Advice please for a debt free novice

msmicawber

Hi everyone,

I've been lurking around the site for months, and this board for a few weeks, and am so impressed by the support you all proffer and what a warm bunch of people you are.

It may seem a strange time for a first post since I’ve at last cleared my debts, but I’d like some advice please. Although I’ve become more savvy with money over the years, I’m aware that I’m not sophisticated with money and can be rather cowardly about making changes in case I do the wrong thing and get myself in strife. I’m a single mum without friends nearby that I can discuss financial things with (tried recommending Lidl’s a while ago and was told it was ‘!!!!!!’, tried recommending MSE and was told it was probably a con, so gave up) and often feel out of my depth and alone.

I work part-time and am studying A levels with a view to going to Uni. in 2007 to train for a job that will get me out of the poverty trap. Now that I’m solvent I want to budget for the big things such as exam fees for my A levels, clothes and shoes for the children and me, Christmas and birthdays and, of course, the move to Uni. I’ve started a spending diary today and set out my SOA below and would be grateful for any ideas and recommendations that you have for helping me keep in the black over the next year. I’d also like to know if and when would be a good time to apply for a credit card (i.e. just before I go to Uni., now, or in a few months after my newly-cleared CC debts have been marked as satisfied on my credit rating). No, I’m not planning to go mad with money I don’t have, but want to be able to take advantage of cashback deals to boost my income, and GEM’s reduced breakdown cover if you pay at the time and then claim back from them, etc.

SOA:

Income:
Salary: £808.45
Child benefit: £126.32
WFTC & CC: £385.81
Housing benefit: £271.09
Monthly Total: £1,591.67

Outgoings:
Rent: £725.00
Council Tax: £105.89
Water meter: £12.50 (paid twice yearly)
Contents insurance: £4.88 (£58.53 paid annually)
Gas & electricity: £55.00 (capped dual fuel tariff until April 2007)
BT line rental: £12.00
Broadband (Primus): £12.60
Calls (Primus), varies but max. £6.00
Mobile phone PAYG: £1.00
Car breakdown cover: £6.25 (£75 paid annually)
Car insurance: £16.67
Car tax, maintenance & MOT: £27.50
Petrol (max.): £50.00
Children’s pocket money: £43.30
School trips, etc.: £4.17
TV License: £11.37
Pets (goldfish!) £1.67
Dentist: £6.00
Haircuts: £8.33
Spectacles: £1.00

Total: £1,111.13

Income minus outgoings: £480.54

My monthly spend on food (1 adult, 2 children aged 13 and 10) is about £50.

I’m not sure how much to set aside for:
- Christmas & birthdays (I have a large family that I see very rarely so like to send a little something to my nieces & nephews);
- Clothes and shoes for the children and me (haven’t bought anything for myself for years and look like a mad bag lady, which has got to change, and haven’t budgeted before for the children’s things, but have just bought as needed);
- Moving house next year (unfurnished rental, so own a house load of furniture, etc.)
- Contingencies (e.g. when housing benefit is messed up, or other Donald Rumsfeld’s (unknown unknowns!)

Need to save about £200 for exams fees by January.

If anyone has managed to get to the bottom of this essay without dropping off to sleep, I’d appreciate any advice/comments on savvy ways to manage my money. I’ve got great will power (where money’s concerned) so won’t spend what I don’t have, but am a bit thick when it comes to things like getting cashback for switching suppliers (missed that boat).

Thank you for getting to the end of this.

Ms McCawber
(income £1, expenditure 99p: happiness; income £1, expenditure £1.01: misery) :money:

Gemmzie

Work out how many weeks it is until the exam, break the £200 down and aim to save X amount per week to make sure you hit the target.

Will you be working alongside uni? Because I think your WFTC will stop and you may be able to get IS while studying - dependent on income and hours of work/study.

Good luck

wanna-be-mortgage-free_2

Welcome to the board and congratulations in getting yourself out of debt that is one major achievmenet which you should feel very proud of. And coming on here will keep you on the straight and narrow

I don't have much advice expect have a look over at the OS style board for hints and tips on shopping and other old style moneysaving tips. You could sell stuff on ebay and when you have enough treat yourself and children to new clothes/shoes. Also have a look at the savings accounts, maybe you could open one for each of your children and save your money in there which would give you a higher rate of interest. Using the credit card to make money is a great idea, you could also save up vouchers from tesco etc to buy your pressies or have a look at Quidco, pigsback etc again you can collect points and redeem for pressies for family alternatively you could make things for them too.

All the very best to you.

wbmf

msmicawber

Thank you Gemmzie,

I've got a savings account with £2 in it and thought I'd start transferring money each month for annual bills, Christmas etc. so will just add £50 per month for the exam fees as well.

I'm not sure how finances will work at Uni. - the course I'm applying for attracts an NHS bursary so I believe that WFTC may still be applicable. But, like most benefits, it feels like walking the plank and I guess I'll find out when I get there, so can look at whether to work & MSE or bursary & MSE through the course.

Thanks again - you're so speedy on this board!

LookingAhead

Hi there. Do you have many things you could sell on Amazon or EBAY? £200 could be quite acheivable if you could bundle up childrens clothes, toys or sell cd's books dvds etc.

Also who cares what anyone else thinks of LIDL? You could just go with the intention of checking it out and making your own mind up. Try to go at a quieter time (i.e. not Saturday at 2pm!) and just see how you get on. You could save heaps!

Mind you your food bill looks really low as it is. Are you sure you are eating enough?

Good idea though about breaking down that £200 though - it will make it easier to get your head around it.

msmicawber

Thank you, too, wbmf.

The getting out of debt thing hasn't sunk in yet I don't think - I thought I'd be dancing in the street, but I feel sort of vague about it.

Actually, selling things on Ebay's one of those things I haven't had the guts to do yet. I have a large sofa that I need to sell, but don't know if it's the right sort of thing to put on there (a friend of mine told me that people have a tendency to overbid on Ebay, so she thought I'd make more money than advertising in the local paper - does that sound right?) With smaller items I wonder if it's really cost effective once you've paid for postage (or does the buyer pay for that on top?)

bonnie_2

I think you should be allowing a bit more for food £50 a month dosen't sound a lot. I would say at least £50 a week, and national debtline recommends £5 a week for clothes so times three, would be £60 a month.
How come your waters so cheap £25 a year is this a mistake, mine's £40 a month. eek.
As for presents go to the freebie section, i haven't bought any for 2 years apart from the kids and hubby.
Do you not get exemption from the dentist on wftc.

wanna-be-mortgage-free_2

msmicawber wrote:

Thank you, too, wbmf.

The getting out of debt thing hasn't sunk in yet I don't think - I thought I'd be dancing in the street, but I feel sort of vague about it.

Actually, selling things on Ebay's one of those things I haven't had the guts to do yet. I have a large sofa that I need to sell, but don't know if it's the right sort of thing to put on there (a friend of mine told me that people have a tendency to overbid on Ebay, so she thought I'd make more money than advertising in the local paper - does that sound right?) With smaller items I wonder if it's really cost effective once you've paid for postage (or does the buyer pay for that on top?)

There is an ebay board you should have a visit but I sell a lot of stuff on ebay, mainly my clothes or my children's that are too big/small, when you list the item you put in the cost of postage and packing and the buyer pays that. Have a look at the Ebay board, there is a lot of good advice there. It's a great way of making extra money from bits and bobs you don't use/need anymore. With the sofa, I'm not sure about that one as you would need to sell to someone who could collect it. Do you have a freead paper in your area you could put the sofa in that? No point in hanging on to it when you can put it towards your savings.

Snaggles

Hello & welcome!

Well done for getting yourself debt free, you've done really well (did that sound patronising? Sorry ).

Your post made me giggle (Donald Rumsfelds lol). And as for calling Lidl '!!!!!!' - how DARE they, how VERY DARE they hahaha! Just goes to show that you are more financially savvy than you realise, and they sound to be a bit too far up their own bottoms if they put you down like that without even listening to what you had to say (no offence....okay maybe a little bit of offence....:D). Not much advice to offer I'm afraid, as you seem to already be pretty well on top of things, but I'm sure some of the others will have some good suggestions for you. Good luck, Love Snaggles xx

LookingAhead

The buyer pays for postage so you don't lose on that!
Just make sure you weigh things correctly - and with the new postal rates coming in where they take size into consideration too, make the package as small as possible of course.

EBAY is REALLY easy. I know what you mean though about plucking up the courage...I was the same. Once I got started though I was hooked though for a few months and managed to whittle my overdraft down a bit as well.

About the sofa....not sure to be honest as I have never sold anything that big. You could have a look on EBAY and see if anyone else is selling them?

Or see if there is a local internet forum for your area and see if they have classified ads? Or use Diamond FreeAds or something?

If you have a small list of easy things to do i.e.

a) Look into free ads
b) Check out EBAY
c) Make a list of old cds (example) to sell on EBAY or Amazon

These are easily achievable and you may feel fired up by doing them.

Good luck hon!

msmicawber

Yes, my food spend is low - Lidl's, markets, bogoffs and make from scratch then freeze stuff, have store cupboard weeks, etc. - but I've just realised that I didn't include toiletries and household stuff in there which skewed the figures. Also, I'm a bit neurotic at times, so don't eat enough then, I know. I've just had a battle with the Council over benefits that lasted 6 months and was only resolved when my MP stepped in, so my food bill will go up now!