SOA/Realistic budget??

huggermugger

Been lurking & inconsequentially posting for long enough. I’ve already learnt a lot from doing that and have put some of it into practice but it’s time to stop dabbling and take the first real step. I need help!

I’ve been in debt nearly all of my adult life. Although my debts aren’t huge at the moment, it’s been a cycle of building them up & then paying them off when a house was sold or when I inherited some money (once!). I’ve never saved but I have “made” some money through houses (pure luck). My income until recently has been very erratic and fairly low. I have just come off long-term Income Support and returned to part time work so finally I think I have achieved some stability. Now seems a good time to change some habits and learn some new ones.

I have always spent all my income although for most of the time the income has been very low. (I am on my own with two kids, one now away at uni). I have used credit cards and an overdraft to pay for emergencies and “extras”. I am good at making a bit of money stretch a long way. (years of practice!) However, I am a bit of an impulse buyer especially if I can convince myself a) I need it and b) it’s a bargain. I’m very good at convincing myself.

I have never had a budget beyond “what’s left in the bank” I always know what my income is but I have very little concept of what’s a sensible spend for most categories so a lot of these are guesstimates... I think that’s where I really need help.

OK – here’s my attempt at a Statement of Affairs as I think it’s known! Somebody tell me if I’ve missed anything…

Income per month

My income - £360
Child Benefit - £75.61
Tax Credits - £536.98
In work credit - £173.33
Other income (maintenance) - £320
Total income - £1465.92

Expenditure per month

Rent/mortgage - £331.64
Council Tax - £80.94
Water Rates - £25
Electricity & Gas - £60
Home phone - £40
Mobile phone - £5
Petrol/Diesel - £45
Car tax, MOT etc - £62
Groceries (food, cleaning products, toiletries) - £300
TV licence - £10.99
Babysitting - £15
Training course travel/subsistence £40
Dog - £4.50
Socialising - £10
Clothes (estimate)- £20.83
Childcare £108
Children’s expenses (toys, clothes etc) - £23.25
Children's school dinners (term time only) - £6.93
Haircuts £11.70
Christmas/birthdays - £ 30
Payments to savings - £ ???
Me spending money - £20
Children pocket money - £15
Summer holiday £35

Total expenditure £1300.78

Debts

Overdraft with Abbey National £500 (reached every month) no current repayments

Credit Card Tesco Visa - current balance £2722.49- credit limit £4000 - monthly repayments £81.00 - APR 14.9 %

From next month this will be converted to a personal loan from a friend at 0%, paid back at £90 per month.

Arrears debts-

Halifax (mortgage) total debt £28,000 current arrears £133.00 monthly repayments = £23.00 last one due July 2006

Total debt repayments - £104.00
Total debt owed - £3,355.49 (plus mortgage)

Total income - £1,462.92
Total outgoings - £1300 + debt repayments = £1300.78

Difference: £162.14 I think that's good! :j I'm astonished to be honest!

So - is it realistic? Are there holes in it? How can I stick to it? It's taken me nearly a yearr of being around this site to get to this point, so please say something....

D&DD

Hi Hugger welcome to the DFW boards
Since I found this site it has taken me 3 months to really work out a comfortable/realistic budget for us.The first step was creating my own spending diary as suggested on here and writing down everything that was spent and where it was spent so I could plug any unneccessary leaks! After doing this for a month or so I got to see exactly where the pennies were slipping out to!
I readjusted our budget 3 times so far and now have a really good workable one..the first two attempts were sooo far out..down to wishful thinking methinks!! :rotfl:
So I guess my ramblings mean it does take a little while then hopefully everything starts to fall into place
Some of the gang will no doubt be along shortly to help with your SOA theyre all so much better at that than me :rotfl:

lynzpower

Hi there and welcome!

First off, I make your calculations slightly different. Im starting with your income which is
Total income - £1465.92

Then minusing Total expenditure £1300.78
Then minusing 90.00 to your mate whose taking the debt on for you
Then minusing 23.00

not taking into account arrears leaves 52.14. Am I right here?

Now onto your expenditure per month!!

Rent/mortgage - £331.64
Council Tax - £80.94 ( do you class as being able to get CTB? I dont know, just hazarding a thought)
Water Rates - £25
Electricity & Gas - £60 ( seems a bit high, others on here are dpong it for £50 for both, have you shopped around?)
Home phone - £40 ( whats this for? landline? Broadband/ dialup? )
Mobile phone - £5
Petrol/Diesel - £45
Car tax, MOT etc - £62
Groceries (food, cleaning products, toiletries) - £300 ( WOWEE, this is high. Me and OH are doing 100 a month we reckon, - bit over the £20 a week challenge and we both have big appetites. You can easily save 100 here)
TV licence - £10.99
Babysitting - £15 ( could you swap with someone, ie you babysit for free for them, they do the same for you?)
Training course travel/subsistence £40 ( can you claim this back from anywhere? Jobcentre or anytihng?)
Dog - £4.50
Socialising - £10
Clothes (estimate)- £20.83 ( are you actually spending this? If you ar eat the mo, cutr it out for now, unless its essentials like school uniforms of course)
Childcare £108 ( is this for while your working?)
Children’s expenses (toys, clothes etc) - £23.25 ( this can stop can it ? Use toy libraries for now?
Children's school dinners (term time only) - £6.93 ( per month or per week? this seems low for a month! If it is its a bargain! )
Haircuts £11.70 ( can you go off to the students or model nights in salons? Mostly they aree free! )
Christmas/birthdays - £ 30
Payments to savings - £ ???
Me spending money - £20
Children pocket money - £15
Summer holiday £35


thats it from me, but of course to say, congrats on the new job, and welcome! Hope to see more of you round here!
Lynz
x

huggermugger

Thanks DD & D - I am trying with the spending diary but I keep forgetting to use it; another habit to acquire.

huggermugger

Thought it was too good to be true... you're right Lynz, I can't add up.

Thank you very much for taking the time to look at all that and for your comments.

I will look into CTB but am pretty sure I am just over the threshold.

I think my Gas/electric is a bit high; I am currently with Powergen & that's before the price rise. However, now I am out of the house more I'm hoping it will get less. I will look at alternatives, thanks.

Phone is landline with BT using talk together (or something) package. I forgot to put in broad band; I will edit it in a minute - thanks. This is the most expensive it is; usually closer to £30.

Ok I think I have a Teso's habit. This month using the spending diary I have got the groceries etc bill down to £180 so far but I have been in bed with flu for four days! If you think £200 is realistic, I'll stick with that.

babysitting - difficult as if I babysit for someone else, there's no-one here with mine.... but it is

training - nearly at the end of the course now - tried Job Centre for funding, no go.

Clothes- this was an estimate based on possible spending on clothes for me (don't usually buy any!) & I thought it was high so will cut it. I don't need anything at the moment but shouldn't I get used to budgeting for it??

Childcare - yes - averaged out for termtime & holidays

Children's expenses - don't quite know what this was; will estimate two pairs of shoes per year plus £50 for clothes plus £60 per year music lessons. That's £3.50! Will add a bit...

School meals - only have twice a week, packed lunches o/wise but still, it should be £8.53

Haircuts - that's having my hair cut & coloured four times a year as well as having my son's cut. She comes here & I think she's very cheap! Am I wrong??

Ok - I'll go & change the original SOA - or should I put it in again??

thank you again! :T

lynzpower

Nah tis fine! I dont really know, just offering suggestions really, more for you to think about.

In respect of your food bills, you can definately get this down. Have a look on the OS board. I know the food shopping addiction, i inherited mine from my mother! She goes food shopping, pops out for a loaf and comes back having spent £20. What Im noticing now Im doing the 20 a week challenge, is that a) we are VERY careful to use everything/ freeze it before it goes off. b) check what we ACTUALLY need and buy that c) meal plan so that we are making food around whats in the house. I must have 10 bags of rice & pasta in for a start! Thats crazy, I bought food ( probabbly on my credit card), that I didnt need and havent eaten. Start by going through your cupboards and working out what you can make without buying much else in.
If you want to swap recipes let me know!!

What I was meaning about the babysitting was, could you find another mum who you can look after thier nipper for free, and then when you want to go out return the favour? Ie get thier nipper to stay over at your place for a sleepover?

Lynz
x

huggermugger

SOA

Income per month

My income - £360
Child Benefit - £75.61
Tax Credits - £536.98
In work credit - £173.33
Other income (maintenance) - £320
Total income - £1465.92

Expenditure per month

Rent/mortgage - £331.64
Council Tax - £80.94
Water Rates - £25
Electricity & Gas - £60
Home phone - £35
Mobile phone - £5
Broadband - £14.99
Petrol/Diesel - £45
Car tax, MOT etc - £62
Groceries (food, cleaning products, toiletries) - £200
TV licence - £10.99
Babysitting - £15
Training course travel/subsistence £40
Dog - £4.50
Socialising - £10
Clothes (estimate)- £10
Childcare £108
Children’s expenses (clothes, music etc) - £5
Children's school dinners (term time only) - £8.53
Haircuts £11.70
Christmas/birthdays - £ 30
Payments to savings - £ ???
Me spending money - £20
Children pocket money - £15
Summer holiday £35

Total expenditure £1183.29

Debts

Overdraft with Abbey National £500 (reached every month) no current repayments

Credit Card Tesco Visa - current balance £2722.49- credit limit £4000 - monthly repayments £81.00 - APR 14.9 %

to be replaced this month by:
Loan from friend - current balance £2722.49 - monthly repayments £90 - APR 0%

Arrears debts-

Halifax (mortgage) total debt £28,000 current arrears £133.00 monthly repayments = £23.00 last one due July 2006


Total debt repayments - £113.00
Total debt owed - £3,355.49 (plus mortgage)

Total income - £1,462.92
Total outgoings - £1183.29 + debt repayments = £1296.29

Difference: £166.63

huggermugger

Ah, the £20 loaf of bread....! Spot on! I think it's partly to do with the fear of not having enough food in the house if I run out of money... :huh: No, I know it doesn't make any sense. I have two freezers full of food (all bargains) and a big larder as well so yes, we are eating our stores for a while. And I do find that planning the meals helps but I'm not always organised enough to do it. We don't eat junk or take aways, tho. (Where's my halo...)

BUT (deep breath) we do eat organic fruit & veg, which I have delivered by Riverford and I will cut down elsewhere to pay for if I have to. And yes, it is included in the £180. I don't want to start a debate but I am committed to having it. (can't find a stubborn looking smiley :rotfl: ) Tho I did cut it out last summer as I took on an allotment and grew a lot of our own. Don't ask how the allotment is doing at the moment.

Will have a think about the babysitting - not sure how it would go down with most people as they seem to be fairly well sorted....

lynzpower

Your first priority HAS to be your mortgage arrears. If you can eat out of your cupboards to the tune of 133.00 (wasnt impossible at for us at start of March!) then that will clear what youve got to pay off. With two freezers, could you not buy anymore food aside from bread&milk for a month? Two weeks? How long will it last for?

Collect all the coppers you can from round the house ( and any clubcard vouchers you might have) , and put in a pot in your kitchen. If you NEED ,and only when you NEED sometihng ( ie milk, bread) then take the exact money out of the jar and use that. Leave your purse at home when you nip to the shop. LIke any addiction, cold turkey is the only way for me! You could put a fiver in the jar at the start of the week if you dont have much copper hanging about, then whatever change is there can go onto your debts.

I know exactly what you mean about the amount of food in- but Im quite a green person as well, and when I started to think of the petrol used in distribution for it to sit in my cupboard i was like :mad: at myself.

Nothing wrong with organic boxes at ALL unless you are throwing some of it away. I was going to do one too, but couldnt find anything that didnt involve quite a lot of waste ( ie dont like cauli, broccoli, beetroot so they wouldve been binned, you get the idea) If you are wasting some of it, then shop around and make sure that you get the best box for you. Ive actually found that you can get quite a lot of frozen foods in organic now (sainsburys mainly) and use this as there is no waste at all, along with buying what I do need when I NEED it and not before.

huggermugger

All that's useful stuff, Lynz, thank you. :A

I will look at the organic frozen stuff but I also try to stick to food that hasn't come a long way - the old food miles thing - & I find a lot of supermarket organic veg is shipped in from places like Africa so I won't buy that. I try hard not to waste what we do have - tho I can hear an abandoned kohl rabi in the larder sniggering at this point... (bet you haven't got a recipe for that!)

But you're right, we've always got enough to feed us for a couple of weeks! Don't even need to go out for bread as I have yeast and flour.... I can feel a baking session coming on.

What I would like to ask you (or anyone) is what you do with the spending disry results - do you find that just writing it down sorts out where the money's going or do you get more analytical (I'm not a spreadsheet woman myself..)

And if anyone else has thoughts on my budget I'm glad to hear them as at the moment it's really a work of fiction to a large extent!

lynzpower

good point about food miles with the frozen, I'll look at that! Ah the troubles of an ethical shopper eh? I wondered myself whether its worth having a stab at growing green beans in a organic grow bag in the garden, rumour has its easy as pie, and no food miles. Weve started to sprout our own beansprouts in the kitchen for this reason. ( with limited success as yet!)
Ive a feeling that the Abel & cole website has recipes for the rogue veg like Kollhrabi and I always use the waitrose recipes on thier website its excellent.

I personally wondered about the spending diary results, to be honest, right now ( been doing it for 3 weeks, Im wanting to a) check that me & OHs spending is the same ( i have a feeling he buys more than me) and b) to see where money is bleeding to. The odd newspaper, quids here and there in charity shops and buying lunches etc. Worth doing to see where the moneys going, and also as a bit of a motivator to say, right there was no need for me spending almost a tenner a day, as I was doing when I first started it on naff all.