Hi @robert. Just before lockdown began, I had migrated from YNAB to Wallet (Budget Bakers) because it has better cross-platform support. YNAB works fine on a laptop/PC but I think Wallet is better on a smartphone/tablet and it has better support for Openbanking API’s. Wallet has good reporting capabilities.
It’s easy to get overwhelmed by the work needed to create a detailed budget so a good starting point for beginners would be Yolt (very easy to use, some reporting) or MoneyDashboard which gives more detailed reports.
If you prefer paper or spreadsheets, I would recommend Martin Lewis’s Budget Planner.
If you feel confident enough to dive in to the deep end, I recommend Wallet.
The Dozens app has tools to help track short term spending that is better than nothing. It would be great if Dozens had a PSD2/Openbanking API so that it could be linked to one of the specialised platforms.
The big advantage of using these apps is that they help you to set budgets and then track and categorise your actual expenditure using data shared via OpenBanking. You will know of a daily basis whether you are on track and making tweaks is quick and easy. There are alerts to let you know when you might be straying too close to the edge.
Tip: For the tracking to work at its full potential, avoid paying by cash whenever possible. In fact, I rarely carry any cash! Pay regular bills by standing order or direct debit and use card payment (like your Dozens card!) for online shopping or High Street purchases.
Setting your first budget need not be daunting. Most people don’t benefit from a yearlong budget broken down into month-by-month cash flows. Keep it simple and build a budget plan for your average month. Start with the easiest figures - your income (wages and salaries, part-time or casual work) - some apps have a separate “pay day” feature where you enter your income details but it still feeds in to your budget.
Next tackle non-discretionary bills because they are usually regular(ish) monthly amounts and the bills are readily available or easy to spot in your bank statements - e.g. mortgage or rent payments, council tax, gas, electricity, water, TV licence, personal loans, credit card or overdraft debt, child care, student loans, mobile phone, buildings/contents insurance, etc.
Tip: Don’t include irregular income such as bonuses or share dividends. When they appear as income on the tracking, use it to clear some debt or, if you are debt free, allocate it to a savings pot (e.g. a weekend break for the family)
Tip: Some bills are not paid monthly, e.g. water bills are often once every six months whilst buildings insurance is an annual bill so just divide the annual cost by twelve. Council tax is often paid for ten months of the year - just enter the monthly amount (as though this amount was paid every month) because at the end of year you’ll have a surplus that can be used to offset the inevitable annual increase in council tax or other bills.
Next, tackle your household bills - groceries, household and cleaning, Sky TV subscription, broadband, any child related costs (clothes, schools meals, babysitting, pocket money), car maintenance, family entertainment, commuting, healthcare, dentistry/opticians/haircuts, etc…the list is endless and down to personal/household circumstances.
Tip: Don’t worry about capturing every little piece of expenditure. If you have missed anything, it will be picked up by the tracking feature of the apps and can be fed in to your budget figures easily. The tracking is actually the best way to highlight your “unconscious spending” such as just how much you spend at Costa’s or Pret on a weekday commute even though you tell everyone it’s less than £5 a day.
Finally, enter the amounts for discretionary spending and savings like holidays, Christmas, gifts, a new car, deposit for new home, etc, a rainy day fund, other savings and money you want to set aside for the future much as a wedding, driving lessons for the kids, university costs, your charitable donations, etc. The figures here can be less precise because they often reflect an aspiration rather than a set target, well at least until you set the date for that family holiday or wedding! Setting aside some money in a savings pot here will be your padding against any short-term disruptions such as we have just experienced with COVID19 or short periods off work or “in between jobs” or the need to replace a broken washing machine. I recommend that you do have a target for the “rainy day fund” which is enough money for you and your family to live on for at least 3-6 months, i.e. in case of unemployment or long-term illness or any other major disruption to your lives.
The budget is a tool for you to gain control of your finances and it will take time for you to see the benefit. Like many tools, it’s precision will develop over time as the data from the tracking is used to refine and update the budget. This incremental improvement in precision will boost your confidence and help diminish your money management problems.
Note: How you manage your money to fit your budget is a whole topic on its own. If your expenditure exceeds your income, you will have to make savings somewhere. Long-term overdrafts and credit card debt or payday loans will only make the problems worse. Hopefully, you have a bit left over each month and after all the hard work you put in to making and keeping to the budget, you’ll save that bit of money for something useful (like clearing debts or a family holiday) instead of being tempted to spend it for the sake of it. In fact, if you are tempted to make a significant unplanned purchase, look at your budget first to decide whether you can afford it and not your bank balance.
I’m sorry that became a bit long winded but I hope someone finds it useful.