Operating cushion

moongarden

Hi Everyone,
i'm new here so hello to you all and please be gentle with me!

I have a question regarding savings and debt - i have about 9k debt (am using the budget from this site to work it out at moment). most of the debt i have accumulated because i have been living to the full extent of my means and then when something has gone wrong, car repairs, large dental bills etc have had to be charged to the credit card or some other bill has to be not paid that month.
Most of these un budgeted for expenses have been between 200-500 quid.

Would it be a good idea to put by some cash towards making an emergency fund? i could make room in my budget or i could budget on my main income and save babysitting money and ebay money to such a fund.

what do you think?

ms_london

I think its a good idea to have a little bit in an emergency fund, but overall it makes more sense to throw money at debts where the APR is highest, rather than trying to save where you may only get a return of 4%. But if you have room in your budget to say, save £50, for an emergency fund, then go for it!!! So long as its used for true emergencies - not that gorgeous pair of shoes you have seen :0)

Well done for trying to sort your debt out.

Ms_London

System

Hi moongarden

For any budget to work you've got to include all expenditure, otherwise it'll fail you very quickly.

If you think you'll spend £500 on repairs in the next year, include that for now. You can always fine-tune it later. I'd recommend you always be over-cautious when working out your budget figures too. If you cut it too fine, you've got no room for movement and again your budget will fail you.

Make sure you post back when you've done the budget as posters on here will then be able to (hopefully!) help you cut back.

And also post the details of your debt and you should get some help with that.

Best wishes
Dave

[Deleted User]

Don't forget to try and move your credit card debt to one of the 0% deals. Do it NOW.

moongarden

thanks for the comments everyone. am feeling really depressed now since i just did the budget spreadsheet and aparently i am spending £398.49 more than my income!

i've been down the "desired" column too - this is the figure after that!
having said that i have included things like £480 dental bills i've had to pay this year so far and the £590 spent on keeping my rubbish car going - its on HP and i still owe more than the value so i'm stuck with it.

if i take those two items off the budget i'm somewhere closer to my income but then what do i do if those things need to be paid again (or something similar)?

there are things i can look at reducing - none of my debts are accruing interest except the HP on the car. some of the debts are quite old so the interest has been frozen. i've missed payments on quite a few trying to juggle them all - no CCJ's at the moment but the worlds worst credit record .
i've defaulted on an overdraft with lloyds tsb (head in sand) for £887.

too depressed to do any more tonight.

shefmot

moongarden wrote:

thanks for the comments everyone. am feeling really depressed now since i just did the budget spreadsheet and aparently i am spending £398.49 more than my income!

i've been down the "desired" column too - this is the figure after that!
having said that i have included things like £480 dental bills i've had to pay this year so far and the £590 spent on keeping my rubbish car going - its on HP and i still owe more than the value so i'm stuck with it.

if i take those two items off the budget i'm somewhere closer to my income but then what do i do if those things need to be paid again (or something similar)?

there are things i can look at reducing - none of my debts are accruing interest except the HP on the car. some of the debts are quite old so the interest has been frozen. i've missed payments on quite a few trying to juggle them all - no CCJ's at the moment but the worlds worst credit record .
i've defaulted on an overdraft with lloyds tsb (head in sand) for £887.

too depressed to do any more tonight.

I know how you're feeling as I'm feeling depressed too but talking about it does help (as do the anti-depressants ) but it will get better, your posting here is the first step to that. With regards to the car the key is not how much it is worth but how much of the original agreement you have paid off, if you have paid over half and have no arrears on it you can just give it back and walk away from the agreement with nothing else to pay.

If you need to boost your income after trimming down everything you could always look at a second job, I'm doing this at the moment and the place I'm applying to has a good social aspect too so hopefully meeting new people will help cheer you up as well (as long as you don't spend all the extra money on company nights out!).

moongarden

thanks Shefmot, i just had another peek at the figures and realised that my biggest problem is that i'm inumerate.

I missed two vital things out of my budget - i have some income from babysitting and IT lessons which i hadn't included and if i had been overspending by 400 a month for the past 11 months then my total debt would have gone up but it has pretty much remained the same.

System

moongarden wrote:

thanks Shefmot, i just had another peek at the figures and realised that my biggest problem is that i'm inumerate.

I missed two vital things out of my budget - i have some income from babysitting and IT lessons which i hadn't included and if i had been overspending by 400 a month for the past 11 months then my total debt would have gone up but it has pretty much remained the same.

If it appears your debt has remained the same for 11 months, then with some good ol' MSE economising and scrimping, you may even start reducing it!

It took me a good week of collating figures to get the most accurate budget together. Keep on fine-tuning it. The best way to gather truly accurate figures for your budget is to start a spending diary or cashbook, listing all expenditure to the penny. After a month or two you'll have some very accurate figures to base your projected figures on.

If you're feeling up to it, post your expenses when you can and I'm sure the folks on here will offer their help.

Best wishes
Dave