How to start sinking funds when you have no savings. #sinkingfunds #frugalliving #budget #freedom

[Music] hello everybody and welcome back to another video and if you're here for the very first time it's a pleasure to meet you I'm Jane and my husband Mike is behind the camera We're British early retirees we've got no debt we've paid off the mortgage and we live a Thrifty Frugal and money-saving life here in Britany in northw France now every Sunday we normally share an ask aspect of our money saving private life but I got asked a question um here on YouTube in a comment and I want to answer it today I really want to share this with absolutely everybody and the person who asks a question knows I'm going to share this and the question was this I would really like to start budgeting but how do you start saving syncing funds when you have no syncing funds there is always something that needs to be bought each month which means there's very little left to say what is your advice that's what we're going to have a talk about today now I asked this person about their circumstances I know they have a mortgage they have no other debt I know they have three children so I'm going to talk today specifically as if you the people watching also have children I've asked are there two people working yes there are two people working and I know they're already Savers because they're going to use a chunk of their savings to buy a new to them car to replace the car that they have so they've already got some savings habits there so let's go on with the video and talk about and answer this question how do you start sying funds when you have no thinking funds there's something that the lady said to me that really stuck with me and I think it could resonate with anybody out there and it's this there is always something that needs to be paid okay so if it's always something that needs to be paid sounds to me like there are things that are left off the budget so there are things that have to be paid because we always have to pay them so let's get into this in a bit more detail going to introduce the term syncing funds I want you to visualize this pot of money that you fill it up every single year you use it the pot empties down again and then you start filling it up again until you need it Christmas is an excellent example it's something that you spend once a year so you save up that pot of money and then you empty it and then you save it up again so that's what we mean by a sinking fund you might want to call it a saving po or an individual savings so all of those things that come up and if they always come up it means they're regularly coming up but the cars needs maintenance the house needs maintenance the children need something they needed it anyway these expenses were going to come up by looking up something called a savings pot or a sinking fund it means that we don't need to use debt that we don't need to use the unbudgeted money that we're actually going to turn this into a line in the budget and create an amount of money each month but to do that first we need to really look at everything that needs to go into our [Music] budget if you have never never ever written a detailed budget before you're going to do something that is going to take time effort teeth grinding maybe tears maybe feelings of regret or embarrassment you're going to need to go through this and I want you to get onto your online banking and I want you to look back at 3 to 12 months of every single penny you've spent including every time you've thrown out cash that you may not even be able to remember what you even spent it on I want you to go through and list for the entire year exactly how much you spent on food because a budget for food naturally exactly how much you spent on food might be different in your case might not be might be and I've got a big list here so do excuse me I want you to go through everything that you spent on the children all the clothes you've bought them anything you've bought them any money you've given them any school supplies you've bought them any activities you've sent them on the clothing the school uniform everything that you spent on the children that needs to go on one piece of paper you need to know the figure of how much these children cost not just the child care costs but everything absolutely everything you went to the zoo how much did you spend on them you went to the cinema how much did you spend when you got there I want you to look at every everything that you spent on replacing anything in your house what did you buy in this year I want you to look at everything that you spent on cushions I mean anything and everything that you've spent I want you to take a look at absolutely everything you spent last year on birthday presents on gifts on Christmas how much more money did you spend on food and drink at Christmas time you need that figure I want you to look at how much you spent on on your car how much did you spend on car fuel how much did you spend on putting air in the tires how much did you spend cleaning it how much did you spend paying to have it cleaned how much did you spend having it serviced or buying tires for it how much did you spend you need to know these figures because you might not know you might have a ballpark figure but that isn't enough if you really want to get on top of your finances you need to know how much did you spend on Amazon how much did you spend on getting things delivered to your house any online purchases that you made I want you to go through that and all of this this could take you more than a day and it and it means being honest with each other do you know what your partner has spent does your partner know what you have spent pause here write this down that you need to do this CU if you want to get on top of your budget you need to look at where all your money went in the past because if you have any regrets or feel that you've overspent or you didn't want to spend that amount of money or you weren't sure that you spent that much money or did I really spend that much money then that is the time that you need to be really really really honest and go well that's where my money went in the past but that's I'm drawing a line under that now because with my detailed budget I'm going to know where my money is going to go okay so you've got that far you've gone through everything that you spent in the last 3 to 12 months the more details that you can get from that the better cuz if you want to get on top of your money and you want to find money to save and you really want to get a handle with on this you need to have a absolutely detailed budget and I mean everything down to how much money are you going to spend next month on the children's pocket money sweets or treats how much money are you going to spend next month on clothes that's what a budget means a budget means you know where your money is going to go so first of all you need to know all of the money coming in you need to know the dates of the money coming in because that will have an impact on how you do your budget paid weekly budget weekly paid by monthly budget by monthly paid monthly you budget monthly and even if you are paid weekly or you are paid twice a month there will still be bills that you might have to pay every month so that's the next part you need to be honest with each other and there will be people watching who will say well I don't want to tell my partner what I earn he doesn't want to tell me what he earns that might be the case that might be the time that you turn around and say we need to be a bit more open about this I'm going to tell you that Mike and I have always had a joint bank account our money has always been together we don't have his money and my money we just have our money and our budget and it's the way that we work we love each other we love our money we love our budget and it all goes in together however I'm absolutely aware that that might not work for everybody I'm not here telling you what to do all I'm saying to you is you should know if there is a household budget and be honest with each other you should know how much money is coming in then you need to work out from there onwards how we're going to do the [Music] budget let's talk about budget now the hypothetical budget that I'm presenting to you today is a budget of people who want to start saving who want to build build up savings and you need to know the figures to begin with of what it costs you to live not live and have fun or live and go out or live and buy stuff but what does it actually cost you to live we frugal people call this the Bare Bones budget and these are the non-negotiables these are the things that you really don't have a lot of say about there's not a lot you can do with them we'll discuss the minor things that you can do with them but let's get into this so you need to know obviously your rent or your mortgage and you need to know when does that go out on what day so how much it is and what day next thing you need are all of your utilities your gas your electricity and your water you can have an impact on that line on your budget because those are down to consumption and your consumption is up to you the next one is property tax cancel tax or as here in Francis taxx font year how much is it do you pay it monthly can you pay it monthly do you pay it annually and that's another thing I'm going to put in here as well if you can make sure that everything's going out as an autopay as a direct debit as it just goes out each month and you know what it is and check it each month in case they've put it up or taken it down the next one do you pay separately as people do in other countries as we do here in France for your refuges recycling bill then you've got your all of your insurances you've got home insurance health insurance car insurance in the UK I know you have accident and emergency breakdown insurance on your car that is included on car insurance here in France you might have to pay an insurance for your children at school some people do here and if they are in child care um the next parts of things is do you have any things to do with your car do you have a car payment do you have a car lease one I know the people that I'm talking about right now you don't you're fantastic you're saving up paying cash for yours the next one are transport cost if you're in the UK it's quite normal to have a train pass to have a bus pass for your children to have bus passes or train passes to get to school or they might have any transport costs at all along with that transport costs is how much you are paying to put fuel into your car that includes paying to Park when you get to work and parking fees those are the type of things that people can leave out and always always always always when you're thinking of your fuel bill for your car always put in the maximum that it's going to be you never want to leave yourself under budgeted over budgeted is great at the end of the month you can move that little bit of flexible money somewhere you can't do it if you've under budgeted the next thing is all of your communication costs you have one mobile phone in the family two mobile phones in the family five mobile phones in the family and those again you control the cost of those you can because that's based on the data that you use you might have like Mike and I have you just have one payment and it's unlimited data unlimited calls but it's not like that for everybody can you shop around can you find a better deal same with TV what are you using what entertainment are you paying for on TV can you have less of it can you have one of it can you have none of it and that's especially if you're paying for pay-per-view packages those things so look at that again you can affect that part of your budget the next one do you have any pets how much does it cost to feed them do you have pet insurance or do you do what we do and put money aside to save for that and the big one which is can be often for some people as big as their mortgage is child care and of course in here we need to be really real about how much we are actually spending on food and when I'm talking about food here I mean the food that we have that we eat at home so if there's anything else that you think I've left out on this budget please leave me a comment below because I could have done but I'm these are just the ones that I could think of but that's just the bare bones budget can you see here that's just that's just the meat on the bones that's it that is it i w need to budget for anything else except the things that you absolutely have to now this is the bit that I hope crossing my fingers for anybody watching here that the money coming in is bigger than that amount of money that's going out and I want you to look at the figure that's left because the figure that's left at the moment is going out unplanned and unorganized onto all of those things that crop up each month we're going to talk about some high hypothetical examples of how we can stop that happening and make it more organized so you don't keep getting caught out before we go into the nuts and boats of talking about actual savings plans we need to talk about the bigger picture and the bigger picture is us as human beings and how we deal with ourselves as human beings because if you're going to change from being somebody who doesn't plan and is maybe disorganized so things just come up but they always come up that means you always have to pay for them is changing that and this is the difficult thing that I have to give a harsh message about and to begin with you may have to for at least one month maybe to if you can do it stick to your barebones budget as best you Absolut abely possibly can and especially for the very first month there's not a lot you can do if you know you haven't planned and something comes up like a birthday for your child or they suddenly need a new pair of school shoes but as best as possible it is my advice to anybody who is setting up a budget for the very very first time that for as long as you can to start with that you just stick to your bare bones budget my advice to you would be you only eat the food at home you don't go shopping you don't order anything offline for at least a month to just get yourself straight and it's the end of the first week of April now it's going to take you a few weeks to set up everything that I've suggested so far of all of those details and if you can keep going until the end of the month where you just hold back that spending for this month if you possibly can it will really help you because to turn from a spender to a saver is a shift in mindset and it is also a shift in habits it's not easy when I think of Mike and I in a distant past when we changed from being Spenders to Savers it wasn't easy and to begin with we were we were really slightly for laor like oh my gosh how long is this going to have to go on for and actually you know what I think about how long it took us to really sort our finances out it was about a year and if you live on average 77 years that was 177th of our life when it was a bit difficult and a bit challenging and it was all constantly about learning and it was like learning to balance on a bike and juggle and go forward all at the same time and not fall off it was it wasn't easy it really wasn't easy and it was changing us as who we were from people who were being spontaneous and let's go out and let's do things people go hang on a minute we will do it but we will save up first so it's a bit of a tough message if you can hold back any spending you can at least until the end of April on anything that isn't absolutely [Music] essential the next part it's a bit more Blue Sky Thinking it's a bit more forward thinking it's a bit more positive and this is where I want you to get a nice big piece of paper and I want you to start writing on it you're like a big scatter diagram if you will of all the things that you saw when you look back at everything that you'd spent of things that come up and I'm going to make a suggestion of the things that just come up the car needed fixing something in the house needed fixing you got sick you needed to pay for some medication the kids needed something for school suddenly the school trousers were Beyond repair and needed replacing the school uniform that sort of creeps up on you doesn't it suddenly it's July they've just taking a breather but you know don't forget six weeks they going back to school they need new school uniform new shoes new PE kit new sports equipment and it just happens doesn't it Christmas birthdays the dog gets sick the kids need a haircut husband needs a haircut suddenly remember you need new glasses again someone in the family's got a tooth faake you got to find the money for the dentist I want you to write down now all of the things that come up and then I want you to start circling the things that are absolute musts for you that you think are really important for you that you don't want to be caught out on again and that you want to tackle those as savings [Music] first [Music] when you have children and I remember this well cuz I've got to even though they're fully grown adults they are your biggest expense they are your constant expense and those are the those are the people in your lives that you're responsible for and you don't want to let them down so I'm going to use lots of examples of things that you're going to have to buy for the children and I'm using hypothetical numbers here so bear with me you might say who spends that amount or who spend so little that's entirely academic we're just talking about hypothetical numbers so let's talk about the children you got three children they've got Christmas and birthdays so if each child you spent 100 on for a birthday treat for a birthday party or on their birthday you all went to a special place you went to Legoland you went to an amusing m park for the day and that was that was the budget of 100 for each and then 100 for the birthday and 100 for Christmas and actually in reality that's not a lot of money these days for a gift for a child it's not a lot of money it's a huge amount of money for most of us but in real terms it's not a lot of money so if you got three children for those three birthdays and three Christmas presents and birthday treats or birthday parties that's £900 a year that's 75 a month so that could be your starting point you might just say that's my first sying fund might be the only one you do but you're going to make sure that the kids have a nice birthday and something for Christmas and you put that money aside each month your figure might be more than that yours might be less than that as I said it's completely hypothetical next part of this let's talk about family Christmas so we all spend more money at Christmas time some of us spend loads of money some of us don't spend so much but we always spend a bit differently at Christmas time so you might save up for an amount of money because you've got all the family coming for Christmas you've got people coming to stay with you so you might need a lot more money for food and I've got a hypothetical figure here of 300 to save up 300 for Christmas for all the Christmas food the boo the treats the chocolates everything and then you might have gifts not for the children but for other people you might set an amount that might be something you've never done do you set an amount per person per gift might only be a token amount and I've come up with here £10 per person you might have 10 gifts get that's 100 you've got to save that then you might want to spend say £20 on a bit more Christmas decorations few more Christmas decorations you might want to spend £30 on a real Christmas tree each year probably a lot more than that now you might want to spend another £20 a year on buying Christmas cards and postage to all of those people far and wide that you don't see on a daily basis so we add all of that up we've got a figure here 470 to save for Christmas and how much is that a month that's 40 a month it's much easier isn't it to put £40 a month aside then suddenly the Christmas turns up and you have to find this watch of money however it's April now and if you're going to be saving for Christmas and you want that amount of money it's going to be a lot more throughout this year but next year when you start on your Christmas pay for the next year it'll be a smaller amount of money and it will get easier so we looked at the Children's cost of birthdays and Christmas we've looked at the cost of Christmas now let's have a look at the cost of the children's needs for school cuz this is a massive expense especially if you're in the UK so it would not be unreasonable to say for some schools that to kick them out with all their new school uniform for every September which is like buying your child a whole new suit imagine that buying a suit to go to a wedding for this you're buying a suit for your children to wear to school at Laser the trouses the shirt the ties the underwear the socks all of it to go for that time and then it could easily spend 300 per child you've got three children here and then they need other things as well they might need their Sports kit for school that could be another 100 I mean a good pair of football boots can cost 100 these things add up don't they and then the children need other clothes I mean the other clothes you get many old place can't you you can go to the supermarket you can go to promark you don't have that choice with school clothes there's there is a specific list of clothes that you have to buy them so let's say conservatively here that you could spend and don't forget I'm using the word here could not will not have to you could could easily spend 500 per year on these growing children on clothing that they need but a good pair of school shoes 50 to1 and they can get through two pairs of those in a year it adds up and if you've been through your expenses as I asked at the beginning of the video you saw that your teenage boys are getting through three pairs of shoes a year that budget needs adjusting so I've got here a figure here and it's massive isn't it and British people say yes this is the kind of money we have to spend to send them to school dressed to look like the little Scholars they have to about 1,500 which breaks down to 125 a month it's much easier isn't it to save 125 a month than it is to find all of that money in one go or stick it all on your credit card and pay it off but that's not the end of the expenses for the children we've got more things here so in a year those children are going to have school trips they are going to have donations to take in they're going to have Book Day poetry day children in need comic relief Christmas fairs they're going to go on school trips their secondary school children they might have a whole week of school trips of curriculum enhancement week all of that in there as well would not be unreasonable to say all those little dribbles of money for school could cost at least 100 per child that year so that's another £300 to find that's £25 a month putting that money aside each month 25 a month 25 a month and you build it up so it's another isn't it it's another way of thinking about this then Mom and Dad you're going to work even if you're shopping from a charity Shop but you may not be able to wear those sucker clothes to work you might have a job where you have to wear protective clothing where you have to wear uh safety clothes where you might have to wear safety boots where you might have to buy your own safety goggles where you might have to go through a pair of overalls every day you might be an engineer you might have to go you might be a nurse you might have to have a change of uniform for every shift that you do and wash it and pay for all of those you might work in a very professional environment when I worked in a high school I went to I went to work every day in a suit I had to look smart I had to look tidy so all of these things you need to budget for that as well so add a conservative amount of money a very conservative amount to say to Mom and Dad to spend for the pair of you to spend 400 a year on clothing that's saving 35 a month and all of you out there thinks well that's a huge amount of money I've just bought two new bras two new bras each one was €35 so when it comes to things that you you you can't buy second hand you can't always get shoes second hand just thinking back to my jobs Mike was on his feet all day in his job I was on my feet all day in my jobs we both used to wear really sensible supporting shoes to work and we could spend £75 to100 on a pair of work shoes and yet sure we could get best part of a year out of them but you've still got to find that money and that's what I mean by saying to you it is much easier to work out in advance what you're going to spend cuz actually it's pretty likely that you you smart people out there aren't you you Thrifty Frugal and money-saving people you will find ways of making it work with the budget that you've [Music] got that's enough about talking about the hypothetical figures let's talk about the Practical applications of how you're physically going to do this for the foreseeable future if if anything breaks down in your house you're going to ask yourself some questions can I do without this for a bit can I do without this for a bit longer and can I do without this at all I'm also going to get you to look at the things that could go horribly wrong so foresee this cuz we've had this where our washing machine has broken down and then promptly after that the fridge freezer's gone put we've only had the money for one and we've had to balance this out and this is a suggestion I'm going to make to you is that if something goes horribly wrong look for it for free first literally put out a shout on a community page or a give and take for nothing page you know my washing machine has gone cook I've got three children has anyone got a washing machine that they are you know that's still working that they that they'll they'll take a few pounds for you know you could sell it to me for normal amount of money that will do me for a while somebody might even have one for free for you and we've done that in the past when we were absolutely determined to save when we needed anything that's where we went first so we had a washing machine that was defunct it was beyond repairing economic repair and we've got a secondhand one that kept us going for about a year until we saved up for the next one so that's options I want you to think of the next option I want you to think of is looking at every line in your budget so far and anything that you can adjust adjust can you get a cheaper mobile phone package can you get a cheaper internet package can you reduce your electricity gas and water consumption by 10% those little lines add up are you with your shopping your food shopping for example can you reduce that by 10% so if you're spending 500 a month that means reducing it by 50 giving you another 600 in a savings fund for the end of the year that £600 would pay for that big lump of money that we've discussed that you need to save up for for Christmas pick a sinking fund pick one pick one if you have none so far pick one it might be something to do with the children because they're always costing us money aren't they it could be something to do with the car you want to have the money in the bank somewhere for the next car service that could be £300 saved up it could be the new tires saved up for but pick something to start and get going with that so find out all the money you've got coming that you've spent previously be realistic about it write to yourselves that Bare Bones budget see if you can keep going with just that Bare Bones budget until the end of April try I'm not suggesting you can but you might be able to and then start to build those thinking funds and start finding out the numbers to begin with how much do you need to save realistically I'm really hoping this is making sense to everybody because it does to those of us who've got syncing funds it does to those of us who are saving but I can remember well what it's like to start those Savings in the first place because when you've actually got your budget going properly and everything on there is down there for absolutely everything including each line broken down in your sing funds and your long-term savings and your money into your emergency fund there is no money there's no money spare but you were were telling me like many people say there's no money spare anyway but this way there's no money spare when you need the children's new shoes when they need new school uniform when their birthday comes up when the car needs tires when the car needs a service when something needs fixing or replacing or you've got to pay for the dentist or you've got to buy new work clothes the money's there you're not scrabbling around in your budget going where am I going to get money for a new coat for the children to go back to school the money is there and why can I always feel that it's always better to each month see that zero in our budget knowing that it's all gone to savings that it's all gone to sinking funds that it's it's all gone to these very sensible things because it's those very sensible things that allows to have this lovely calm in our lives that there are no surprises so going back to what you said at the very beginning those things that come up they are going to come up and all we need to do so we don't have that lump in our throat moment of oh my gosh where am I going to get the money for for this or that is to start small start with aying fun start with one and then start with another one until you start to get more organized thank you so much for watching now I love the interaction that we have here in this Thrifty Frugal and money-saving Community leave some suggestions below for anyone who hasn't got any syncing funds hasn't got any savings pots haven't got those savings for things that you have to buy each year leave examples cuz I know some of you will have a holiday sinking fund or you will have a getting your hair done fund getting your nails done fund going out to lunch fund leave some comments below cuz I know other people reading them might find that really really helpful thank you so much for watching if you enjoyed today's video hit the like button that's all we ask for leave a comment and we'll see you soon bye for [Music] now [Music] a

Channel: Frugal Queen in France

Views: 17,764

Keywords: frugal, frugal queen, france, budget, money, food, brittany, bretagne, huelgoat, celtic, lifestyle, retired, retirement

Id: swVGtvDlnvg

Length: 35min 48sec (2148 seconds)

Published: Sun Apr 07 2024