Learning to budget to make future adventures happen

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  • I concur with YNAB. It makes you think before you spend. And you're not supposed to look at your bank account but look at your YNAB budget and shifting the money around. One tip i've got is to look to see where you're haemorrhaging money. I assume you don't have £1,200 a month spare? Mines was food predominantly and I've budgeted a THIRD of what I spent in September for October. Another thing was cash withdrawals and not remembering what they were for. If you've a phone, note down what you're spending those cash amounts on. Apologies if you know this already but i spent at least £30 in September on car washes! 30 effing quid!! Mental.

    You could essentially get rid of all your credit cards in three months! Can you overpay the loan too? I totally get your "debt hangover" phrase and I think it's akin to weight loss - the momentum gets going, you start to lose some but there comes a time the momentum dies out and your plateau and takes that wee bit more effort to get rid of that annoying excess.

    All the best!!
    Starting Debt (31 Oct 2016) - £12,956 | Current Debt (31 Jan 2017) - £10,465 (20% paid)
  • crunch_time
    crunch_time Posts: 1,353 Forumite
    So I've spent some time today thinking about our habits and how we can develop new ones which will help us on our financial freedom mission. Here are our new habits which I am going to commit to from now on.

    - online shopping for delivery every Friday
    - batch cooking
    - consider the week no spend weeks except for husbands football which is budgeted for anyway.
    - Friday night beers only - 1 each.
    - plan out and budget for the months social events the month before - no spontaneous extras until we get a handle on this.
    - add a 'things I didn't budget for' line on YNAB.
    - YNAB, YNAB, YNAB

    If we can stick to these then we are winning.

    Next steps....credit cards.

    Crunchy xx
    19/8/19 vs now Current Total debt £14,188 Savings £2757
    Overdraft £1600 vs £1050
    HSBC1 £1900 vs £3868
    HSBC2 £4100 vs £3730
    Virgin 1 £3050 vs £2800
    House stuff and improvements £4460 Virgin 2 £2740
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,445
    First Anniversary First Post Name Dropper I've been Money Tipped!
    Ambassador
    Spreadsheets are great for budgeting. I have always used them and tracked spending initially using Microsoft money then intuit quicken (both now defunct I think) and in recent years a spending tracker app on my phone. This helps you to see where your money goes and it can even be held on different devices and updated via Dropbox so your husband could put it on his phone too so up to date.

    We always had a system for budgeting. After all essential outgoings were accounted for we split disposable income three ways. One third was long term saving so overpaying mortgage when rates were high and Avcs into pension and latterly stocks and shares isas for early retirement. One third was medium term savings for holidays, replacement cars, home improvements, moving house etc and we spent one third on entertainment, clothes, personal spends, gifts etc. Always worked for us.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • crunch_time
    crunch_time Posts: 1,353 Forumite
    Cailbhinn wrote: »
    I assume you don't have £1,200 a month spare?

    Definitely not!! But definitely reckon we can chuck at least £600 a month at debt for the next year.

    You could essentially get rid of all your credit cards in three months! Can you overpay the loan too?

    I have just run a budget and reckon you are right. And yes we can with the loan hence the nice even number.

    I totally get your "debt hangover" phrase and I think it's akin to weight loss - the momentum gets going, you start to lose some but there comes a time the momentum dies out and your plateau and takes that wee bit more effort to get rid of that annoying excess.

    All the best!!

    Thanks! My responses are in red!

    Crunchy xx
    19/8/19 vs now Current Total debt £14,188 Savings £2757
    Overdraft £1600 vs £1050
    HSBC1 £1900 vs £3868
    HSBC2 £4100 vs £3730
    Virgin 1 £3050 vs £2800
    House stuff and improvements £4460 Virgin 2 £2740
  • Hi crunchy. So many things in your diary resonate with me. I've only just started my diary and my journey but one thing that has struck me is my (our) complete inability to budget,create a realistic budget or stick to a budget. I definitely get the using credit card for gaps in budget and have most definitely been guilty of this.

    I definitely overspend on food budget and have way too many f it moments hence why we are in this sorry mess ��

    Good luck to you!
    Oct 2016 current unsecured debt £14461.31
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,445
    First Anniversary First Post Name Dropper I've been Money Tipped!
    Ambassador
    As you say your high income and relatively low mortgage should mean a good chunk can be thrown at your debt each month. Initially the credit cards, then the loan and then depending on interest rates your mortgage.

    It may help to focus on immediate objectives, so as you say a new house. Overpaying on your pension even by a small amount pays dividends in the long run though and it is the most tax efficient way of saving particularly for your OH who is high rate tax payer. Once the debt is cleared I would make that a priority. Showing your children the world can probably wait a few years if they only 2 and 4 now.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • Hi great start to your journey!

    I think I'd echo what others have said.

    I'd pay off both credit cards at 17.9% over the next few months. Pay the minimum to 0% for the time being until the higher cards are paid off then split your left over repayment amounts between that and the loan.

    I usually work out my budget for the month after payday (last weekday in month) for the following month. All my bills go out on the 1st aside from one which is the 6th and then I make a big overpayment at beginning too.

    I then challenge myself to work within the budget set for month and any extra goes towards overpayment too. It's amazing how quickly it all adds up :D
    Never underestimate the ability of what you can achieve.
    current debt
    £534.00/£12395.87
    since September 2016.
    :grinheart
  • crunch_time
    crunch_time Posts: 1,353 Forumite
    As you say your high income and relatively low mortgage should mean a good chunk can be thrown at your debt each month. Initially the credit cards, then the loan and then depending on interest rates your mortgage.

    That's the plan!! No time frame as the important thing is to stick to a budget.

    It may help to focus on immediate objectives, so as you say a new house. Overpaying on your pension even by a small amount pays dividends in the long run though and it is the most tax efficient way of saving particularly for your OH who is high rate tax payer. Once the debt is cleared I would make that a priority. Showing your children the world can probably wait a few years if they only 2 and 4 now.

    As soon as we are debt free we are going to look at all our finances and really plan hard for the future. The loose plan is by December 2017 as in January 2018, DD gets her free hours of nursery. If we have no nursery fees and no loan to pay we will have an extra £700-£800 a month extra to 'play, with. Didn't know that about hubs and pensions and high rate tax payer so thanks for the tip.

    Thanks! Replies in red!

    Crunchy
    19/8/19 vs now Current Total debt £14,188 Savings £2757
    Overdraft £1600 vs £1050
    HSBC1 £1900 vs £3868
    HSBC2 £4100 vs £3730
    Virgin 1 £3050 vs £2800
    House stuff and improvements £4460 Virgin 2 £2740
  • crunch_time
    crunch_time Posts: 1,353 Forumite
    Hi great start to your journey!

    I think I'd echo what others have said.

    I'd pay off both credit cards at 17.9% over the next few months. Pay the minimum to 0% for the time being until the higher cards are paid off then split your left over repayment amounts between that and the loan.

    I usually work out my budget for the month after payday (last weekday in month) for the following month. All my bills go out on the 1st aside from one which is the 6th and then I make a big overpayment at beginning too.

    I then challenge myself to work within the budget set for month and any extra goes towards overpayment too. It's amazing how quickly it all adds up :D

    That definitely the plan! The big start happened today....

    I CUT UP MY CREDIT CARD!!!
    19/8/19 vs now Current Total debt £14,188 Savings £2757
    Overdraft £1600 vs £1050
    HSBC1 £1900 vs £3868
    HSBC2 £4100 vs £3730
    Virgin 1 £3050 vs £2800
    House stuff and improvements £4460 Virgin 2 £2740
  • crunch_time
    crunch_time Posts: 1,353 Forumite
    I'll start from the beginning.

    I have had a credit card since I was 18 (16 years! 16 years?) and first went to uni and, like the most people have been in a cycle of maxing it out and balance transferring for along time. In 2010 it was up to £6000 and after paying just the minimum payment for over a year, my credit card company wrote to me to say they could either withdraw the credit or I stopped using it and paid off a larger amount each month. Of course I accepted the latter, got it down to £4000 and then consolidated it into a £8500 loan along with a car, a laptop (that I am currently tapping away on) and a new wooden floor for our old house in summer 2013.

    I lived credit card free essentially for 3 years and managed to clear a lot of other dent in that time such as overdrafts from when I went back to uni the second time round.

    I applied for a new one in November 2013 as I needed some bits for my job which I could claim back for and needed to buy them online so wanted to stay safe.

    For the last 2 years I have received an annual statement from my bank saying I have spent £10,000 on my credit card that year (£10000!!!!!!) incurred around £150 interest but paid it all back.

    The interest is small so its not about that but I don't want to live my life like this. I want to have 'money in the bank' rather than rely on credit cards to fill the gap.

    Ok its not even 'relying' on them its the 'buy now, pay later' attitude. So, I buy, feel guilty and quickly pay it back. I get the balance back to zero, say the card is for 'emergencies' and then rack it up again. And the cycle begins again.

    No more, I have had enough. I want money to stay in my bank account or savings account and I save up for things.

    The card has been cut up. It will be paid off as the first priority and then cancelled.

    Having a low alcohol beer to celebrate. Rock and roll!!

    Crunch
    19/8/19 vs now Current Total debt £14,188 Savings £2757
    Overdraft £1600 vs £1050
    HSBC1 £1900 vs £3868
    HSBC2 £4100 vs £3730
    Virgin 1 £3050 vs £2800
    House stuff and improvements £4460 Virgin 2 £2740
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