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    • anniek42
    • By anniek42 3rd Oct 17, 8:21 PM
    • 9Posts
    • 1Thanks
    anniek42
    How do I keep track of it all??
    • #1
    • 3rd Oct 17, 8:21 PM
    How do I keep track of it all?? 3rd Oct 17 at 8:21 PM
    Hello,
    I am after some advice please...I am a sole trader and single parent to teenager and use my normal bank account for all incoming and outgoing payments. I just find it rather confusing as am at the bank nearly every day trying to keep account from going over overdraft of £1750.
    I have about 20 direct debits coming out at different times of the month so am looking everyday to balance things. I have been trying for ages to clear overdraft but every time I seem to be making headway some expense comes up!
    The other problem is I have about £17k debts over 4 credit cards and catalogue,
    I have no savings, no emergency fund, no pension and interest only mortgage.
    I am up to date with all payments so am not in debt crisis but can't seem to keep tabs on everything. I have been reading the debt free diaries but just feel like I don't know where to start and at the end of the day because my income is roughly the same (erratic at certain times of year) but never a set amount I am finding it it all too much.
    I suffer a bit with anxiety and depression and am finding it hard to keep on top of everything? Any advise please?..
Page 1
    • Pixie5740
    • By Pixie5740 3rd Oct 17, 8:31 PM
    • 11,196 Posts
    • 15,643 Thanks
    Pixie5740
    • #2
    • 3rd Oct 17, 8:31 PM
    • #2
    • 3rd Oct 17, 8:31 PM
    You have 3 main options:
    1. Budgeting software
    2. Spreadsheets
    3. Good ol' pen and paper

    Personally I used YNAB to track every penny coming in and out of the household but there are others such as EveryDollar, Mint, Wally to name but a few. It's just a case of finding which one works for you. I could create a spreadsheet to track my income and expenditure but I like YNAB.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • Ilona
    • By Ilona 3rd Oct 17, 8:44 PM
    • 1,961 Posts
    • 6,694 Thanks
    Ilona
    • #3
    • 3rd Oct 17, 8:44 PM
    • #3
    • 3rd Oct 17, 8:44 PM
    I used to have a small business as a sole trader, and kept very simple books for that, money in and money out. Logged all sales and filed all receipts. My accountant did the tax return. Presumably you do something similar. It's ok to keep the money in the same account as long as you separate it on paper.

    You need to keep records for your personal and household income and expenditure in the same way, and as it has been mentioned, you can do it on the computer or write it all down.

    As well as keeping track that way, you can also write a personal spending diary. If you have no spare cash to put towards an emergency fund and savings you need to stop spending for a while, or up your income.

    Ilona
    I love skip diving
    • anniek42
    • By anniek42 3rd Oct 17, 8:45 PM
    • 9 Posts
    • 1 Thanks
    anniek42
    • #4
    • 3rd Oct 17, 8:45 PM
    • #4
    • 3rd Oct 17, 8:45 PM
    Thanks pixie for replying...do you complete every night your income/outgoings? It just all seems such a mess!
    • anniek42
    • By anniek42 3rd Oct 17, 8:49 PM
    • 9 Posts
    • 1 Thanks
    anniek42
    • #5
    • 3rd Oct 17, 8:49 PM
    • #5
    • 3rd Oct 17, 8:49 PM
    Thanks Ilona.. yes I do have my accountant that does it for me as I keep it all separate. I do keep a spending diary I just think I am overwhelmed with it all. I seem to be constantly popping to shops for things as seem incapable of doing a weekly shop either because I am balancing things so finely or just not budgeting properly!
    • Pixie5740
    • By Pixie5740 3rd Oct 17, 9:00 PM
    • 11,196 Posts
    • 15,643 Thanks
    Pixie5740
    • #6
    • 3rd Oct 17, 9:00 PM
    • #6
    • 3rd Oct 17, 9:00 PM
    Thanks pixie for replying...do you complete every night your income/outgoings? It just all seems such a mess!
    Originally posted by anniek42
    With YNAB I can schedule all my regular payments (mortgage, utilities, etc) to come out weekly, monthly, 4-weekly and then for the non-regular payment I update them daily. I have the YNAB app on my phone so I can update it when I'm out and about. It helped me get a handle on exactly how much I was spending popping into Co-op on the way home or the odd coffee or in the pub on a Friday after work. I'm sure others have had similar success using other apps but as I've never used them I can't attest to how user friendly they are.

    Then, usually weekly, I reconcile YNAB with my accounts. I even have an account called "My Purse" and there's something strangely satisfying about YNAB saying my purse out to have £17.36 (for example) in it and there being exactly £17.36 there.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • anniek42
    • By anniek42 3rd Oct 17, 9:09 PM
    • 9 Posts
    • 1 Thanks
    anniek42
    • #7
    • 3rd Oct 17, 9:09 PM
    • #7
    • 3rd Oct 17, 9:09 PM
    I think I will look into YNAB.. I think I tried the free trial but only had my iPad and it wasn't that good then.
    • Dobbibill
    • By Dobbibill 3rd Oct 17, 9:38 PM
    • 2,537 Posts
    • 3,631 Thanks
    Dobbibill
    • #8
    • 3rd Oct 17, 9:38 PM
    • #8
    • 3rd Oct 17, 9:38 PM
    You would benefit from creating a SOA.

    If your income is irratic, base it on a worse case scenario.

    Also try a few different accounts - business, bills and spending should get you started.

    Leave your overdraft account as the bills account and include any charges/interest for the overdraft when calculating your bills and also any amount you are able to pay off it to reduce it each month. Deposit that monthly - bills are able to go out whenever they are due because you've put the money there for them. Having them staggered will be a benefit if you are paid weekly.
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    • datlex
    • By datlex 4th Oct 17, 8:06 AM
    • 1,449 Posts
    • 1,235 Thanks
    datlex
    • #9
    • 4th Oct 17, 8:06 AM
    • #9
    • 4th Oct 17, 8:06 AM
    You would benefit from creating a SOA.

    If your income is irratic, base it on a worse case scenario.

    Also try a few different accounts - business, bills and spending should get you started.

    Leave your overdraft account as the bills account and include any charges/interest for the overdraft when calculating your bills and also any amount you are able to pay off it to reduce it each month. Deposit that monthly - bills are able to go out whenever they are due because you've put the money there for them. Having them staggered will be a benefit if you are paid weekly.
    Originally posted by Dobbibill
    Whilst I agree with this person that separate accounts are a good idea, I don't agree with keeping the over draft account as your bills account. Treat the overdraft account as a bill. So you would 3 additional accounts.
    • FaithFay1992
    • By FaithFay1992 4th Oct 17, 8:29 AM
    • 5 Posts
    • 4 Thanks
    FaithFay1992
    Hi Annie,

    Poor you. That sounds like a lot of stress. I can't speak for what is best in terms of what needs to be paid first due to rates etc. All I know is that overdrafts are the devil!

    I was always in mine and when I cleared it I went into the bank and told them to block me from getting one again and they have.

    I still have a personal loan that I need to pay off. What I found helped (well probably not in the grand scheme of things!) but to take back control of my finances and gain some confidence I went through my direct debits with a fine toothed comb and was shocked at wjay I found. Gym memberships, things like Experian monthly payments, insurance from when I was renting before I bought my house! It was silly the things I was paying for that i hadn't even realised simply because I was scared to check my internet banking all the time. Is there any DDs at all you can think of you don't need at the moment? sky? Things like that you can do without for a couple of months? If you don't need it to survive then get rid.

    OH had an issue not knowing where he stood financially because all of his DDs were all scattered over the month and even with spreadsheets and dates it's still hard to keep track even if you check everyday. What he did is ring as many of them as possible who agreed to change all the dates to the 1st of the months so they come out a day after he gets paid, all of them at once so he knows what money is left in his account really is what is left after all bills.
    • EssexHebridean
    • By EssexHebridean 4th Oct 17, 10:26 AM
    • 8,214 Posts
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    EssexHebridean
    I agree with Dobbibill - your first step needs to be an SOA which will then create the budget for you to work to on a household basis. I used to be a sole trader and also ran everything through my personal bank account - for me that worked but it sounds like it's overwhelming you a bit - can you open a separate basic bank account for the business stuff perhaps to keep it separate? A basic account will not have an overdraft but you shouldn't need that for a business of the size that it sounds as though yours is, anyway, I wouldn't think.

    The reason I'll champion going the SOA route rather than YNAB or similar apps is that the process of creating the SOA and then having it there in front of you as a printable list can really help you get to grips with what you're spending, where. And that is the first thing for you - you need to be more aware, and "hands on" with what is happening financially. That document will also tell you what you *should* have as a surplus each month - and from there you can work out a plan to tackle that overdraft.

    Once you have a thorough grip of your finances in "real life" - and a budget that works, and that you're sticking to, then try "virtual" applications for keeping track to see if they work for you.

    I'd also be inclined to list out all those DD's - first off as suggested above work out if there is anything there that you no longer need, or want. Secondly try to contact the relevant parties and see if you can get them grouped together - so depending on your cashflow maybe one batch on the 2nd, another on the 15th - but obviously however works for you. Far easier to keep track if you know there are only a few days in the month when money should be leaving!
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    • FaithFay1992
    • By FaithFay1992 4th Oct 17, 12:09 PM
    • 5 Posts
    • 4 Thanks
    FaithFay1992
    Agree with above.

    My problem was that I thought small things such as clearing out un-needed DDs were just a drop in the ocean as far as clearing a large sum o debt however once you have done it you will be surprised how it actually does help towards the debt in the long run.

    And silly small things such as are you taking a pack up to work everyday? That will save you heaps of money. I was always buying lunches, meal deals at the supermarket etc and these add up to more than you can imagine and are a real set back. Being a bit more thrifty/frugal with help your situation, even if at first you are only saving pence. It all counts and adds up
    • enthusiasticsaver
    • By enthusiasticsaver 4th Oct 17, 1:04 PM
    • 4,831 Posts
    • 9,125 Thanks
    enthusiasticsaver
    Doing an soa is a good idea. If you are a sole trader would it not be better to keep your business expenses and income in a separate bank account and pay yourself a salary from that weekly or monthly?

    I am a big fan of separate pots or accounts for different purposes. The bank account should be just for your income to go in and only sufficient left in there for direct debits (with a buffer in case the amounts go up). I would treat the overdraft as a separate debt and set up repayment plan for that as well as your credit cards. Once you have worked out how much is needed for direct debits/bills split the remaining amount up. So much to go into household account for entertainment, personal, food and fuel. So much into an emergency savings account and ideally a pension. A certain amount should also be kept separate for annual expenses such as holidays, insurances, car repairs, christmas and birthdays etc.
    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
    • Fireflyaway
    • By Fireflyaway 4th Oct 17, 1:09 PM
    • 1,355 Posts
    • 1,370 Thanks
    Fireflyaway
    Do a written budget so you know for sure what's coming in and out. I find it easiest to have 2 accounts, one for bills and one for spending. Allocate yourself a set amount for spending each month and don't exceed it. I put it in 4 envelopes one for each week.
    Tidy your direct debits - get them coming out in the same day. Also reduce them if you can. Switch energy provider / get better deal on TV and broadband etc. Set an amount for grocery shopping too.
    After you know what left, make a plan to pay back the debt. I like the snowball method ( check out Dave Ramsey).
    Even just writing it down will help you feel less overwhelmed.
    • Bythelight
    • By Bythelight 4th Oct 17, 5:46 PM
    • 8 Posts
    • 8 Thanks
    Bythelight
    Annie,

    I am also a sole trader and I found it impossible to keep on top of what was "my money" and what was money I needed for tax/expenses etc. with one bank account.

    I would definitely recommend two accounts: a "business" one, and a personal one.

    Run your business through your “business” account (receipts, expenses, tax savings account etc.) and pay your personal account a regular monthly salary as if you were an employee.

    Doing this gives me the stability of knowing how much I have to spend in a month and it is much easier to budget accordingly (and do my tax return!). It also helps you identify if your "living" exceeds what your business is making. (i.e. that you can only afford X salary but you spend Y).

    It also means when I look at each account (business or personal) and see issues, it is easier to identify those issues: in my personal account have I overspent on food/shopping/too many dinners out or in my business account, do I need to chase invoices.

    Paying a salary based on my yearly take means in the good business months I automatically save for the bad business months. I found working out my monthly salary a bit tricky at first - I low-balled it so i could build a small cushion on the business side for cash flow– but by the sounds of it you know roughly what it will be.

    HTH and good luck!
    • anniek42
    • By anniek42 4th Oct 17, 10:44 PM
    • 9 Posts
    • 1 Thanks
    anniek42
    Thank you everybody for your kind replies. I am most grateful for the advice. I think by reading them I will start using my NatWest account which is laying dormant to start putting tax away at least for now. I don't think I could manage to have all my direct debits going out on same date as because I am up to my overdraft of £1740 quite often until I get this clear I can't make any headway.
    I do have surplus money left and looking at what I spend it seems to be mostly food, takeaways and charity shop purchases. I think sometimes I go to cafes even on my own to be somewhere different and away from my house. It's not a bad house I just don't seem to relax very well. I often potter about a lot and we have about 6 charity shops in town and I am always popping in and finding a bargain. I am starting to realise I think I get a buzz from it as I just can't stop. The other day I bought a card making machine and have started buying all the bits (a friend started my interest) but I haven't yet made one card! What is that all about! I did the same thing with beaded jewellery. Bought all the beads (charity shop bundle) bought all the clasps, wires, tools etc. I made a couple of bracelets then realised I wasn't going to do it, boxed the whole lot up and sold it on gumtree at a big loss probably! Anyway, it's quite clear I've got a bit of OCD when it comes to some things. The one thing I should be concentrating on is my business and finances but sometimes when I feel despondent I feel like I need to do something else as my life is not much fun at the moment. ��
    • armchairexpert
    • By armchairexpert 5th Oct 17, 12:42 AM
    • 725 Posts
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    armchairexpert
    You have two different issues.

    One is the bank accounts. I'm a sole trader, and I have three accounts (well, I have more, but for the purposes of this explanation). One is my business account: that's the one from which I pay business expenses, and receive business income. I have a inked business-savings account, and at the end of each month I add up what my income is and transfer the right percentage over for tax.

    What's left is sent over to my household account, which is where I pay all my bills. I would recommend trying to make this a set amount per month, so you're paying yourself a salary, but at the moment you can't afford to do that so you need to send the whole lot over (except leave a small buffer in the business account for business expenses).

    That's problem one. Problem two is your budgeting. If you're at the bank every day trying to avoid going over your overdraft, that's not a problem with how many accounts you have or how you track your DDs, that's a problem because you're spending more than you earn.

    YNAB is only one option, but one of its goals is to get you living on last month's money (it takes a while). So it doesn't matter if your November direct debits come out on the first or the thirtieth, because you put money away for those bills out of your October income and it's sitting there ready and waiting.

    What it also does is gets you to budget for your True Expenses. I had done spreadsheet budgets in the past and thought I had loads of money left over. After I worked out mortgage, bills and food I had $2K a month (Aussie dollars, so not as much as it looks!) - which meant I would buy books, clothes, makeup without thinking about it. Almost a year into YNAB and it turns out that all along I had maybe a few hundred. Because it makes you think about things like: you'll need to replace your laptop in three years, start putting away a few pounds for that. What about MOT? What about annual levies? And so on. An SOA is also good for reminding you about those expenses. And after that, you can see what you really have left over.

    So:

    1. SOA
    2. Use a business account for tax and any business expenses
    3. Then you need an ongoing budgeting system, YNAB or a spreadsheet or whatever works for you.
    MFW diary here. 1 Feb 2017 $229,371 - MFD Feb 2043 aiming for May 2028
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    • tealady
    • By tealady 5th Oct 17, 5:08 AM
    • 2,737 Posts
    • 3,235 Thanks
    tealady
    Hi
    I eould still ring companies re changing th DD dates. After all they are unlikey to know (or care) that you go into your o/d each month.
    Also by going through them you can check if you really need them and if you do, can you get them cheaper.
    Good luck
    Proud to be an MSE nerd
    Judge people by their achievements, not by their mistakes
    • EssexHebridean
    • By EssexHebridean 5th Oct 17, 9:40 AM
    • 8,214 Posts
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    EssexHebridean
    As a SE trader you MUST put tax & NI contributions aside as you get paid on each invoice and before ANY of the money is designated elsewhere. Remember that the way Tax works is that even when you sign off as being self employed in the future you will have a final bill to pay so it's important to have been putting this away from the start, and to make up any shortfall if you've not been doing this.
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