How to pay for the extras in life

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pingin

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Having set up a proper budgeting regime using the YNAB (You Need A Budget) computer program, I now have more control of where my money goes—and how little I have! In a good month I'm lucky to have €50 in discretionary spending, although I could make some more savings on grocery spending and other categories.

Everything's accounted for but there's very little spare cash during any one month. I have an emergency cash category within the budget that can deal with unexpected bills. The problem is with the little extras. I want to buy a bicycle (about €300) and join a gym (€450). You might say I should just get a bike and be happy with it, but I'm just using this as an example of what can occur.

I have a reasonable amount in savings in the bank but that's meant to eventually go towards a mortgage deposit or for pension provision. I've been in the habit of dipping into this when some large expense comes up but I think that's a bad habit as it quickly depletes savings.

My point is that if I want to spend say €1000 on something, it would take twenty months to save up for it. Maybe that's just what's involved in living within your means!

Am I looking at it the right way or is there another approach I could take?
 
How about having an emergency fund in an instant access savings account so that you can dip into this when a large expense pops up. You can put your €50 per month into this. Start by taking maybe €500 from your savings.

I know you wont want to reduce your savings but its good to have a saftynet and you have to live a little too.
 
Good idea lidi. Never thought about it like that. I had always thought of an emergency fund as being for repairing a hole in the roof or getting a new engine for the car.
 
pingin said:
Good idea lidi. Never thought about it like that. I had always thought of an emergency fund as being for repairing a hole in the roof or getting a new engine for the car.
Click to expand...

While I agree that one account is fine, there's a difference between having to pay for the roof/new engine and the bike. The bike can wait whereas the roof can't.

I have a fund for emergencies, I like to have a €1,000 but it's more like €700. I had to dip into it today as I was caught by the UB payment mess.

A few years back I was about to go on hoildays when a filling fell out and I needed root canal. Holiday money was more or less gone. At the time it was a pain but at least I had it.

I tend to save for items like a bike etc. I have been meaning to start a coppers bottle. My mom had €800 collected after 8 months - she had help though. I know a few more who do this and they use the €300 or so as a treat every 6 months.
 
What works for us is to save regularly into accounts which are not our regular current/household account.. This way the money is kind of out of sight out of mind. We set up a regular savings account with EBS to fund large college expenses for our kids and this money can be accessed on maturity as well as at another time during the year without penalty. We also pay monthly into UB's high interest deposit account - a smaller amount monthly but it is a bit more flexible and you can access your money anytime - the good interest is only up to 15,000 but something like this might work for you if you set up a regular debit.

If you have been saving 50 euro per month and dont think you are getting anywhere fast, try saving 80 or 100 into an account like this and see if you can adjust your other expenses accordingly. Anyway, I think as you are already saving for a mortgage, another account for the irregular medium sized expenses would be a good idea - it works for us to separate our long term, mid term and short term goals and savings. .
 
You have put a lot of effort in controlling spending which is brilliant. It is also important to put some effort in to the earnings side. Are you sure that you are getting all the tax credits/ allowances that you are eligible for? Is there a way to increase your earnings possibly through training or education? Do you have anything that you really don't want but have never thought of selling?
 
Thanks for those suggestions ontour.

My tax credits are now up to date, though I do tend to be a bit slow in claiming them. I have skills in art/design which I could possibly use to earn more. It's a case of pushing myself to go and do it. As for selling things, there are some small bits and pieces. They wouldn't sell for much but they would get rid of some of the clutter in my life! It's all a matter of motivation.
 
For me I try to get the best value for every euro I spend. All our holidays, meals out, entertainment etc is now done on the groupon and such sites or local papers offers. All food shopping are only items on special offer and I do bulk buy when I see a good offer.
 
I know it doesnt answer your query, but Have you looked at the bike to work scheme?
 
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