Seriously Irresponsible Spender :( ..Desperately need advice....

in_a_pickle9

Hi All,

I am 25 and have never been responsible with money......I would love to be able to budget and have control over my finances but I just can't seem to learn........every month I draw up a spreadsheet with my income and expenditure with every intention of following it but never manage to follow it!!! I'm so frustrated with myself.
I have quite alot of debt, alot of it is due to drop off my credit file or is statue barred but the newer stuff I am paying monthly and would love to try and get it cleared off.
I am moving in with my partner next month and we are going to save for 6 month to rent a house together somewhere......however I've never saved a penny in my life, I just never stick to it!! I always end up spending and spending and thinking "I'll worry about it after"....not good as I end up borrowing money on a monthly basis and I have only just managed to pay off pay day loans and got through my first month last month without a payday loan!!
My wage is different every month as I get paid commission but I should still be able to get through the month and save.

My spending habits are beyond a joke, I buy random things that I don't always need/use and just spend spend spend and then a few weeks after payday....I'm broke, worried, anxious and stressed and generally borrowing money!!!

So what I was hoping for is inspiration, tips and advice on how to stick to a budget plan and build up a a decent amount of savings, I would love a rainy day fund and also savings so we can be comfortable to go rent a house in 6months time and buy the furniture we need.

Here is my SOA as it is now whilst I am living alone....



Monthly Budget Summary Amount(£)
Total monthly income 1,600
Monthly expenses (incl. HP & secured loans) 1,127
Available for debt repayments 473
UNsecured debt repayments 638
Amount short for making debt repayments -165
Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 0
Total Secured & HP Debt -0
Total Unsecured Debt -1,271
Net Assets -1,271
Income, Expense, Debt & Asset Details

Income Amount(£)
Monthly income after tax 1600
Partners monthly income 0
Benefits 0
Other income 0
Total monthly income 1600
Expenses Amount(£)
Mortgage 0
Secured/HP loan payments 0
Rent 450
Management charge (leasehold property) 0
Council tax 75
Electricity 40
Gas 40
Oil 0
Water Rates 20
Telephone (land line) 13
Mobile phone 45
TV Licence 12
Satellite/Cable TV 0
Internet services 10
Groceries etc. 200
Clothing 60
Petrol/diesel 0
Road tax 0
Car Insurance 0
Car maintenance (including MOT) 0
Car Parking 20
Other travel 0
Childcare/nursery 0
Other child related expenses 0
Medical (prescriptions, dentists, opticians etc.) 7
Pet Insurance/Vet bills 0
Buildings Insurance 0
Contents Insurance 0
Life Assurance 0
Other Insurance 0
Presents (birthday, christmas etc.) 20
Haircuts 15
Entertainment 0
Holiday 100
Emergency Fund 0
Total monthly expenses 1127
Secured & HP Debt Description Debt(£) Monthly(£) APR(%)
Mortgage 0 (0) 0
Secured & HP Debt totals 0 - -
Unsecured Debt Description Debt(£) Monthly(£) APR(%)
credit card min payme 500 50 0
wonga payment plan 411 59 0
moorcroft 200 39 0
rossendales 20 450 0
Iqor 60 20 0
sky debt 80 20 0
Unsecured Debt totals 1271 638 -
Asset Description Value (£)
Cash 0
House Value (Gross) 0
Shares and bonds 0
Car(s) 0
Other assets (e.g. endowments, jewellery etc) 0
Total Assets 0


HERE IS MY SOA FOR WHEN I MOVE IN WITH MY PARTNER WHICH SHOULD BE FROM SEPTEMBER PAY DAY

Summary

Monthly Budget Summary Amount(£)
Total monthly income 1,600
Monthly expenses (incl. HP & secured loans) 857
Available for debt repayments 743
UNsecured debt repayments 638
Amount left after debt repayments 105
Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 0
Total Secured & HP Debt -0
Total Unsecured Debt -1,271
Net Assets -1,271
Income, Expense, Debt & Asset Details

Income Amount(£)
Monthly income after tax 1600
Partners monthly income 0
Benefits 0
Other income 0
Total monthly income 1600
Expenses Amount(£)
Mortgage 0
Secured/HP loan payments 0
Rent 410
Management charge (leasehold property) 0
Council tax 0
Electricity 0
Gas 0
Oil 0
Water Rates 0
Telephone (land line) 0
Mobile phone 45
TV Licence 0
Satellite/Cable TV 0
Internet services 0
Groceries etc. 160
Clothing 60
Petrol/diesel 0
Road tax 0
Car Insurance 0
Car maintenance (including MOT) 0
Car Parking 40
Other travel 0
Childcare/nursery 0
Other child related expenses 0
Medical (prescriptions, dentists, opticians etc.) 7
Pet Insurance/Vet bills 0
Buildings Insurance 0
Contents Insurance 0
Life Assurance 0
Other Insurance 0
Presents (birthday, christmas etc.) 20
Haircuts 15
Entertainment 0
Holiday 100
Emergency Fund 0
Total monthly expenses 857
Secured & HP Debt Description Debt(£) Monthly(£) APR(%)
Mortgage 0 (0) 0
Secured & HP Debt totals 0 - -
Unsecured Debt Description Debt(£) Monthly(£) APR(%)
credit card min payme 500 50 0
wonga payment plan 411 59 0
moorcroft 200 39 0
rossendales 20 450 0
Iqor 60 20 0
sky debt 80 20 0
Unsecured Debt totals 1271 638 -
Asset Description Value (£)
Cash 0
House Value (Gross) 0
Shares and bonds 0
Car(s) 0
Other assets (e.g. endowments, jewellery etc) 0
Total Assets 0

Triggles

The following could be trimmed:

mobile - £45 per month is huge. look at cutting this down.

groceries - £200 per month for one is also a huge amount. Is £160 per month half your total for two adults?? You should be able to easily manage on £160 per month total (meaning if you're paying half, only £80 per month).

clothing - do you really spend £60 per month?? look at dropping this quite a bit

holiday - if you're in debt to the point where you've been using payday loans, you'd be better off forgoing the holiday for a year and using that £1200 to pay off a debt. It makes no sense to be £165 per month short on paying your debts/bills, but you have £100 to put aside for a holiday. Priorities.

I notice you have nothing for contents insurance and life insurance and very little for presents. Do you really only spend £20 per year on presents for birthdays and christmas for everyone?

Also, you have £40 per month for parking, but no car expenses - MOT, insurance, tax/licensing, petrol, repairs, maintenance. Do you have a car? If no, what are you parking? If yes, you need to budget for these other expenses.

R_P_W

Its very hard to read your SOA in current format but from what I can see is that you are just over £1200 in debt at the moment? You take home ~1600 a month.

You two SOA are very confusing too - seems to be stuff missing from the 2nd one? Is that because your partner will be paying those things (i.e. TV licence)?

Your expenditure at the moment excluding any debt payments is just over 1200 a month.

You should be able to pay off your debts quite easily BUT only if you cut back on your spending. You know you have a problem, you know what the solution is. Nothing anyone on here can tell you is going to make it easier for you I'm afraid. It isn't always easy to change habits ( i was once the same) but once you start to see your debt reduce and you can see the possibility of starting to save it is a better feeling than spending.

So you need to sit down go through all your outgoings and cut back what you can, try and have 2 months of being very very strict with yourself.

in_a_pickle9

Hi Triggles,

Thanks for your reply. I am in a 2 year contract with T-mobile, which ends November 2013, I will contact them today and see if I can reduce my monthly tariff.

As for the groceries, I will try and budget for this, to be honest I generally just nip to the supermarket here and there and spend much more than I should, all these £20- £30 a few times a week soon add up, so this is something I need to get under control.

Clothing, I probably spend this on average a month, but probably do it once every 4 month and spend a few hundred, mainly on work suites, work shoes and tights as I have to look very smart for my job as I am meeting clients every day. I will try and cut this down.

Holiday is the only thing I look forward to, so it would be hard to let this go but I agree that I should maybe knock this on the head until I can afford it.

As for the parking, my partner lives in a city centre where you have to pay to park, I resent this and it frustrates me but I haven't much choice, I will be moving there next month while we save for 6 months so it will be mainly saturdays I have to pay as I am going to make sure I stay at work until after 6 when it is free parking.
I do have a car but luckily it is a company car, so the expense comes straight out of my wage via tax (including fuel).

I don't have any insurances, is this something you would recommend getting?

in_a_pickle9

R_P_W wrote: »

Its very hard to read your SOA in current format but from what I can see is that you are just over £1200 in debt at the moment? You take home ~1600 a month.

You two SOA are very confusing too - seems to be stuff missing from the 2nd one? Is that because your partner will be paying those things (i.e. TV licence)?

Your expenditure at the moment excluding any debt payments is just over 1200 a month.

You should be able to pay off your debts quite easily BUT only if you cut back on your spending. You know you have a problem, you know what the solution is. Nothing anyone on here can tell you is going to make it easier for you I'm afraid. It isn't always easy to change habits ( i was once the same) but once you start to see your debt reduce and you can see the possibility of starting to save it is a better feeling than spending.

So you need to sit down go through all your outgoings and cut back what you can, try and have 2 months of being very very strict with yourself.

Thankyou for your reply.

Is there an SOA you recommend which I can re-post using?

I will be paying my partner a set amount every month and he will continue to pay the bills, which will be good for me as I have always lived alone for 8 years and have had to manage all the bills, it will be nice to just hand over a set amount until we move in to our own place in 6 month.

I know I have a problem and my self discipline is shocking, I really really want to change this I hate the way I behave with money. I also spend about £120 a month on cigs so I have just bought an electronic cigarette to try and stop smoking as this will save me a good chunk of money.

Thankyou for your advice x

rebeccatom

From what you have said I think there is quite a bit of surplus spending that is not shown on your SOA.

I would suggest doing a spending diary so you can see if the above figures are true and where you are overspending.

When I did my spending diary i found i instantly sent less as i didn't want to put it in the diary.

Triggles

The parking is a necessary evil unfortunately. The only reason I questioned it was because you had parking expenses but no vehicle expenses. If it's a company car and they pay all expenses, that makes sense.

If you are renting, then contents insurance is a good idea. Life insurance, I guess that depends. We have children, so obviously life insurance (and a will) is a must for us. If you have anyone that relies on you for assistance (elderly parents, siblings, partner, whatever) it never hurts to look into it. You can get good term coverage at a number of places for as little as £5 per month.

Good idea to quit smoking. Every time you think about lighting up, just picture yourself puffing away on a rolled up five pound note... you may just as well smoke the money itself, it's such an expensive habit. The smoke also causes discolouration to your clothing, teeth, and most likely car interior (if you smoke in your car). That not great either.

As far as clothing goes, I can see the need to replace tights, as they are irritatingly easy to damage. You can minimise wear and tear on your shoes by taking good care of them, for example, I always kept a pair of flats in my car, and slipped them on (and the heels off) when driving. Easier to drive in, and less wear on the good shoes. Also helpful if the weather is rainy or snowy, as you don't have wet feet that slip off the pedals. Your work suits should last longer than 3-4 months. Are you replacing suits/outfits that have actually worn out? Or are you simply buying new because you're looking for a change. If wearing out, look at why it's happening so you can remedy it. If looking for a change, try using different accessories - new look with less expense.

As far as grocery shopping is concerned, if you meal plan, it will be much less expensive. You also won't have to keep popping back into the shop throughout the week, which is the "kiss of death" at our house. The more frequently we go to the shop, the more impulse buys we end up with. We try to avoid it at all costs.

Once you've figured out your budget for expenses, then figure out what you have left over. Even if it's a small amount, put a little aside for emergencies, then use the rest to start paying off your debts. Then as you pay off one debt, use that money towards another debt, and so on. Once the debt is paid, make sure you put that money you were putting into debt into savings instead.

As far as spending, you'll have to develop that self-discipline. And even though your partner is handling all the bills, make sure you know what is going on. Not because of any trust problems, but simply because if he is ever ill or called away for some reason (work/family/whatever), you need to know how to handle the accounts just in case.

XXSCOTSLASSXX

On your soa the Rossendale debt shows as £20 .... Monthly payment as £450 per month am assuming this is an error and figures have been inputed in wrong order .... therefore once amended ul have an extra £430 available for repayments??

gfplux

Does your partner know of your irational and erratic behaviour. Have you discussed it with them. Maybe they can be of help.

rising_from_the_ashes

Haven't looked at the SOA in detail (the "normal" MSE one is here http://www.makesenseofcards.com/soacalc.html).

Just wanted to say that I was you IYKWIM a couple of years ago.

I've never managed to budget properly and when annual things came in, they just got stuck on an ever increasing credit card balance:o

Best advice I was ever given - set up a separate account for all your bills. Transfer a set amount each month to cover them (and a tiny bit extra if you can for the odd emergency) and don't touch it ever

You never need to worry about d/debits not being paid, what's really left in your account etc:T

Re everyday budgeting for annual bills, I now also have 3 savings pots (I did get up to 12:o:o when I first started as was worried about combining them!) - House & Car, Pets and Others (clothes, dentist, presents etc).

I keep a spreadsheet for each one and note the transfer amount each month and the money to be paid out each month (I pay everything on my credit card & clear each month so only one payment in & one payment out each month which makes it nice & easy:)).

Touch wood - is working really well and is starting to get easier (I had to overpay pots at the start to get them to enough money to pay stuff that fell early in the year).

Treat the pots like the d/debit account - nothing is taken out of there, unless it's for that particular thing. HTH & good luck:)

theoretica

You are moving in with your partner to save, but don't have savings down on your SOA. Is the agreement that you will pay your debt off fast before you save? I suggest you make your debt overpayments, or payments into a savings account directly after payday so you don't see tempting money left over.

As you have a spending problem can you change your habits so you stop spending time near shops or other places you are likely to spend? Do you have hobbies to take up your time away from shops?

What have you bought you could sell? Selling things on (and seeing how much less you get than you paid) may reduce the attraction of buying, as well as paying off some debt, and perhaps using up time when you might be tempted to buy.