Mummy's attempt to budget & save.

Mummy_Moo

Thought I'd have some pennies left over to go towards the overdraft at the end of this week, but just noticed that nappies are on offer in Tesco so I've stocked up. Needed more anyway so may as well take advantage of the discount. I did get £11 selling my old Christmas tree though (only cost me £15 a few years ago), so it has been a pretty good week so far. Question is, can I behave myself at the Christmas fair this weekend????

innovate

Mummy_Moo wrote: »

Question is, can I behave myself at the Christmas fair this weekend????

Answer: yes you can, you just need to want to :cool:

Eco_Miser

I've just read your entire thread. Congratulations on starting to act.

Mummy_Moo wrote: »

Ok everyone. Thank you for this much needed kick in the right direction. You're all right, I was just being silly holding on to the savings and paying for the debt. You'll be pleased to hear I've done as I was told my balances are now as follows.....

Long Term Savings - £0
Short Term Savings - £0
Car Savings - £142.06 (This account covers all my car bills, insurance, MOT, tax etc)
Weekly Budget Account - £35.00
Credit Card - £0
Main Bank Account - £409.96 overdrawn

You've still got £175 of debt on which you are paying 19% unneccessarily. Get the remaining savings transferred as well. At the worst your overdraft will return to its present level when you have to pay for what the savings are for, meantime, you're saving interest. Yes, it is scary having no savings, but you have a credit card and overdraft facility to cover emergencies, or even routine payments if needed.

Like many people, You have designated accounts for particular purposes, and act as though those amounts are completely separate and non-interchangeable. They're not. They are all your money (or your debt).

Distribute you money across your accounts in the way that makes you most or costs you least, not in the way that helps you remember how much you've put aside for some future payment. Use a spreadsheet for that. It's more efficient, and takes account of future as well as past income.

(My spreadsheet has probable future payments, withdrawals and incomes, required transfers between accounts, and how much surplus (if any) I have/expect to have, planned out until April 2013 (will be April 2014 in January))

Ifts

Mummy_Moo wrote: »

- My Credit Card - which I keep promising to stop using!

Credit cards have their advantages (esp if you clear the balance each month).

I didn't have one for a long time and a friend suggested getting one many years ago, they said to me because you have never had credit (apart from mobile phone bill) it will actually help with your credit rating (something to do with credit ref agencies being able to see you are paying off your debt on time).
Now I spend on the credit card and have it set up that the balance gets cleared each month, so I get to use the money for free through out the month and it helps with my credit rating.

Also some credit cards have added benefits/rewards when you use them.

I saw this article over on the Monevator.com blog listing some of the benefits of using a credit card:

http://monevator.com/best-credit-cards/

Mummy_Moo

Hi Eco Miser,
Thanks for the advice. I appreciate I could slice an extra £140 off the overdraft by moving the money from the car savings, but I've really struggled with big annual car bills in the past. Much as I have good intentions, I don't want to be relying on the overdraft for such bills, I know I'm more likely to spend it if it's in my main account, whereas the car account is only touched for car things. I know this is costing me in interest at the moment, but I think I'm saving more in the long run by being able to pay for insurance and tax annually rather than monthly. I know technically the money is still available as I have the overdraft, but I there is a much higher risk of it being spent. Similarly I would like to keep my weekly budget account. I set it up because it was getting difficult to keep track of a £35 per week budget in an account that was overdrawn by hundreds with a constantly fluctuating balance.

I know these separate accounts are costing me money, but I would like to keep them, as they make things simple and manageable. I have used spreadsheets and notebooks etc in the past but this is what I have found works best for me, and if for the next month or two I have to pay for this (due to being overdrawn) then so be it. I'm not intending to stay in the overdraft long term, so fingers crossed this will be a short-lived problem.

Thanks Ifts. I have thought about doing that with a credit card before. Once I've got myself straight I will definitely look at using my credit card with a direct debit to pay off in full every month. I'd like to get a Tesco credit card so I can be earning extra clubcard vouchers, but last time I applied I didn't pass the credit check so I'm leaving it for a while before I try again

psychic_teabag

moneysupermarket says "In fact, research from moneysupermarket.com found paying monthly for motor insurance could add as little as 5.34% to the overall cost." So it could be costing you 19% on your overdraft to save 5%.

The tesco credit card didn't strike me as particularly generous. You get an extra 1 pt per £4 spend, so it's equivalent to about 0.25% cashback. (A bit more with voucher exchange). With an aqua card, you get 3% cashback. Aqua specifically target people with poor credit scores, so you might have a chance with them ?

Mummy_Moo

Oooh thanks psychic tea bag, I've never heard of Aqua but I'll have a look at them

psychic_teabag

See all Martin's suggestions at http://www.moneysavingexpert.com/cards/bad-credit-credit-cards

Mummy_Moo

Hello,
Sorry I've been quiet for a while, baby and I have both had norovirus. Well all Christmas shopping is finished, the fridge is full and I've still managed to pay £36.50 off the overdraft. Also sold a few bits and pieces on eBay, made about £10, which paid for an extra Christmas present for baby.

Overdraft Balance Today - -£288.90

Mummy_Moo

Merry Christmas Everyone!!!

I'll be back with updates in the New Year x x x