Mummy's attempt to budget & save.

Mummy_Moo

Hi everyone.

I've just read a thread about someone trying to build up their savings and was inspired to start my own. I'm hoping this will act as an incentive for me to behave with my spending, and fingers crossed pick up some money saving tips.

I'm a 23 year old single mum with a one year old daughter. I was employed full time from the week I finished uni until the end of my maternity leave. I'm currently unemployed but am looking at retraining and getting back to work.

I've got a system for managing my money which may sound overly complicated but makes sense to me....
- Main Bank Account - where all my money goes in and all bills go out by direct debit (currently overdrawn by £775)
- Weekly Budget Account - where I put my spending money for each week (£35) for food, petrol etc.
- Long Term Savings Account - because I would like a mortgage once I'm in a better position (current balance £773)
- Short Term Savings Account - for treats and expenses not covered by the weekly budget (currently empty)
- Car Savings Account - to pay for annual bills including insurance, tax MOT etc (currently £112)
- My Credit Card - which I keep promising to stop using! (currently £203)

I've got standing orders set up to pay money into my weekly budget account, each savings account and my daughter's savings account each week. All bills are on direct debit.

The original plan was to build up a nice little lump sum in my short term savings to pay for things like Christmas, but recently I got a bit carried away. I spent quite a lot on my daughter's birthday (which was last week), and have already bought all of her Christmas presents, hence the empty pot and the credit card. I've also treated myself to a couple of meals with friends and some new clothes so now it is time to start behaving and get that credit card and overdraft under control. Any advice and tips welcome and I'll update you next week with my progress.

CLAPTON

is your OD interest/fee free?

Mummy_Moo

No, unfortunately not. It was until a few months ago, but then it changed from a graduate account to a normal current account and the interest went up to about 19%. I know I'd be better off emptying the savings account to pay it off but I feel nervous about having nothing in the savings pot. Hopefully knowing that the interest is awful will push me to pay it off as quickly as possible. I'm going to try and see my bank soon, see if they can switch me to a better account. Fingers crossed!

Consumerist

Do you normally pay off your credit card in full and on time very month? If not, then now would be a good time to start doing that. Keeping the card clear of long-term debt gives you a cushion for the odd unexpected expenditure.

Set yourself a target date to clear the overdraft - make sure you don't set yourself an unattainable goal, however.

There is probably much you can do to save on your expenditure so I would advise copying your post over to the <Debt-free Wannabe forum> for loads of helpful advice from many in the know. Please put a note on this thread if you do that so people don't post further comments on this thread.

Good luck with your saving.

Mummy_Moo

Thanks Consumerist.

I'm normally pretty good with paying off my credit card in full, the only reason it's higher at the moment is because I used it to buy my daughter's birthday and Christmas presents. The highest it has been recently was £500 (the limit) about a month ago, and I've already brought that down to £200. I'm hoping I can have it paid off completely in the next 4-5 weeks.

My overdraft always fluctuates as money goes in weekly, fortnightly and four-weekly, and comes out monthly, quarterly and bi-annually. (Hence the reason I set up the weekly budget account, otherwise it was just impossible to keep track of). As soon as the credit card is paid all of my spare pennies will be going to the overdraft to get me back in the black. I've also requested no presents but money instead from my lovely family for my birthday (in a few weeks) and Christmas. Fingers crossed I can get the overdraft paid off by the end of January.

Up until now I have been paying £10 per week into each of my short & long term savings. To try and speed up the debt clearing I'm going to pause this for a while and try and get everything paid off. So that will be a minimum of £20 per week towards the credit card & overdraft. Once that is sorted I can get back to saving

I've resisted the very strong temptation today to nip to the corner shop and stock up on chocolate, or go to the chippy. No excuse really because the house is full of food, just fancied a treat. But I'm being good and have spent absolutely nothing today. I've also just sorted out a few bits and pieces to pop on eBay tonight, so it's been a pretty good day.

Cyrus

If the OD and the CC are costing you money then it is logical to clear the balances with your savings.

With an OD and a CC you still have available funds for an emergency even if you have no savings.

Mummy_Moo

Well today has turned out to be quite expensive. Went to a local pottery painting place with my daughter and made a plate with her hand prints on (£12). The took her swimming this afternoon (£1.50 swimming + £1.00 parking). Both of which I had planned, and was quite happy with the cost so we could do something nice together.

But after that I got home and bumped into the window cleaner (£3), and checked my Vodafone bill My ex convinced me to take out a contract for an iPad, saying he would transfer it over to his account after 3 months (he couldn't take it out on his own account straight away due to poor credit rating). He never transferred it, stopped paying his own bill and ultimately got cut off. He still has the iPad but I have been paying the £30 per month bill, except this month he has gone over the data allowance, so the bill was £62. The contract doesn't expire until February 2014 and the early repayment fee is £380. I've been in touch with him and he has offered to pay me £15 per week. Fingers crossed that works out ok

On the plus side, I have now cancelled the standing orders into my savings (temporarily). One had already gone through so I've used that to pay an extra £10 off the credit card, and I've got cash left in my purse from last week, which hopefully I can make last the whole week, allowing me to use this week's money to chip away at the credit card even more.

Ifts

Mummy_Moo wrote: »

and checked my Vodafone bill My ex convinced me to take out a contract for an iPad, saying he would transfer it over to his account after 3 months (he couldn't take it out on his own account straight away due to poor credit rating). He never transferred it, stopped paying his own bill and ultimately got cut off. He still has the iPad but I have been paying the £30 per month bill, except this month he has gone over the data allowance, so the bill was £62. The contract doesn't expire until February 2014 and the early repayment fee is £380. I've been in touch with him and he has offered to pay me £15 per week. Fingers crossed that works out ok

If not and you continue to have problems with getting the money as promised, could you not contact Vodafone and try to get the contract reduced to the cheapest tariff possible until it expires. Its worth trying to see if they would allow that.
Failing that ask to have the data allowance capped to whats included in the contract fixed at £30, so there is no possibility to go over the data allowance, then hopefully you wont have any unexpected surprises when you get your bill in the future.

Mummy_Moo

Having a clearout to make some space. Just sold my old iron (£5) and ironing board (£3).

Mummy_Moo

Ok, well last week's budgeting didn't go very well, had a few days out with baby and got a bit carried away buying new Christmas decorations (but did get a new tree with my clubcard vouchers in the Tesco exchange). Paid £17.11 off the credit card, bringing the balance down to £186.16, the overdraft isn't looking any better though
I was hoping that this week would be better, thought I'd get some 'free' Christmas presents using by left over clubcard vouchers, but the Tesco Photobook creator won't let me use them, it only takes credit / debit card, still they were buy-one-get-one-free, so I'm still happy, £30 for Mum, Dad, Nan, Grandad, and Nan, and a copy for me, not bad. Got some old bits and pieces for sale (including the old tree) so hopefully I can make a some extra pennies.

Wish me luck, this doesn't seem to be going well so far.....

MrOrchard

The best advice is already on this thread, use your savings to clear the debts.

The savings are earning nothing, interest rates are pitiful
The debts are costing you LOADS
Once the debts are gone the savings will bounce back as you can save the money normally put aside for debt repayments

You also need to take this more seriously, it's always the little things (bit carried away with decorations) which start long term problems.

These forums are a wealth of advice, but only you can actually act upon it.