How can I organise my budget/finances when money comes in in dribs and drabs?

ElleWoods

My income comes into my bank account in dribs and drabs throughout the month, on dates which often don't tally with my outgoings. I'm finding it hard to budget and impossible to get rid of my overdraft, because I often don't have enough money in my account to cover all my outgoings as they occur which means I'm living off the OD for at least a part of each month. I really want to clear my OD but seem to be getting nowhere, and would really appreciate some suggestions. In a nutshell this is what happens:

25th of each month - Salary in
26th of each month - Rent out
1st-4th of each month - Direct Debits out
1st Tuesday of each month - Tax Credits in (NB: due to July having 5 Tuesdays, this will change to the last Tuesday of each month from the end of this month).
2nd and 4th Monday of each month - LHA
2nd Tuesday of each month - Child Benefit

So, in more detail, I get paid my salary on 25th of each month (£830), then the day after I get paid my rent comes out (£500) which leaves me with just over £300. This is assuming I'm not overdrawn on the day I get paid, that is, as if I am I'm left with less - sometimes I'm so overdrawn when I get paid my salary that I go straight into my OD again once my rent comes out .

Between 1st and 4th of each month all my DDs come out (approx £230), leaving me with about £100 at most (depending on OD) to buy food, petrol etc. I then use this money and/or my overdraft to live on until I get my tax credits (£370). As I'm usually already OD by then the TCs just about pay off the OD, sometimes taking me a bit into the black. The week after that I get my child benefit but at £81.20 it only makes a tiny dent in my OD. Each week I need to buy food, petrol, bits for DS etc, and if I get any unexpected bills e.g. car repairs, I can't afford them so they have to go on the overdraft.

I've also got just over £2k debt on 0% CC which I'm paying off slowly but surely. However due to the above I always seem to be paying it off using my overdraft - so I'm using one debt to pay another. This, of course, makes me even more overdrawn.

It's like a vicious circle I can't escape from. If anyone has an idea of how I can organise my incomings/outgoings better to enable me to solve this, I'd be so grateful. If I could just get rid of the overdraft it would be a massive financial and psychological lift and I could then totally concentrate at getting rid of the CC debt.

Thanks for reading this far and not falling asleep .

iolanthe07

The best way to counter these problems would be to build up a 'float' in your bank account. This might be achieved through a windfall - say a gift from parents - or failing anything like that, just saving a few pounds a month. You need to aim for £100 minimum, and this would provide a cushion to absorb the times when you are waiting for income. Banks used to offer budget accounts that worked like this; maybe some still do.

ElleWoods

Thanks, I'd love to do that but I just don't have the funds - as I mentioned, I have to use my OD to pay my credit card! So there's no extra. Obviously if I came into any additional money it would go straight in there. £100 wouldn't be enough anyway - I've looked at the last few months and I average approx. £400-450 overdraft each month. I need to pay my car tax (£190) at the end of August and guess what? It'll come out of my overdraft. I'd love to have some spare to build up a buffer but it's impossible at the moment.

Tixy

If you look back at the worst point of your overdraft each month for the last few month is that high point of your overdraft always at the same time? is it just before payday?

And is the worst point around the same each month - or is it getting slightly better each month (or worse)? Thats really the key thing to look at rather than going in and out of the overdraft during the month.

If the position is improving month on month then whilst it would be nice not to be in an overdraft as long as you keep on as you are then you will gradually work your way out of your overdraft.

If the low position is staying static or getting worse then you are not paying anything off the overdraft and you may need to rethink your budget somehow to reduce outgoings so that you do gradually get out of it. If this is the case - have you done an statement of affairs recently to see if you can spot any savings /reductions and see how much you should be able to reduce it by each month on paper?

tealady

Hi
If you list your incomings against your routine direct debits are they covered by your salary. If they are can you use your family credits for food shopping? The best thing TBH is to have a month of living on all but the absolute basic (ie no take aways, mags or treats) then you may be able to clear the OD for good.
You may want to have a separate bills account and transfer enough money to cover them all each month, you can hopefully then see what you have left for other things.
Also if you post your SOA (sticky at the top) we may be able to point out ways to cut back.
HTH

his_missus

Would it be possible to move some of the DDs to later in the month so they can be covered by tax credits or LHA maybe, leaving you with a little more money on the 4th of the month?

YoungBusinessman

Just build up a cushion, get at least £100 a month(even if you have to work some overtime to fund this) And build it up till you have a couple months expenses as a buffer and make that your £0.

cutestkids

sometimes the easiest solution to this is to change the dates of the direct debits as it seems t the moment that you have more going out in a short time scale than you have coming in at that time.

This only works if you actually have enough coming in every month to cover your outgoings otherwise you are just shifting the problem about.

I would sit down and do a complete list of your outgoings and income every month and check that you are not spending more than you have.

If the case is that changing a few direct debits to a later date in the month makes a difference to your budgetting then thats great

I do sympathise with you, my OH is paid weekly on a Friday for his main job, weekly on a Thursday from his second job and I am self employed so my income fluctuates all our bills etc are monthly and some months the way dates fall etc it can be a nightmare, I constantly have to think several weeks ahead and it is not easy.

ElleWoods

Thanks everyone. I'm salaried and we don't get paid overtime so that's out of the question. I've been ebaying like mad to bring in a bit extra but not made enough to pay off the OD.

My OD seems to occur during two points of each month - just after my rent and DDs have gone out, then again the week before I get paid - and it reaches roughly the same level each month (however next month it's likely to rise due to my car tax being due). I've posted an SOA before but will do a new one in the next day or so and see if there's anywhere else I can cut back.

I just constantly seem to be fighting this overdraft and it's so demoralising, but hopefully with some good advice on here I can sort it out.

frugaldances

hi there,

i was hvaing this problem where everything came out at the same time so i requested to pay my rent on a diff date later on in the montha dn they let me.

dancingfairy

If you moniter your overdraft for a few months and it hits the same (or lower) as tixy said then you're winning (because you're also paying off your credit card).
Depending on how much the minimum is on your credit card and how much your paying you could reduce the amount you pay towards your credit cards and then pay the rest to the overdraft - so if you normally pay 100 to the credit card then pay 50 to the credit card and leave 50 in the account, then next month instead of ending up 400 overdrawn you'd aim to hit 350 etc etc.
I'm wondering whether you can transfer 400 pounds (or 500 to be sure) from your overdraft onto a credit card and then try and make sure you stay in the black. You will then be able to judge each month more easily whether you debt is going up or down by how much is outstanding on the credit cards. The easiest way to transfer it on to the credit card would be to buy your spending on your credit card rather than from your current account (that is assuming that you would get a good deal on spending on your current credit card), alternatively apply for another credit card and do the same trick. It would be handy if you could get the credit card to pay off the overdraft but I don't think any of them will do that for you these days?
How much is the overdraft costing you in interst every month? If it's not costing you a huge amount then I'd just ignore the psychological thing of being in the overdraft and just pick a certain date each month to compare your total debt levels (ie add the overdraft and credit card together and compare it on the 15th of the month each month or something).
Best of Luck
df