Desperate to STAY out of debt - is this SOA appropriate?

CompBunny

mne2 wrote: »

Also you are paying more in insurance for your car than you pay in petrol - would suggest you aren't travelling far - perhaps consider the bus/walking instead?

My partner's new job is out in a village in the middle of nowhere...no bus service at the times he needs (bus arrives at 8:50am, his work starts at 8:30am). Also for weekends/shopping, I am unable to walk far (just short strolls) and by the time I've arrived somewhere on a bus I'm so tired I need to go home again!! I don't leave the house during the day as my partner has my car. We were looking into getting a second car but its unrealistic and unnecessary as I only have medical appointments to attend and anything else can wait until the weekend! Cars are very expensive but we need one unfortunately.

ETA: Forgot to mention my car does an insane 72mpg on the route to my OH's work...he is a new driver so gets slightly less MPG (so may need to adjust budget accordingly, although if we move out towards his place of work this bill will come down) but still, I guess thats why our fuel bill is so low!

pennypusher

Hi As you are in such a fortunate position with a lot of money left over each month potentially I would suggest that you also save some for other things like replacement of all electrical items as they wear out (washing machine, tv, lawn mower, computer etc). If you make a list of everything and the cost of replacement you should be able to work out an amount to save each month towards them.

You could also have an emergency fund for any unforeseen emergencies that way you could relax knowing that if anything happened you would be able to cope without stress!!

dreamdreamer

Good SOA! If only we all had the foresight to do it BEFORE we wound up in masses of debt.

I agree you definitely need to budget for entertainment. Your expenses are very similar to ours (even our mortgage is £550!) and we budget £200 for entertainment. We actually spend more like £100 on a normal month (2 x takeouts, a cinema trip, a night in the pub and some 'odds and ends' and it's gone!) but the surplus allows us some leeway to do some fun stuff a few times a year, for example this year we've been to Alton Towers for 2 nights, had a weekend in Yorkshire, been to a couple of gigs etc.

Even counting this you've got a decent surplus - plug this into savings the DAY you get paid/get benefits. Not at the end of the month, because if you're anything like us anything in your current account will evaporate into thin air by the 31st! My other big tip for budgeting with a surplus is to have a couple of savings accounts, for example (and you can pick categories that fit you) we have an ISA for long term savings, a holiday savings account and a presents account. All go out by SO on the 1st to prevent temptation!

You seem to have done your homework, and your SOA looks reasonable and allows for an emergency fund to be built, so I don't see any reason that you'd get into debt again. Best of luck!

CompBunny

Hi!

I really appreciated the advice offered on here RE our SOA We moved into our own place just after Christmas, and have continued to live fairly frugally in order to put £500 per month into a savings account!! We are so pleased with ourselves after a history of debt, and feel really secure knowing that we actually have savings, in addition to things like a car account to save in advance for insurance etc.

In case it helps anyone in the future, my theoretical SOA was fairly accurate, but the following are different:
- Water is more expensive than projected, about £40 per month
- Our fuel costs have increased significantly due to living in the countryside and changing to a petrol car
- Our grocery spend has increased to £170 per month as we have more fresh fruit and vegetables now - we wouldn't have done this if we didn't have a surplus each month though
- We spend about £10 per month on takeaways (£5 Dominos pizza lunch time offer to share twice per month )
- More household costs that I hadn't thought of such as weedkiller or a new pair of garden clippers

The minimum £500 per month surplus is being plunged straight into a growing savings account. We are going to invest most of this in some treatment for my health problems and then continue to save for a rainy day or who knows even a house deposit one day.

It IS possible to go from in debt and panicked to savvy saver! I never thought it would be possible for us before, especially as only my partner works, but with some careful management we have done it. Wahooo!!!!

DyingToGetOutOfRed

Hey CompBunny,

Nice to hear everything turned out good for you guys. It is quite inspiring to read this

I wish you both all the best in future and for you personally that your health picks up again!

taren

Well done a I guess a great amount of effort and heartache has gone into getting you into this position.

I would also look at working out the cost for items such TV Licence and council tax/water rates, are these amounts just the monthly payment, and not the total divided into 12 months. I find working out the actual monthly costs, makes budgeting easier.

Plus if anything you pay monthly is likely to be charged intrest on, ie car insurance, start planning now and put this money aside, to enable you to pay the car insurance in one go, and other similar items.

You are in a lovely position, however living in your own home, will always have extra costs, simple things pop up, toaster, kettles etc, even just maintaining the property has costs, even if its rented.

I would also add 50% extra to your gas and elecrticity costs, as during the winter these will go up and sometimes even double, this way you could ensure no nasty surprises arrive afte the winter.

Well done and I wish you all the best...