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  • FIRST POST
    • crunch_time
    • By crunch_time 23rd Oct 16, 8:22 PM
    • 1,043Posts
    • 3,065Thanks
    crunch_time
    Learning to budget to make future adventures happen
    • #1
    • 23rd Oct 16, 8:22 PM
    Learning to budget to make future adventures happen 23rd Oct 16 at 8:22 PM
    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
    LBM June 2014. Original debt £23,555 vs Now £0 Paid off in April 2017.
    NEW DEBT: £7500 Now: £7500 Paid off £0 Long term savings £1240
Page 1
    • Jacko_amz
    • By Jacko_amz 23rd Oct 16, 9:06 PM
    • 250 Posts
    • 301 Thanks
    Jacko_amz
    • #2
    • 23rd Oct 16, 9:06 PM
    • #2
    • 23rd Oct 16, 9:06 PM
    Happy new diary! Good luck with your journey
    Learning to be alone and that its ok!


    Tesco Loan - 10600
    • Seasidegal58
    • By Seasidegal58 23rd Oct 16, 9:10 PM
    • 1,173 Posts
    • 6,596 Thanks
    Seasidegal58
    • #3
    • 23rd Oct 16, 9:10 PM
    • #3
    • 23rd Oct 16, 9:10 PM
    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!
    Finally Debt Free! - July 2016
    Finished Emergency Fund- £10,000 April 2017

    Next Scrimpy Goal - Save for New Kitchen!
    My debt free diary - " Paid off the £31,000 - BUT still scrimping!"
    • crunch_time
    • By crunch_time 23rd Oct 16, 9:18 PM
    • 1,043 Posts
    • 3,065 Thanks
    crunch_time
    • #4
    • 23rd Oct 16, 9:18 PM
    Thoughts on budgets.....
    • #4
    • 23rd Oct 16, 9:18 PM
    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.....
    LBM June 2014. Original debt £23,555 vs Now £0 Paid off in April 2017.
    NEW DEBT: £7500 Now: £7500 Paid off £0 Long term savings £1240
    • crunch_time
    • By crunch_time 23rd Oct 16, 9:20 PM
    • 1,043 Posts
    • 3,065 Thanks
    crunch_time
    • #5
    • 23rd Oct 16, 9:20 PM
    • #5
    • 23rd Oct 16, 9:20 PM
    Thanks Seasidegal and Jacko_amz!

    Grand plan coming right up!
    LBM June 2014. Original debt £23,555 vs Now £0 Paid off in April 2017.
    NEW DEBT: £7500 Now: £7500 Paid off £0 Long term savings £1240
    • Seasidegal58
    • By Seasidegal58 23rd Oct 16, 9:24 PM
    • 1,173 Posts
    • 6,596 Thanks
    Seasidegal58
    • #6
    • 23rd Oct 16, 9:24 PM
    • #6
    • 23rd Oct 16, 9:24 PM
    I luv YNAB ! Go on a few of their live webinars - I found them incredibly useful when I switched over to the new versions.
    Finally Debt Free! - July 2016
    Finished Emergency Fund- £10,000 April 2017

    Next Scrimpy Goal - Save for New Kitchen!
    My debt free diary - " Paid off the £31,000 - BUT still scrimping!"
    • crunch_time
    • By crunch_time 23rd Oct 16, 9:45 PM
    • 1,043 Posts
    • 3,065 Thanks
    crunch_time
    • #7
    • 23rd Oct 16, 9:45 PM
    Current budget
    • #7
    • 23rd Oct 16, 9:45 PM
    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
    LBM June 2014. Original debt £23,555 vs Now £0 Paid off in April 2017.
    NEW DEBT: £7500 Now: £7500 Paid off £0 Long term savings £1240
    • -taff
    • By -taff 24th Oct 16, 6:59 AM
    • 7,168 Posts
    • 5,159 Thanks
    -taff
    • #8
    • 24th Oct 16, 6:59 AM
    • #8
    • 24th Oct 16, 6:59 AM
    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
    • By crunch_time 24th Oct 16, 7:34 AM
    • 1,043 Posts
    • 3,065 Thanks
    crunch_time
    • #9
    • 24th Oct 16, 7:34 AM
    • #9
    • 24th Oct 16, 7:34 AM
    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
    LBM June 2014. Original debt £23,555 vs Now £0 Paid off in April 2017.
    NEW DEBT: £7500 Now: £7500 Paid off £0 Long term savings £1240
    • crunch_time
    • By crunch_time 24th Oct 16, 7:25 PM
    • 1,043 Posts
    • 3,065 Thanks
    crunch_time
    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.
    Originally posted by -taff
    Thanks -taff - I just have to stick with it and not expect quick fixes.

    xxx
    LBM June 2014. Original debt £23,555 vs Now £0 Paid off in April 2017.
    NEW DEBT: £7500 Now: £7500 Paid off £0 Long term savings £1240
    • crunch_time
    • By crunch_time 24th Oct 16, 7:25 PM
    • 1,043 Posts
    • 3,065 Thanks
    crunch_time
    I luv YNAB ! Go on a few of their live webinars - I found them incredibly useful when I switched over to the new versions.
    Originally posted by Seasidegal58
    Thanks seasidegal! Ive got to stick with it this time.

    Crunchy xx
    LBM June 2014. Original debt £23,555 vs Now £0 Paid off in April 2017.
    NEW DEBT: £7500 Now: £7500 Paid off £0 Long term savings £1240
    • Cailbhinn
    • By Cailbhinn 24th Oct 16, 7:40 PM
    • 88 Posts
    • 275 Thanks
    Cailbhinn
    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 Oct 2016) - £12,956 (0% paid)
    • crunch_time
    • By crunch_time 24th Oct 16, 7:41 PM
    • 1,043 Posts
    • 3,065 Thanks
    crunch_time
    Habits
    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
    LBM June 2014. Original debt £23,555 vs Now £0 Paid off in April 2017.
    NEW DEBT: £7500 Now: £7500 Paid off £0 Long term savings £1240
    • enthusiasticsaver
    • By enthusiasticsaver 24th Oct 16, 7:43 PM
    • 4,837 Posts
    • 9,138 Thanks
    enthusiasticsaver
    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.
    2 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • crunch_time
    • By crunch_time 24th Oct 16, 7:46 PM
    • 1,043 Posts
    • 3,065 Thanks
    crunch_time
    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!!
    Originally posted by Cailbhinn
    Thanks! My responses are in red!

    Crunchy xx
    LBM June 2014. Original debt £23,555 vs Now £0 Paid off in April 2017.
    NEW DEBT: £7500 Now: £7500 Paid off £0 Long term savings £1240
    • Worriedaboutmoney
    • By Worriedaboutmoney 24th Oct 16, 7:54 PM
    • 38 Posts
    • 94 Thanks
    Worriedaboutmoney
    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!
    • enthusiasticsaver
    • By enthusiasticsaver 24th Oct 16, 8:08 PM
    • 4,837 Posts
    • 9,138 Thanks
    enthusiasticsaver
    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.
    2 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • NeverUnderestimate
    • By NeverUnderestimate 24th Oct 16, 8:12 PM
    • 106 Posts
    • 173 Thanks
    NeverUnderestimate
    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
    Never underestimate the ability of what you can achieve.
    current debt
    £534.00/£12395.87
    since September 2016.
    • crunch_time
    • By crunch_time 25th Oct 16, 6:35 PM
    • 1,043 Posts
    • 3,065 Thanks
    crunch_time
    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.
    Originally posted by enthusiasticsaver
    Thanks! Replies in red!

    Crunchy
    LBM June 2014. Original debt £23,555 vs Now £0 Paid off in April 2017.
    NEW DEBT: £7500 Now: £7500 Paid off £0 Long term savings £1240
    • crunch_time
    • By crunch_time 25th Oct 16, 6:39 PM
    • 1,043 Posts
    • 3,065 Thanks
    crunch_time
    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
    Originally posted by NeverUnderestimate
    That definitely the plan! The big start happened today....

    I CUT UP MY CREDIT CARD!!!
    LBM June 2014. Original debt £23,555 vs Now £0 Paid off in April 2017.
    NEW DEBT: £7500 Now: £7500 Paid off £0 Long term savings £1240
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