Live on £4000 for a year - part 4 (Oct - Dec 2008)

thriftylass

At the moment I've got an interest-free overdraft with my account (for at least another 1.5 years). Would it be wise (well I guess so just need confirmation) to max out the overdraft and put all money not spend into a savings account and when the time comes get out of the overdraft?

Thanks a lot

whitewing

thrifty, the only problem I ever end up with when I'm trying to be clever, is that I balls up. Going into unauth overdraft could cost you dearly if you don't keep strict control.

I wouldn't do it on my normal current account, but I know what I'm like!

andromache_2

That's what I do, thriftylass I find that it stops me from making large unconsidered spends as well if I know I only have £50 available or something: if I want to buy something more expensive (usually clothes and shoes ), I have to go home, move the money using internet banking, then go back out again, by which time I will have changed my mind! The interest rates on all my savings accounts are dropping, though, making this a less profitable proposition :rolleyes: but still worthwhile.

PS thank you very much, nyk: voucher arrived yesterday and I picked it up today

Frugaldom

I agree with Whitewing, it's nice to think of the overdraft as extra that could be used for a form of stoozing but it's dependent on your account being completely empty and offsetting any potential interest that's being lost as a result of that. Mind you, if the free overdraft amount is worth it, and you can trust yourself not to make any mistakes, then you could make a few pounds extra by transferring it to high interest accounts. That would work IF you can get the money back out of them exactly when you need it to pay off the overdraft. (That's my biggest worry at the moment).

Andromache, hope you can make use of the discount

thriftylass

Thank you all for the advice on the overdraft issue:T. I'll have a think. Silly but I'm a bit torn, because I know it would be save to do it (the internet savings account with my main bank I have is instant access, so I could always move money quickly as needed, unless this economic situation gets worse of course and they freeze more accounts) on the otherhand I don't like overdrafts (this is my first and came with the account) no matter if it is interest free or not because it's not really my money. Although I could earn some extra interest that way I have to make a decision if I not rather be in the black all the time. Probably better leave it til after Christmas when all the major unexpected spends have past and it's safer

MrDT

cw18 wrote: »

BTW: What was the final spend that made you declare yourself bust? I'm sure you said you'd share that with us when you came back with the 'bankrupt' statement

I'd stated that I really hoped not to go bust buying something mundane like bread or milk... Sadly I spent £11.53 in tesco last night, buying a bunch of stuff including, you guessed it, bread and milk haha!

I can see how some of my spending seems a bit strange lol, but it could be a lot worse I have more detailed breakdown figures (i.e. what was spent in canteen, what was spent on takeaway etc) but figured it better to lump things together. Eating out is basically anything that I buy to 'eat out' (i.e. not part of the grocery shop) - if I buy a 75p sandwich at work it counts, if I spend £40 on a meal for my girlfriend and I it counts. Best intentions of packed lunch and careful grocery shopping etc is all too easily wiped out by a nice meal out etc, but it's worth doing every once in a while

I can see how the nightsout could seem a bit spendey too - that's because they are! Keeping it to an average of one nightout a month is a huge help though, I used to go out on the juice at least twice a week Oh, there was a time I used to smoke about 80 cigarettes a week too, that works out as £780 in nine months (£5 per pack of 20), cutting that out alone is almost enough to cover all my nights out and eating out :rotfl:

I'm pretty sure that if I hadn't gone on holiday this year (still had the days out and weekends, just not the week in spain) I'd have managed end the year under budget, but at the end of the day this challenge was just a fun experiment for me with the added bonus of helping me increase my house deposit balance, so I didn't want to cut everything out!

The spending diary has also shown me that I spend even less than expected on clothes haha! Not bad considering I've bought two pairs of trainers, three shirts, five tshirts, three pairs of shorts, and a bunch of other stuff I can't remember off the top of my head! It's not that I don't buy clothes, I'm just very value concious with some things lol!

It's strange quantifying these things and comparing with others... You were surprised that I spent almost as much on nights out as I did in the supermarket. Other people would probably be amazed that someone can get away with spending less on clothes than they do on the tv license. Others still would be amazed that in a whole nine months I've spent less than a third of one monthly paycheck on nightsout when they spend everything after rent on saturday nights etc Personally the realisation that near enough a third of my discretionary spends went on a cheap as possible holiday and a couple of weekends away is shocking.

I wonder how little I could live off if I REALLY stripped my budget to the bone. I wonder, but I hope I'll never be in the situation where I have to find out. Like I've said before, this challenge is a fun experiment, and I'd like it to keep on being fun haha!

MrDT

thriftylass wrote: »

Thank you all for the advice on the overdraft issue:T. I'll have a think. Silly but I'm a bit torn, because I know it would be save to do it (the internet savings account with my main bank I have is instant access, so I could always move money quickly as needed, unless this economic situation gets worse of course and they freeze more accounts) on the otherhand I don't like overdrafts (this is my first and came with the account) no matter if it is interest free or not because it's not really my money. Although I could earn some extra interest that way I have to make a decision if I not rather be in the black all the time. Probably better leave it til after Christmas when all the major unexpected spends have past and it's safer

Couple of years ago I had an interest free graduate overdraft with Barclays.
Maxed it out to pay into a savings account (~4% minus tax iirc), also with Barclays.
£250 a month drip fed from the savings account to a regular saver paying 12.5% minus tax (10% gross, seriously), also with Barclays.

That worked rather nicely haha! Borrowed interest free from Barclays to fill up some savings products they offered paying nice rates of interest

I paid the overdraft back just before they started charging interest, then reduced it to the minimum £200. Well worth doing if you can time it right. Oh, so long as you don't end up in an Icelandic Bank type nightmare! :eek:

edit: Just to add, overdrafts are 'repayable on demand'. Bear this in mind when deciding where to save your stash. A 12 month bond, for example, would be no good if the bank revokes the overdraft and want their money back in month four...

Frugaldom

My new coal bunker has arrived! How sad am I for celebrating the arrival of a big, new, shiny metal box! (I've already deducted the cost from balance in my signature.)

Removal man arrived, so we are booked in for next Tuesday. Electricity should be sorted out for this Friday, shampoo carpets over weekend, telephone line goes in next Monday, furniture moved on the Tuesday and then it's a case of working between both addresses until we sort out deposits, keys etc for here. As far as we know, this place will be going on the market immediately - anyone? It does have a great garden for veggie growing once you get the snails under control - see my webpage - and a nice woodburner / heating system would sort out the winter chills, as there's plenty of space for log storage and the kindling takes care of itself from the trees in the garden.

Mince now in slow cooker with some homegrown onions & a carrot, homegrown potatoes at the ready and some nice suet dumplings should suffice for dinner tonight, I still haven't tried baking in the mini oven but need to practically empty the freezer by Tuesday, so no point in making any more bread. Hmm...

Brighton_belle

bails wrote: »

Sorry to hear you're exhausted BB, hope you're still fast asleep on your lie-in. As for the 'to do'list, you know the drill... If it helps, I'm with you on both counts x

Thanks bails. Had a long lie in, only woken by a big lorry unloading equipment -the downside of living next to a recording studio:rolleyes: .Forced myself to drop nearly all 'to do list' today and not gone to butchers etc as planned. Definitely a duvet day. But, have managed to get bulk cooking of red cabbage dish into slow cooker and prep tonight roast veg & leftover bits of chicken now sitting waiting to be switched on in the remoska: roast onion/sweet potato/sprouts/carrots etc.
My reward for patience today I hope will be being well enough to attend my mosaic class tomorrow.
Lynda - that looks a facinating place to work. I volunteere for a while in a local museum andloved handling/cateloguing the artifacts.OH will enjoy the vid when he gets in.
Lingo -the desk sounds great. Freecycle can be so brilliant.
Hope you have a well earned break SM. Talking of which, Janet should be back soon?
Nyk -sounds like all is going ahead smoothly with the move - wasn't sure at first from your earlier post. Your new mini oven sounds fun. I much prefer cooking in my remoska to a big oven. Enjoy the coal bunker:D .As for the urban/country life. I've never lived in the country or had anything to do with animal/pets. I'd loved to give both a try to see if I liked it, but I do enjoy living in a small 'city' with the amenities/cultural events on tap but 5 mins from the beautiful downs/sea. OH would be happy living 30 mile from nearest neighour:eek: .

cw18

MrDT wrote: »

I can see how the nightsout could seem a bit spendey too - that's because they are! Keeping it to an average of one nightout a month is a huge help though, I used to go out on the juice at least twice a week

The nights out probably wouldn't have caused my elder son (19, and in the Army in Germany) to bat an eyelid. DD (almost 25, and a single parent to 2 girls with what is considered a low paid job with Tax Credit top-up) may have winced seeing it as a total figure, but overall I doubt she'd have thought it excessive either. It just probably seems that way to me as

(a) I went straight from education to motherhood, so never had much of a social life back then (and don't now as I know very few people outside of work -- and they always go out for curry's which are the one type of meal I can't even be in the same room as for more than a few minutes), and

(b) as you said, this is an experiment for you -- and full credit to those of you doing this in order to realise dreams (such as house deposits/mortgage free homes) or to clear debts early even though you don't have to -- whereas joining in next year for me is necessity (loss of job) meaning we're going to be living off capital at about a 15% faster rate than we'd qualify for in benefits if we didn't have my redundancy payment coming in -- and that's just to pay bills we're already committed to and with a minimal amount on food. (to which end I don't even have a specific budget for clothes and shoes!)