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    • Hayley33
    • By Hayley33 6th Oct 16, 12:48 PM
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    Hayley33
    It's really hard
    • #1
    • 6th Oct 16, 12:48 PM
    It's really hard 6th Oct 16 at 12:48 PM
    We've got quite a lot on the go I won't take out two cars at the same time again and I've just put my debts all in one place and if I can stick to a budget they'll be cleared in 3 years and on paper be £400 p/m better off. I was just in my overdraft before so I just used to switch out what I needed etc, within reason. Now I don't want to get into it again. But I always seem to have such a lot on I can see this is going to be really hard to do. On top of all the bills, the two car payments, the sofa payment, the loan to pay off the debts, there's clothes that my child always seems to need, the school always want something they ask for money most weeks, there's the school dinner bill, there's the endless birthday parties at £5 in the card each time., there's work where there's the constant collections for people, there's the never ending food shopping bill...... I REALLY want to pay off my debts and stay out of my overdraft. I've also opened up a little savings account in the hope that I can build up some money for myself. It's seems absolutely impossible to stay within a budget, you always need the credit card on top. I can't though anymore. I only work part time now around my husbands shifts because we can't afford childcare so my pay isn't the best but it will do until she grows up ( it will have to do). How do you all do it?
Page 4
    • enthusiasticsaver
    • By enthusiasticsaver 12th Oct 16, 7:52 PM
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    enthusiasticsaver
    Yes. Three years. So now no credit cards (unless the bill is paid IN FULL). One car loan to finish in 2.5 years £200 PM back. Sofa to finish in 1.5 years interest free £50 PM back. And then finally the loan £150 PM back in 3 years. I have had my moment I will not get into the credit card/ overdraft cycle again. I'm so sick of it. Was making me ill worrying about money all the time. I do roughly work out before pay day all I've got going on for the month and take money out accordingly. I'm going to slimming world I'm wondering if this is a bit of a waste of money but I really need to get my weight down also.

    That food budget is for 2 adults & a child I don't think that's excessive roughly £60 per week. I sometimes struggle to keep to that also, food is so expensive.

    It seems unacheivable because £100 doesn't seem like much over a whole month.
    Originally posted by Hayley33
    When money was tight I did not use the credit card as paying it off in full the next month meant we were short of money then and tempted to use the card again the following month for living expenses. I do not think anyone who is on a tight budget should be using a credit card due to the way it throws budgets out when you have to pay it off the following month. Only exception is large item on 0% divided up over interest free period. We always had a rule in that only one item on interest free at a time. Everything else had to be saved up for.
    Countdown to early retirement on 21.12.17 2 months to go.
    • MrsSave
    • By MrsSave 12th Oct 16, 8:06 PM
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    MrsSave
    When money was tight I did not use the credit card as paying it off in full the next month meant we were short of money then and tempted to use the card again the following month for living expenses. I do not think anyone who is on a tight budget should be using a credit card due to the way it throws budgets out when you have to pay it off the following month. Only exception is large item on 0% divided up over interest free period. We always had a rule in that only one item on interest free at a time. Everything else had to be saved up for.
    Originally posted by enthusiasticsaver
    I think it depends on how 'in control' of things people are. I use my Tesco credit card for the majority of my purchases each and every month. What I've done is set up a separate account, and as soon as I buy something on the credit card, I update it as spent on YNAB, and then move money from my current account to this other account so that when the bill comes in I've got all the money sitting waiting. It doesn't affect next month's budget at all.

    It does mean being completely on top of things and making sure that there's no temptation to buy things that aren't part of that month's budget. So far it has worked for us, and we then use the points for days out/meals out. I'm not sure it would work as well for someone at the start of their debt free journey or someone who wasn't on top of their budget.
    YNAB - one of my favourite money saving tools
    Check out my debt free diary 'Mrs S, family life and debt' below:
    • Sanctioned Parts List
    • By Sanctioned Parts List 12th Oct 16, 9:55 PM
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    Sanctioned Parts List
    I think it depends on how 'in control' of things people are. I use my Tesco credit card for the majority of my purchases each and every month.
    Originally posted by MrsSave
    Exactly.

    But the only way it works is to have cast iron control over every aspect of your spending, track every account and every expense and be just a little bit obsessive about it.

    Apart from the market, which is cash only*, everything that we can spend on Amex, goes on Amex, and being a charge card it's paid automatically in full every month (because the penalty for not doing so is too much to contemplate). For anywhere that doesn't take Amex, we have another Visa credit card that they will take, and is also paid in full. The Amex takes its DD on the second of the month, and the visa on the eighth.

    As I've mentioned elsewhere, we don't budget. I track all household spending meticulously. Everything goes into KMyMoney** in mind-numbing detail - all debts, all savings, all spending. Takes about 5 minutes per day, but getting it set up in the first place took a solid weekend of manually entering a year's worth of bank and credit card statements - because the power of the software only comes out when it's got a good large set of data to analyse. (That then shone a light on all the waste and allowed us to take an axe to our spending.)

    Because of that, I can see that this month we're overspending on both Amex and Visa as our relocation-to-the-UK costs bite. But I can see that all that will happen is that I will have to pull some money out of a buffer account for a few days between one DD being taken and some expenses arriving in case a utility company with a history of taking their DD on arbitrary days does so again. In the meantime I can pick up the pace on freelance work to try to make up the difference.

    That's the advantage of 3 weeks notice.

    If I didn't track and analyse spending like this, then using credit cards would be bad, wrong and dangerous.

    * When accounting for cash, I track cash withdrawals and treat them as if the whole value of the withdrawal is immediately spent.
    ** I don't use YNAB because, well, I don't budget, I like free software, and I don't see that it offers anything that free alternatives don't.

    PS: I think that might have finally answered the question, "How do you guys do it?"... at least in this little corner of the world

    • EssexHebridean
    • By EssexHebridean 12th Oct 16, 10:36 PM
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    EssexHebridean
    That's an interesting take on it SPL - not sure I'd have the patience or the self discipline to keep it up mind you! I do like a spreadsheet - our mortgage OP's were all input into a spreadsheet so we could instantly fiddle with figures and see the impact of a few £'s here and there extra paid over...that ability to see what effect we were having was what drove us on, it really did make a difference seeing how much we were saving over all, as well!

    I'm not a fan of chargeable budgeting software either I have to admit. It seems totally counter-intuitive to me to pay for something to help you save money, but each to their own and if it works for people then good for them.

    As for CC use - a cashback card can be a wonderful thing used correctly. If you're on a tight budget though you really do have to keep a tally of every penny that goes on it - ideally paying off each item as it hits the card account. That way you still earn the cashback but don't risk things getting out of control. If I was starting from a point where my outgoings were exceeding my incomings though I wouldn't even contemplate using the CC - I'd close the account, as the temptation in a tight month would just be too great.
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£544.67 (17/10/17)
    • Sanctioned Parts List
    • By Sanctioned Parts List 12th Oct 16, 11:06 PM
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    Sanctioned Parts List
    That's an interesting take on it SPL - not sure I'd have the patience or the self discipline to keep it up mind you!
    Originally posted by EssexHebridean
    5 minutes per day isn't such a chore. I dealt with today's receipts (2 taxis, a cash withdrawal and a swift pint after work) while waiting the 2 minutes for dinner to warm up in the microwave - such is the joy of commuting. I originally thought I'd "use it to get on track" and then hopefully would have developed good instinctive habits and could stop with the tracking. In fact, every time I've stopped putting the numbers in the computer, our spending increases by 50% overnight.

    It seems knowing what I have today, tomorrow, and at the end of the month is the spending equivalent of bromide.

    I do like a spreadsheet
    Originally posted by EssexHebridean
    I do, too - our "budget" such as it is, is a spreadsheet 3 columns wide and 20 rows long, that details our monthly income, scheduled payments and "everything else" allowance. That sets what goes into the buffer account, which happens on pay day. I'm quite relaxed about using the buffer account, provided our 3 month moving average is roughly the "everything else" allowance.

    I'm not a fan of chargeable budgeting software either I have to admit. It seems totally counter-intuitive to me to pay for something to help you save money, but each to their own and if it works for people then good for them.
    Originally posted by EssexHebridean
    I'll never say "don't use it"... but alternatives do exist.


    As for CC use - a cashback card can be a wonderful thing used correctly. If you're on a tight budget though you really do have to keep a tally of every penny that goes on it - ideally paying off each item as it hits the card account. That way you still earn the cashback but don't risk things getting out of control. If I was starting from a point where my outgoings were exceeding my incomings though I wouldn't even contemplate using the CC - I'd close the account, as the temptation in a tight month would just be too great.
    Originally posted by EssexHebridean
    This was one of the longer discussions my wife and I had - whether moving to a charge-card, i.e. post-pay spending was a good idea or not. Advantages were air-miles (we use them, being a fairly mobile family) and early warning of expensive months, disadvantage was risk of spending beyond our capacity to repay.

    We'd been tracking through the computer for close to a year before I finally took the card. In that first month, out of fear, we were positively miserly and over-saved, which made the transition easier.

    • MrsSave
    • By MrsSave 12th Oct 16, 11:12 PM
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    MrsSave
    I think that this is surely showing that there are many different ways to work at becoming debt free, and no 2 people will agree 100%. That's completely fine, though, as long as people are doing what works for them.

    Hayley, it's ok to dismiss some pieces of advice, but remember most people posting will have been in this situation for a long time and have worked hard at becoming debt free/mortgage free/decreasing debt so can see what things aren't likely to work as they've been there themselves. It's up to you how much you take on board and how many changes you make.
    YNAB - one of my favourite money saving tools
    Check out my debt free diary 'Mrs S, family life and debt' below:
    • EssexHebridean
    • By EssexHebridean 28th Oct 16, 6:18 PM
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    EssexHebridean
    How are things going Hayley?
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£544.67 (17/10/17)
    • Purplemumof2
    • By Purplemumof2 28th Oct 16, 9:43 PM
    • 5,226 Posts
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    Purplemumof2
    I did, hopefully it'll be gone soon.
    Official DFW Nerd Club - Member no. 791 - Proud to be dealing with my debts
    MBNA: £7250.00 Cap 1: £529.05 BC: £5196.94

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    • Hayley33
    • By Hayley33 14th Mar 17, 11:05 PM
    • 50 Posts
    • 26 Thanks
    Hayley33
    Only now seeing this! Pleased to report back its march im still out of my overdraft, I'm trying my best to live within my means

    I'd love a lottery win though things are soooo expensive!
    • armchairexpert
    • By armchairexpert 15th Mar 17, 1:08 AM
    • 651 Posts
    • 4,164 Thanks
    armchairexpert
    Hi Hayley!

    With the SOA, one thing strikes me. Let's assume that all of your bills are as cheap as they can be, and that's absolutely fine, don't post them up.

    But you're lumping all of your non-bill expenses into "spending". So that includes everything from children's clothes, school costs, Christmas obligations, MOT to takeaways and haircuts. This is where the spending diary is really important.

    I'm a big YNAB fan, and I won't preach about it here, but one thing it does is to separate those out. You said upthread that you keep getting hit by big expenses, like new furniture and car - but if your budget separated out those expenses from the day-to-day indulgences like a takeaway, you could see if you could justify the latter this month.

    For example:
    I know that my kids' school fees are due annually, and it's about $1000. That's $80 a month that I can't spend on things I don't need, because I will need that money later. I also know that the birthday parties my girls get invited to, plus their own birthdays (including throwing a modest party), plus my husband's birthday and mine and various relatives, add up to about $1200/year, so that's another $100/month I can't spend on things I don't need. Things like the MOT, or replacing a whitegood, or annual school fees, aren't 'emergencies' or even unexpected expenses; they're part of your budget.

    For the next three months, I'm unlikely to need new clothes for either of my girls, but that doesn't mean that my [income - bills and rent and groceries] is free for me to spend, because then I'll hit a new season and my eldest will need a whole bunch of things at once.

    If your budget is merely "things I absolutely have to pay every month" and "everything else", you're always going to spend money on the wrong things and then get blindsided by the things that come up. If 300/month is what you have left over after bills, phone and petrol, you absolutely do NOT have 300 a month for bill paying, because you're also buying clothes, presents, school costs and food (as per your original post). A spending diary might show you that in fact, when you've thought of everything you have to spend, you only have 20 a month left over.
    MFW diary here. 1 Feb 2017 $229,371 - MFD Feb 2043 aiming for May 2028
    14 August 2017 - Refinanced: $220,000
    September 2017 - $218,597.77
    • itchyfeet123
    • By itchyfeet123 15th Mar 17, 8:50 AM
    • 391 Posts
    • 454 Thanks
    itchyfeet123
    If your budget is merely "things I absolutely have to pay every month" and "everything else", you're always going to spend money on the wrong things and then get blindsided by the things that come up.
    Originally posted by armchairexpert
    That's incredibly insightful! As a single person with a decent income, I've never set up a budget for discretionary expenses. I know how much my fixed expenses are and I arbitrarily divided the rest of my income into an amount for saving and an amount for spending. The spending amount covers everything discretionary -- groceries, transport, entertainment, clothes, etc -- but, as you point out, some kinds of spending, like clothes or a weekend trip -- cost £0 most months but £lots in one or two months. It would certainly be less painful, and probably curb some extravagance, to set aside a planned amount each month instead of living on lentils or raiding my savings when it's an expensive month.
    • EssexHebridean
    • By EssexHebridean 15th Mar 17, 10:52 AM
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    EssexHebridean
    That's incredibly insightful! As a single person with a decent income, I've never set up a budget for discretionary expenses. I know how much my fixed expenses are and I arbitrarily divided the rest of my income into an amount for saving and an amount for spending. The spending amount covers everything discretionary -- groceries, transport, entertainment, clothes, etc -- but, as you point out, some kinds of spending, like clothes or a weekend trip -- cost £0 most months but £lots in one or two months. It would certainly be less painful, and probably curb some extravagance, to set aside a planned amount each month instead of living on lentils or raiding my savings when it's an expensive month.
    Originally posted by itchyfeet123
    Yes - something we've done from day 1 is to budget an amount each month for "fun" - so that might be a meal out, a trip into town or towards a weekend away. Either way, having that money there means we're not raiding savings every time something like that comes up. Car expenses, too - we have 2 cars so the monthly set-aside for depreciative costs and annual spends needs to be quite high. I can't imagine it working for me if those costs were just lumped in with everything else.

    And yes - a proper budget DOES mean accounting for stuff like that - otherwise it's not a budget!

    Well done for staying out of your OD Hayley - have you reduced the agreed OD level down to remove the temptation to dip back in? How are your emergency fund savings coming along?
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£544.67 (17/10/17)
    • Hayley33
    • By Hayley33 17th Mar 17, 10:16 PM
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    Hayley33
    No I haven't reduced the OD but I'm
    Determined not to end up back in it! I save for Christmas, I put a bit away for my little one, I have been trying to save a little bit aside but I think I'll struggle with that until all our debts are finished as I don't have loads to put aside and I have a lot to pay out!
    Me and the hubby discussed this tonight and we will definitely be building up a nice little pot when our debts finish, I will try to put a bit away as and when I can before too!
    • Bedsit Bob
    • By Bedsit Bob 17th Mar 17, 10:29 PM
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    Bedsit Bob
    How old is the little one?
    My job is Top Secret. Even I don't know what I'm doing.

    Amount I have so far denied the BBC - £1161
    • Hayley33
    • By Hayley33 17th Mar 17, 11:25 PM
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    Hayley33
    Hi bob. She is 7 and a half.
    • Bedsit Bob
    • By Bedsit Bob 17th Mar 17, 11:39 PM
    • 9,710 Posts
    • 51,000 Thanks
    Bedsit Bob
    Hi bob. She is 7 and a half.
    Originally posted by Hayley33
    When you said "little one", I was thinking 1-2 years old, so she wouldn't want much by way of presents.
    My job is Top Secret. Even I don't know what I'm doing.

    Amount I have so far denied the BBC - £1161
    • chevalier
    • By chevalier 20th Mar 17, 4:12 AM
    • 7,743 Posts
    • 17,992 Thanks
    chevalier
    have you thought about doing surveys and opting for them to be paid in amazon vouchers or similar. You could save these for xmas and either use them as gifts or buy things on amazon. would mean you had the xmas actual cash to pay off a lump of a debt
    good luck
    chev
    I want a job that is less than an hour driving away from my house! Are you listening universe?
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