Learning to budget to make future adventures happen

crunch_time · 23 October 2016 at 8:22PM

Evening everyone!

I've decided its time for a new diary after sort of losing steam with my old one.

In September 2013 our debt peaked at £29k. With some luck, a vague budget, changing priorities (kids), and some significant salary increases we have now got it down to circa £13-14k.

I have learned lots during the process but the thing that I feel is holding us back is our inability to stick to a budget (or, more accurately, create a realistic budget).

So basically the grand plan is to smash this 'debt hangover' as the hubs and I call I, as soon as possible so we can start using the money we currently use to pay it off for the adventures we have been planning pretty much all our adult lives. And also the things we should be doing at our age to be financially savvy like overpay the mortgage, contribute more into pension pots etc etc.

I love the support from the wonderful people on this forum and look forward to sharing this adventure with you all!

More info to follow!

Crunchy

Jacko_amz · 23 October 2016 at 9:06PM

Happy new diary! Good luck with your journey

Seasidegal58 · 23 October 2016 at 9:10PM

Hi crunchy

I've been reading your old diary and am subscribing to the new version!

Looking forward to reading more about your grand plan!

crunch_time · 23 October 2016 at 9:18PM

So.....I have used the same excel spreadsheet to budget for the last 8 years. When payments go out, I highlight the cell. Its great at predicting but doesn't tell me exactly where our money goes. We live pay check to pay check most of the time and use our credit cards to fill the gaps.

I have dabbled in the old YNAB but got lost and gave up and went back to my spreadsheet. I have just started a free trial for the new YNAB and got it on my phone now. The first step in this new journey is to commit to using it.

The second step is to design our budget to fit our lifestyle and any leftover money goes on debt. Before we have set unrealistic targets and then fitted our budget around them. It NEEDS to be the other way around

In essence we are frugal but live moment to moment with no rules so very easily have 'f' it moments and the credit card comes out due to lack of planning and foresight.

This is going to change.....

crunch_time · 23 October 2016 at 9:20PM

Thanks Seasidegal and Jacko_amz!

Grand plan coming right up!

Seasidegal58 · 23 October 2016 at 9:24PM

I luv YNAB ! Go on a few of their live webinars - I found them incredibly useful when I switched over to the new versions.

crunch_time · 23 October 2016 at 9:45PM

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ £1187
Partners monthly income after tax....... £3210
Benefits................................ 0
Other income............................ 0
Total monthly income.................... £4397

Monthly Expense Details[/b]
Mortgage................................ £613
Secured/HP loan repayments.............. £350
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. £118
Electricity............................. £71
Gas..................................... 0
Oil..................................... 0
Water rates............................. £48
Telephone (land line)................... £50.49 (and broadband)
Mobile phone............................ £44
TV Licence.............................. £12.12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... £400
Clothing................................ £100
Petrol/diesel........................... £100
Road tax................................ 0
Car Insurance........................... £68.52
Car maintenance (including MOT)......... £50
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... £456 average monthly cost.
Other child related expenses............ £45
Medical (prescriptions, dentist etc).... £29.5
Pet insurance/vet bills................. £13.24
Buildings insurance..................... £16.32
Contents insurance...................... 0
Life assurance ......................... £56.09
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ £32
Entertainment........................... £100
Holiday................................. 0
Emergency fund.......................... 0
itunes sub.............................. £9.99
Charities............................... £25
Total monthly expenses.................. £2808.27

Assets
Cash.................................... £1776 (£600 reserved for a puppy)
House value (Gross)..................... £200000
Shares and bonds........................ 0
Car(s).................................. £21336
Other assets............................ 0
Total Assets............................ £223112

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... £154527...(£613)......2.13
Hire Purchase (HP) debt ...... £21336....(£350)......0
Total secured & HP debts...... £175863....-.........- ? (I don't know this and am not bothered at the moment).

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................£11600.....£275.......3.89%
Sains Credit Card..............£1092......£50........0%
HSBC Credit card - Me..........£1100......£10........17.9%
HSBC Credit card -Hub..........£700.......£30........17.9%
Total unsecured debts..........£14492.....£365.......-

Monthly Budget Summary
Total monthly income.................... £4,397
Expenses (including HP & secured debts). £2,808.27
Available for debt repayments........... £1,588.73
Monthly UNsecured debt repayments....... £365
Amount left after debt repayments....... £1,223.73

Personal Balance Sheet Summary
Total assets (things you own)........... £223,112
Total HP & Secured debt................. -£175,863
Total Unsecured debt.................... -£14,492
Net Assets.............................. £32,757

This is things as they currently are but lots of changes need to be made. For example - no money for Christmas and birthdays at the moment and my childcare will vary monthly as I work in education so only pay term time.

More on the hubs and I and our lifestyle later. I need to go to bed!

Looking forward to my journey to financial freedom!

Crunchy xx

-taff · 24 October 2016 at 6:59AM

Good luck

I just switched to the new YNAB after trying the old one a couple of years ago. I hated the old one, just could not get it.
The new one is fab, I understand how it works, except for credit cards [going to have to sort that out sharpish] and I love the fact i can update the app whenever I spend. It's already saved me money because even though I had a rocky start with it [must have made about 5 new budgets n the first couple of months] I get it now, and it's saved me pounds and pounds already.

I know you have to pay for it, but in my case, it's money well spent, visually, it's so easy, much better than the spreadhseets I used to work with.

crunch_time · 24 October 2016 at 7:34AM

Morning!

Thanks for all the support so far! Will come back later to comment later but just wanted to say something about us while I had a minute.

So 'us' is the husband and I. We are in our mid thirties and have two wonderful children, a boy and a girl aged 4 and 2. We live in a lovely 3 bed semi in a rural village location that we know we will outgrow in the next couple of years. We have two rooms left to decorate and a whole garden to landscape next summer.

Husband used to be 'last of the big spenders' but has drastically changed his ways. He works from home in a well paid job and is incredibly supportive of me ding this diary to tackle our debt monster.

I am very frugal by nature but have lots of moments of we need this now so I'll just pop it on my credit card and sort it out later. Nine out of ten times we do need what is bought but I wish I could save up for things and be more measured in our approach.

We are doing this because we want to upgrade our house but also show our children the world. Our lack of ability to stick to a budget is getting in the way of things. Our high income and low outgoings mean this is totally achievable.

We have worked really hard to pay down our debt to its current levels. The loan is the final countdown. Obviously the first priority is sorting out the credit cards. The loan has 3.5 years left to run but we want to pay it off early but not until we have sorted out our budgeting and reliance on credit cards. It has covered the cost of things we no longer own or happened a long time ago and also are ready to give up - more on the loan later.

I have spent some time thinking about our habits and how we are going to shape our financials around them.

More on these next post...

It's half term but dd is having a taster morning at nursery so must go so I can get everyone ready!

Speak later
Crunchy xx

crunch_time · 24 October 2016 at 7:25PM

-taff wrote: »

Good luck

I just switched to the new YNAB after trying the old one a couple of years ago. I hated the old one, just could not get it.
The new one is fab, I understand how it works, except for credit cards [going to have to sort that out sharpish] and I love the fact i can update the app whenever I spend. It's already saved me money because even though I had a rocky start with it [must have made about 5 new budgets n the first couple of months] I get it now, and it's saved me pounds and pounds already.

I know you have to pay for it, but in my case, it's money well spent, visually, it's so easy, much better than the spreadhseets I used to work with.

Thanks -taff - I just have to stick with it and not expect quick fixes.

xxx

crunch_time · 24 October 2016 at 7:25PM

Seasidegal58 wrote: »

I luv YNAB ! Go on a few of their live webinars - I found them incredibly useful when I switched over to the new versions.

Thanks seasidegal! Ive got to stick with it this time.

Crunchy xx

Learning to budget to make future adventures happen

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