are some downsides, such as:

  • Being cold.
  • Having increased heating bills.
  • Not being able to dry our washing outdoors as fast as usual.

Yet, we can enjoy:

  • Getting wrapped up and going to feed the squirrels in leave-strewn parks.
  • Snuggling up under a blanket with a hot mug of tea and a good book or film.
  • Filling up on yummy, stodgy, home-cooked food.

bunchythebudgeteer.wordpress.com-chunkyautumnvegetablestew

* Image courtesy of Dreamstime.com

Feeling grotty today and not wanting some rather sad looking vegetables to go to waste, I pulled out the slow cooker. So much easier than regular cooking and I knew that if I began to feel more ill (I did), at least I’d made dinner!

Here’s the Recipe:

  • 2 red onions (finely chopped)
  • 2 leeks (finely chopped)
  • 4 cloves of garlic (finely chopped)
  • 4 small carrots (cut into large chunks)
  • 4 small sweet potatoes (cut into large chunks)
  • 4 small Maris Piper potatoes (cut into large chunks)
  • 150g dry red lentils
  • 2 litres of hot vegetable stock (made with 3 veg stock cubes and a teaspoon of vegetable bouillon – because I ran out stock cubes).
  • 2 bay leaves
  • 1 teaspoon of dried parsley
  • Gravy granules to thicken, at the end of the cooking session.
    (Or instead, you could omit the gravy granules and mix some cornflour with water and add).

Method:

  1. Peel and chop up the veg.
  2. Make up the stock with boiling water.
  3. Put all the ingredients into the slow cooker.
  4. Cook on low for 8-10 hours or on high for 5-6 hours.
  5. Thicken if desired.
  6. Add dumplings if desired.
  7. Enjoy!

This made enough for me to put a few container fulls into the freezer, for nights when neither Mr.B nor I want to cook.

I had this for dinner this evening and it was scrummy!

It’s a cheap, healthy meal and won’t bust the budget. It’s also suitable for vegetarians and vegans (even the dumplings were vegan-friendly!). Many supermarket stocks and gravy granules are also gluten-free. By using them, this stew can also be enjoyed by people with with gluten intolerance.

Let me know if you try this recipe. Though not exactly the same, I based the recipe on one from my Sarah Flowers slow cooker recipe book, which you can find here.

Do you have any good vegetable stew or soup recipes that you’d recommend? Please share, so that we can all enjoy!

For more soup recipes, check out my Frugal and Healthy Spicy Lentil Soup,my Vegan Friendly Frugal Tomato Soup and my Carrot, Orange, Coriander, and Ginger Soup.

I love hearing from you and want to grow this community that is growing each day. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.

Lisa a.k.a ‘Bunchy’

Things You Need to Know Before Making Your First Budget

If you’ve identified that you need a budget, great! We all need a budget, whether we’re on low OR high incomes. To not tell our money what to do each month puts us at a financial disadvantage. Before you start, though, there are some things you need to know…

Image courtesy of Christopher Hall for Dreamstime.com


If you’ve identified that you need a budget, great! We all need a budget, whether we’re on low OR high incomes. To not tell our money what to do each month puts us at a financial disadvantage. Before you start, though, there are some things you need to know:


What Are You Currently Spending Your Money On?

You can’t set a realistic goal of spending £200 on groceries if, for the last six months, you’ve spent £400 per month.

For each of your budget categories, find out what you have been spending. If possible, look back over the past three months. Next, track your spending, for each area (groceries, eating out, clothes shopping, etc) for a month.

Write everything down as soon as possible and keep receipts.

Then, when you make your first budget, decide on a new amount for each category that is closer to what you want to spend. You can always adjust the amount for future months.

Do You Have Money Left at the End of Each Pay Period?

If you do, consider giving this surplus amount a purpose. This could be debt-repayment, savings, or whatever goal is most important to you at the moment.

You Don’t Need to Be Good at Maths to Have a Successful Working Budget

I’m not at all gifted at maths. Not even close (I even still count on my fingers!). All you need is a bit of organisation, a desire to feel better about your finances, a calculator and you’re all set.

Making a Budget Doesn’t Have to Involve Making a Fancy Spreadsheet

I do use a spreadsheet, but for ages, I used a pen and paper. I find it easier since using a spreadsheet that I designed for myself, but pen and paper budgeting is fine.

If you wanted to, you could use a money management app or software. There are loads around, but YNAB is very popular. They also have great video tutorials on YouTube. I signed up for the free trial and must admit, I found it a bit confusing, but I didn’t put enough time into it. You might be one of the many who love it.

Another great place to get started is ‘The Money Advice Service‘ Budget Planner.

Experiment with your budget and see what works best for you.

You Need a Budget If You Want to Improve Your Financial Situation

You’re reading this post because you want to improve your financial management.

If you have debts that you want to pay off, then budgeting will achieve this faster.

If you want to save optimal amounts of money each month, then you need a budget.

If you want to see how fast you can retire or pay off your mortgage, then you need a budget to help you to reach your goals.

If you want your partner to be able to stay at home with the children, then you need a budget to work out how to do this.

How Much Money Do You Owe, Who Do You Owe It to, and When Must It Be Re-Paid?

For most people with debts, especially those with a large debt-load, this can be the hardest thing of all. Everyone can understand not wanting to face up to such a stressful thing. The truth is, though, that unless you know exactly what you’re dealing with, you can’t improve things.

Get all your letters, statements and bank accounts opened up and add up what you owe and who to. Add the dates that these debts need to be repaid.

A Budget Doesn’t Mean That You Can’t Have Any More Fun

Budgets have a negative connotation of being ultra-constrictive. They can feel this way if your basic outgoings are almost as much as your income, even after making major cuts.

Can you meet your obligations and still put decent amounts to savings and/or debt? If so, then recreational spending is a good idea! It’ll stop you from feeling constricted and help you stay on track to reach the goals you’ve set yourself.

How Often Do You Get Paid or Receive Other Money?

If for example, you only receive income from one source every month then this is simple. Yet, if you receive income from more than one source, then they may come at different times.

If you receive a payment every two weeks, you’ll have months where you get three payments instead of two. Looking at exactly when you get paid is important to be able to budget well.

What Are Your Money Goals?

Knowing your ‘why‘ is crucial to sticking to your budget. It’s the difference between following your plan for a few months or staying the course.

You already know that you want to start budgeting your money, but why do you want to? If you don’t already have a strong reason, then ask yourself what will budgeting help you achieve? Return to that thought whenever you’re feeling like you don’t want to continue with your plan.

What Are You Willing to Do to Make Your Income and Outgoings Balance?

After making a budget and some time has passed you may discover:

  • That your outgoings exceed your income.
  • That there’s very little money left to enjoy each month

If this happens, then you may have to make further cuts to your spending, find ways to increase your, or both. It’s wise to bear this in mind before discovering that your budget doesn’t balance.

What Events Are Coming up That Will Cost You Money and How Will You Prepare?

As well as your monthly expenses, there will be random expenses that crop up. This could be an unexpected work trip or an M.O.T. It’ll vary each month, so think about how you’ll budget for this. Will you have a miscellaneous category in your monthly budget? What about for things like Christmas? Will you set aside a set amount each month so that by December you have enough to cover everything?

What Style of a Budget Will You Use?

Read my post: ‘Are You Within The Recommended Guidelines For Your Monthly Expenses?’ and then decide how you’d like to design your budget.

You might want to split up your budget into ratios, such as:

A 10/20/70 budget:

  • 10% of your money to savings.
  • 20% towards extra debt-repayment (over and above what you’re obliged to pay each month).
  • 70% to cover everything else.

Or a 20/30/50 split:

  • 20% of your income goes to savings and/or debt.
  • 30% is for non-essential spending.
  • You keep your vital living expenses under 50%.

You may want to do something completely different.

Whatever you decide, be aware that as you build your budget, you may have to alter your plans. If, say, you have high outgoings compared to income, you may not be able to do what you’d first hoped to do with your money. This is ok. This discovery shows you that you need to think about how you’ll improve your situation. You can make things work.

The First Three Months Will Be a Learning Curve

I’ve heard this so often and it’s true!

An unexpected bill arrives and it’s at this point that you need to make an important decision. Many people will think ”Well, I’ve blown the budget, so I may as well start fresh next month. Now, where’s the nearest coffee shop?” Or, ”I’m terrible with money, there’s no point, and I’m giving up.”

What you could consider, instead, is that budgeting is a skill, like any other and so needs practise.

Life doesn’t care about your spreadsheet or bank account and it’s up to you to be creative. Is it possible to reduce your other spending this month, to cover the unexpected expense? Can you say no to the expense? How will you alter your budget going forward so that you’re as prepared as you can be for these such events?

Finally, return to your ‘why‘. It’s the reason that you’re doing this.

You’ll Sometimes Get Tired of Budgeting

If I, a budgeting nerd can sometimes get fed up with the budget that my husband and I made, then anyone can.

If you can add some ‘fun money‘ into your budget (even if it’s a chocolate bar each week!), then that will help.

Are you facing a long road of debt-repayment? If so, consider budgeting some ‘celebratory‘ money for when you pay off a certain amount. Then get back to it.

Again, remember your ‘why‘. It will sustain you.

If You Have a Partner, Then He or She Needs to Be on Board

This is so important.

If YOU want to live frugally and commit to pay off large amounts of debt, your partner can’t max out the credit card!

It’s fine if one of you takes charge of actually paying the bills and keeping track of paperwork. But you both need to talk about what you want for your immediate and long-term financial future. What sacrifices are you willing to make? Where do you want to spend your ‘disposable’ income each month?

I’ll let you in on how it works in our house. I update the spreadsheet, keep watch over the bank account and ensure that bills are being paid. This is because managing money has become a skill of mine and I (for the most part) enjoy it. Yet Mr.B finds all that stressful, boring and confusing. As boring and nerdy as it sounds, we have a budget meeting every month. Mr.B has an equal say in whatever financial events come up throughout the month.

What surprises us is, when we have our budget meetings, we end up talking about many other things. Money influences so many areas in life, such as where we want to go on holiday or who to buy Christmas presents for. It opens up communications about many things. In fact, I can say that it’s improved our communication in general. I’ve heard this so many times from other couples who budget together too.

If you don’t have a significant other, then you won’t have to concern yourself with the above. That said, you also don’t have somebody to keep you on track. So consider having some sort of accountability partner for support and encouragement.

It’s Worth Doing

I’ve always had a conservative attitude towards spending. I’ve always lived within my means. Yet it wasn’t until I made a budget and identified my financial goals that I saw noticeable results.

Since having a plan to follow, I’ve achieved such a lot. This is despite a low income and three years of being unemployable. I don’t say this to blow my own trumpet, but to encourage you that you can make a positive difference to your life. This comes when you tell your money what to do.

How Much Is Your Income, Actually?

You might be on a £25,000 salary, but what do you actually take home each month? After tax, National Insurance, and pension, what remains? Do you receive any government benefits? If so, how much? Add it all up to see exactly what you’re working with.

Practical Next Steps

  1. Decide if you’re going to have a weekly, fortnightly, four-weekly or calendar-monthly budget.
  2. Track your expenses for a month.
  3. Try to find out your expenses for the past three months.
  4. Work out how much money you owe, who you owe it to and when it must get paid.
  5. Write down what your weekly/monthly income is and what dates you receive it.
  6. Write down your reasons for needing a budget and what your next financial goal is (review often and when you achieve each goal).
  7. Look at your calendar and write down all the bills, (plus birthdays, etc.) that are going to occur in your budget cycle.
  8. Decide which budget style you want to try. You can always switch to a different style if the one you try isn’t a good fit for you.
  9. If you have a partner, set a time for a budget meeting to work through all the steps above. (If you’re flying solo, find an accountability partner).

All this may seem a lot to do, but if you want to succeed, then you need strong foundations. Once you’ve completed the groundwork, congratulate yourself for your effort. Now go and build your first budget!

I love hearing from you and want to grow this community that is growing each day. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.

Lisa a.k.a ‘Bunchy’

Why Having an Emergency Fund Will Help You to Sleep Better

Living ‘paycheck to paycheck’ is a stressful existence and if using debt is your only option for dealing with a major financial incident, then anxiety levels can begin to creep up and affect your quality of life. Nobody wants to be lying awake at night worrying if a cheque is going to bounce.

* Image courtesy of Dreamstime.com

What almost all experts will also tell you is that before you decide upon any other saving goals, you must first be working towards building an emergency fund (sometimes known as a ‘rainy day’ fund).

Emergency funds are predominantly a way of protecting yourself against a loss of income; which for most people will be a job loss. Of course, there may be other circumstances that will necessitate tapping into your emergency savings, such as unexpected and expensive car repairs that your usual monthly budget cannot cover.

Living ‘paycheck to paycheck‘ is a stressful existence and if using debt is your only option for dealing with a major financial incident, then anxiety levels can begin to creep up and affect your quality of life. Nobody wants to be lying awake at night worrying if a cheque is going to bounce.

Over the past two months, we’ve had to dip into our emergency savings for major and unexpected car expenses. It’s been a pretty stressful time, and although we hadn’t quite reached our goal of what we wanted to have saved in our emergency fund, the car debacle was a hell of a lot less stressful than it would’ve been had we not had some money in the bank to pay for not only the extensive gear-box work we had done but eventually a new (used) car!

Generally, something is an emergency expense if it’s a) unplanned, b) necessary and c) urgent. So your child’s birthday wouldn’t be classed as a good reason to take from your emergency fund, as you know exactly when it’s going to occur each year!

Some finance specialists advise that you have an emergency fund equal to three to six months’ worth of your usual income, whereas some recommend that you have three to six months’ worth of your usual monthly expenses (or outgoings) saved.

If you’re going to use your expenses to calculate your emergency fund savings goal, then you may want to know that some professionals recommend that you include only vital expenses (so this wouldn’t include any of your usual recreational or discretionary spendings unless you’d end up with a penalty that would cost you more than what you’d save by cancelling it – such as a mobile phone contract).

You may also want to consider if, during whatever financial emergency you’re going through, you’ll want to temporarily pause saving, making additional debt repayments and any investing towards retirement.

Of course, you’ll be able to reach your savings goal of having a complete emergency fund much faster if you’re aiming for covering only vital expenses. However, for those on a low income who don’t have much left to spend on non-essentials each month, there may not be a lot of difference between six months of income and six months of expenses!

When we first decided what our absolutely vital minimal expenses were, we looked at our usual monthly budget and went through each category and expense and subtracted any budget item that we could easily cancel without penalty if Mr.B were to lose his job. By doing this, we developed our emergency budget and were quickly able to work out how much (or little) was required to hit our goal of six months of expenses in the bank.
If the proverbial hits the fan then we can follow that bare-bones budget.

If you hate the idea of tightening up on your spending habits during say, a job loss, you may prefer to have three to six months of expenses saved, but be aware that if you don’t reduce your spending during the period of unemployment (or going from two incomes down to one) and you still haven’t found another job at the end of those three or six months, you’ll face problems. By cutting right back, you’ll be able to make that emergency fund last as long as possible and furthermore, you’ll have less to put back into the emergency fund once the storm has passed.

Do you have an emergency fund? If so, how long did it take to save? How many months of income or expenses did you decide upon and why? If you don’t have an emergency fund, is it something you’d like to achieve? If not, how will you deal with large and unexpected expenses or a loss of income? I’d love to hear from you!

For more on saving, check out: ‘Are You Within the Recommended Guidelines for Your Monthly Expenses?’

I love hearing from you and want to grow this community that is growing each day. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.

Lisa a.k.a ‘Bunchy’

The Difference Between Savings And Investments

If you’re just beginning to learn about how money really works and are wanting to take control of your finances, you may not be completely clear about the terms that are used in the financial sphere.

* Image courtesy of Dreamstime.com

If you’re just beginning to learn about how money really works and are wanting to take control of your finances, you may not be completely clear about the terms that are used in the financial sphere. Hopefully, I can clear up one common cause of confusion; the difference between saving and investing money.

Most people know what saving is, but it’s good to define the meaning so that you can see the difference between this and investing. So, to save means putting away money a bit at a time, usually to pay for something specific or for a ‘rainy day’ fund.

Savings are usually kept in a bank or building society account and your money is easily accessed when you need it. Some accounts may pay you interest on your savings, but this is more of a benefit rather the sole aim of the money.

Money kept in savings is generally at a very low risk of loss, but remember that savings are still at risk of losing value due to inflation (where the buying power of your money and any interest earned on it doesn’t keep up with the increased cost of living and therefore what your money can buy now will be less than what it can buy you in the future).

Investing is still a form of saving, but here you are taking some of your money with the aim of growing it by putting it into things that you think will increase in value e.g. investing in stocks, shares or rental property.

Money that is placed in such investments is at a higher risk of loss, as whatever you choose to invest your money into may not increase in value and may actually decrease in value. Usually, the higher the risk of an investment, the higher the amount of ‘return‘ (what you’ll get back on top the initial amount you put in) you could receive.

For more on saving and investing, you may like to read ‘Are You Within The Recommended Guidelines For Your Monthly Expenses?’

I love hearing from you and want to grow this community that is growing each day. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.

Lisa a.k.a ‘Bunchy’

Are You Within The Recommended Guidelines For Your Monthly Expenses?

Maybe you’re in a spin about what percentage of your income you should be investing into a pension, so that you’re not eating cold baked beans in your old age? (Unless that’s how you roll).

Are you confused by all of the financial advice out there, telling you how much you need to be saving each month? I know that I used to be!

Maybe you’re in a spin about what percentage of your income you should be investing into a pension, so that you’re not eating cold baked beans in your old age? (Unless that’s how you roll).

Do you ever wonder if you’re spending far too much of your income on things you enjoy, but that may be costing you more than the actual price tag, in terms of your financial health?

Are you stressed because you can’t possibly save what (insert financial guru’s name) recommends you save each month because right now you’re struggling to afford the basic requirements of living? (I know I’ve been there) Well, please read on, friend…

Let me first say that I truly don’t believe there is a ‘one size fits all’ plan to personal finance. It’s personal finance after all! I do, however, believe that there are good rules of thumb that we can go by and tweak here and there to suit our particular circumstances. When I say ‘tweak’, though, I mean altering things to benefit our financial situations and not simply to satisfy our spending desires.

I’ve read a lot of advice on what percentage of ones’ income should be put towards various categories, and some financial experts split up the categories slightly differently, but for the most part, they tend to fall into the following areas:

  1. Saving and Investing (there’s a difference and you can find out more here.).
  2. Debt-repayment (over and above what must be paid each month, such as a mortgage payment and paying the minimum balance on a credit card).
  3. Vital household and living expenses.
  4. Recreational/discretionary spending.

Let’s start with savings

The general advice seems to be that we should aim to put 10-20% of our net (‘take-home’ pay, after tax and National Insurance has been taken out) income towards savings &/or investments each month.

What almost all experts will also tell you is that before you make any other saving goals, you must first be working towards building an emergency fund (also known as ‘rainy day’ fund). Check out ‘Why Having an Emergency Fund Will Help You to Sleep Better‘.

Once you’ve got your emergency fund saved (or while you’re still saving for it) you might want to consider other savings.

Firstly, there are Short-Term Savings – These are for expenses or purchases you expect to happen in less than five years, for example, a family holiday or Christmas.

Medium-Term Savings – For expenses or purchases you expect to happen within five to 10 years, e.g. a new car.

Longer-term Savings – For expenses expected to occur in ten years or more, such as saving up for a child’s university tuition.

You may decide that you instead want to invest long-term savings, to maximise it’s chance of growth. Due to the fact that the money won’t be needed for several years, it has a better chance of weathering any fluctuations of, for example, the stock market. However, if you’re not willing or able to risk the fact that you may end up with less money when it comes time to withdraw it, then a savings vehicle may be a better option for you.

Have you ever heard of ‘sinking funds‘?

These are basically mini-savings goals that are designated for specific purposes.
You may decide to use separate bank accounts for each sinking fund, you may keep the money in jars at home (probably not the safest idea for anything other than small sums of money), or you may just want to lump all of your savings together in one place, keeping track of what money belongs to what fund/purpose on a spreadsheet or in a notebook. Our sinking funds have saved our skin and our budget many a time!

One final note before moving on to the next category is that some financial experts say that you should forget having any type of savings, even that of having an emergency fund, until you’re out of (non-mortgage) debt.

Some people suggest that you have at least a minimal safety net of one month worth of expenses saved while you’re getting your debts under control. Others recommend that you save money towards building your emergency fund at the same time as paying off debts.

Whatever you decide the best option is for you and your family will really depend on several things, including how secure you feel that your jobs are, how tolerant you are to risk and, if during a period of unemployment or prolonged illness, how badly you’d be impacted by your debts if you hadn’t prioritised them above savings.

Investing

For most people, this will mean the money that they save into their pension plan, but it could also include other investments such as investing directly into the stock market or buying a second property.

As mentioned before, you may also want to invest money earmarked for long-term savings goals (more than 10 years), in the hope that it’ll grow more than it could in an easily accessible savings account.

Experts recommend putting 5-20% of your take-home pay into investments/retirement savings, though other experts advise using half your age as a percentage for how much you put into retirement investments.

For example, if you haven’t consistently contributed to a pension or investment by the age of 40, you’d, therefore, invest 20% (half your age) of your income until you retire. It just goes to show that the younger you begin saving for your retirement, the smaller the chunk taken away from your monthly budget! It all depends on how much you want to live on in retirement and what your retirement goals are.

Investing is an extensive topic and something that people should get professional advice about from a regulated independent financial advisor when making such important and long-term decisions.

Debt repayment

The advice seems to indicate that we should be putting 5%-20% of our take-home pay towards debt each month.

This percentage doesn’t include your usual monthly mortgage payment (if you have one) or paying any minimum credit card balance, as they ‘have‘ to be paid or you risk additional debt and possibly losing your home. No, what this means is, for example, making additional payments towards a mortgage if you want to pay it off earlier (some financial gurus advocate this and others feel that there are better things to be doing with your money) and clearing credit card debts or paying off a car finance agreement, etc.

Vital Household and Living Expenses

We’re advised to keep this category of spending between 50-70% of our take-home pay. Though not meant to be an exhaustive list, this category will include things such as:

  • Food & household groceries (the basics).
  • Mortgage or rent payment.
  • Council tax.
  • Gas, electricity, and water.
  • Fuel/public transport to get to and from work.
  • Clothing basics.
  • Life assurance.
  • Home (building &/or contents) insurance.
  • Car tax, new tyres, car insurance, and M.O.T.
  • Sight tests and glasses.
  • Prescriptions.
  • Dentistry.
  • Boiler servicing.
  • Necessary hair-cuts.

Recreational/Discretionary Spending

This is where you finally get to have some fun with your money and use it for entertainment purposes!

From all of the research I’ve done, the advice seems to tell us to try to keep these non-vital expenses between 10-30% of our net pay.

Again, the list below isn’t intended to be an exhaustive list, as what you chose to spend your ‘fun money‘ on may vary greatly to what I like to spend my money on, but it may include such things as:

  • TV subscription services.
  • Sports equipment, toys, and gadgets.
  • Beauty salon treatments.
  • Restaurants/eating out.
  • Alcohol.
  • Smoking and vaping.
  • Days out.
  • Non-essential home improvements.
  • Make-up.
  • Junk food and takeaways.
  • Luxury grocery items.
  • Clothing (that isn’t just the basics to keep you from being arrested or dying from hypothermia/heat-stroke).
  • Jewellery.

…and unless it’s used for business purposes, some financial specialists would also include having home internet, landline telephones, mobile phones (and their tariffs) as non-vital budget items.

I hope that by seeing what the experts recommend, you now have a clearer picture of how your spending compares.

As long as you’re aware of the potential impact of where you allocate your money each month, whatever you decide to do is going to be very personal to you and your circumstances.

Some people don’t have the luxury of choosing where they prioritise their spending. They may have cut back everywhere possible and either still don’t have enough for the basics each month or don’t have enough to save. In these situations, it’s not a spending issue that they have, but an income issue and until that’s improved, they shouldn’t, for example, concern themselves with investing.

Have you calculated how much of your income goes into the categories above? Are you a natural saver or spender? What are your views on prioritising debt repayment over saving or vice versa? Do you have an emergency fund?

I love hearing from you and want to grow this community that is growing each day. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.

Lisa a.k.a ‘Bunchy’