no debt, no savings, no assets, just blah. HALP!

karmachilovething

Hi lessavyfav

I recently turned 30 and it was my (third!) "lightbulb" moment. However, I am in debt and I have no savings fund.

I understand the idea with not wanting to miss out on an evening out in case you miss a good time, but think really carefully about whether these experiences are worthwhile. I've found that my best/most fun nights are long (and frankly drunken!) dinner parties with my favorite friends, so I no longer mind missing average/poor pub nights with people I don't really care about, which cost a lot more money.

I'm sure I don't need to tell you that London has LOADS of great things to do for free. If you're into your bikes one of the Fixy-SS societies does this photo treasure hunt thing that sounds awesome! (I have some friends who do it). And museums, and cheap eats at Brixton village. Probably teaching Granny to suck eggs, no doubt, but I think living in London can be a blessing or a curse depending on what you choose (and they're all choices, and it's all within your power to make those choices) to spend you money on.

You've had some good SOA feedback already, and you know it's not the most accurate because it says you should have surplus and you don't.

To all those good comments I'd also add that your groceries bill could be cut. I spend about £60-90 a month, and I preference organic produce and I eat meat. Start a spend diary (either paper, or excel) as it will give you the best idea of where your money goes, and highlights how much goes on the odd coffee/magazine/sandwich.

Good Luck!
KarmaChi

Idiophreak

I had to put paragraphs in this to read, figured other people might enjoy them too

foxgloves wrote: »

Hi, I'm going to answer this because when I was almost 30, I too had a 'wobble' regarding my finances.....I was hopeless at budgetting....I just never did any & overspent my income every month without fail. I did manage to buy a small house around then, because a relative died & left me enough for a small deposit, but Lightbulb Moment vanished again & I continued to overspend & borrow until I was 40......yes another decade of having no emergency funds, etc, & worry, all my own silly fault, & I read your post & thought OMG, it's like me all over again, right down to the high hair colouring costs!!

Please get a grip now. Right now. Keeping up with the Jones is the worst excuse for spending money you can't afford. The good news is that you don't seem to have debt at the moment, but it will come if you don't set & stick to a realistic budget becuase you are already aspiring to a lifestyle you can't afford. The other good news is that you have room for manoevre in your SOA. It will take a change of mindset. You have the choice of carrying on as you are, spending mroe than you have to spend on unnecessary stuff OR you can cut that right back & start an emergency fund.

I didn't get together an emergency fund till I'd finished debt-busting & it's such a relief to have one, especially in tough times. My advice would be the following:

1) Reduce your mobile contract. Mine is £12-ish a month, came with a decent smartphone & all the mins, texts, data I need,

2) Cancel the cleaner. Do a bit more yourself just temporarily if necesary, but if you are moving out soon, no point in paying for your mucky housemates to be left a nice clean pad!

3) £100 a month on haircuts......that is breathtakingly unaffordable. I used to have my hair professionally coloured bright copper & was often 'talked out' of doing my colour at home by the salon as I couldn't guarantee the colour it would turn out from all the processing. I decided to go ahead anyway.... so only £5-99 every 5-6 weeks. My hair is still copper, has not gone yellow, green, weird orange or any of the other freaky shades I was threatened with!!

4) £425 a month on entertainment???? This is enough to build a decent emergency fund on its own!! That's far more important to you at the moment than all this eating out, drinks, etc, & needs to be cut WAY back, as you know.

5) £80 a month on clothes. Too much if you have no reserves. Cut this sum in half & buy better then you'll get maximum wear out of everything & stuff will go together better.

From these cuts alone, I'd estimate you can save about £400 a month into a separate account for emergencies OR if you don't have any emergencies, it'd build up a very nice deposit on a house. That's around £4,800 a year from my basic calculations. Who in their right mind would turn that down? If youo are not sure where your surplus is currently going, do start a spending journal. Even though we are now debt-free, I still sometimes do this for a couple of weeks if I think my money's started leaking away on nothing.

You can turn this around.....just do it now & don't wait another decade + like we did! Good luck! x

Idiophreak

...and just to add to foxglove's central point - if you stopped frittering that £400 away, that would be the equivalent of maybe an £8k pay rise? Just for doing your own hair and eating out / drinking a little less? Sounds like a good deal to me.

I give myself £200/month spending, to include going out, lunches, hair cuts and clothes and have to say I enjoy a pretty good quality of life still - I eat out a couple of times per month, have the odd takeaway, buy clothes when I need them and go out a bit. Occasionally I have to have a quiet week to stay on track, but it's really not that hard.

tlh858

lessavyfav wrote: »

Medical..well I haven't had to get any medicine or paid prescriptions since I moved here 2 years ago.

Dentist - even a basic NHS check up will cost £17.50, which twice a year is already £3 per month.
If you haven't been to a dentist for 2+ years, you really should do - otherwise small problems which you may not yet be aware of can turn into much larger ones which will be expensive and time consuming to fix.

lessavyfav wrote: »

I don't have any contents insurance, is this bad? don't shoot me!

It's not 'bad', but consider this - if you returned home tomorrow to find the entire place on fire, how much would it cost to replace everything you own?
Also consider that you have no emergency fund, so no money to replace even a single item.
Contents insurance is cheap (provided you don't have silly things such as accidental damage cover).

lessavyfav

Thanks all, there is some really valuable advice in there.

A question I have: how do I reduce my mobile contract? I am currently paying £36 a month on a 24 month contract and still have more than a year of that contract left. Is there room to negotiate within a certain time period or do I need to wait until the 24 months is up?

As much as I love my hairdressers, I'm going to stop going there and find something cheaper, possibly do it myself. Looking at that cost and realising I spend around the same amount on groceries/toilet paper/washing liquid/etc makes me a bit sick!

I have done the ebay thing earlier this year..such a pain to set up and then post everything (often for not that much money) but the extra £40 or so here and there along with decluttering was good! I will do this in January..I have everything I need for winter (although lost my one and only warm and decent wool scarf ) so no need to buy any new clothes or shoes.

As for my holiday fund, that one is high due to my family living in Australia. I am not going back next year but for the past two years I have gone back and it isn't cheap.. ! For the next year I have a very cheap ski holiday booked for my 30th and my other plan is to go to Barcelona for a festival. Won't be spending loads on accommodation or food in Barca, ski trip is paid for in full now other than a bit of spending money.

KarmaChi, can I ask how you have such a low food budget including meat? I was thinking of getting organic veg box once per week (which is about £7 for what looks like a very decent amount of produce) but not sure where to go for meat. Sainsbury's is my closest supermarket and I tend to go there because it's close but it certainly isn't that cheap..would loveee to eliminate using big supermarkets all together if I can.

Eek, haven't been to the dentist in the UK yet ! Last time I went back to Oz, I went to the dentist (and no issues), but I probably need to allow for that sort of thing in the future.

Right, need to get contents insurance sorted!

ellesbellesxxx

Hi!
Well done for realising things need to change
Was going to suggest using vouchers for eating out - loads on here, or mystery dining.
We never pay for cinema as use tesco clubcard vouchers but alternatively there is orange weds.

If you ring your mobile phone provider you should be able to drop a tariff as you are a year into your deal.

Do you get groupon emails? I am always getting deals for hair through, latest 13 pounds at top salon locally! I only get my hair cut twice a year (very long hair!) and don't colour it and it costs me a max of 17 each time so max of 34 a year. £3 a month. Easy to cut down on xx

lessavyfav

as soon as it hits to a year in, i'll call my phone provider and see if they can lower my tariff.

I've been pretty good since I last logged into the forum..spent very little on christmas eve, and nothing on Christmas Day, Boxing Day or the day after..yesterday I popped into work and thought I'd treat myself to lunch with a friend seeing as I planned to stay in at night. Unfortunately, the place we wanted to go for a £5 lunch was shut so we headed to Vietnamese..which somehow amounted to £10.50 each! Service charge added on straight away by staff, and the meal wasn't as good as it has been. Felt disappointed and ripped off.

Normally at the weekend I like to treat myself to a cafe bought coffee but today I resisted! Went through my cupboards and sorted through what needs to go to charity, ebay, 2nd hand designer boutiques..it's now just a matter of actually getting the motivation to put stuff up on ebay. I have a bit of a short attention span

Now I have a friend's birthday lunch at a pub tomorrow but I'm not drinking..I think it'll be hard explaining to the friends as they will just say 'oh come on, here's a drink on me!', and they will genuinely want to do that for me, but I still can't help but feel so guilty and end up wanting to contribute to a bottle of wine. NYE is also going to be a bit expensive as I have a friend visiting for a few days...but going to try the whole drinking water in between just to space things out!

Reviewing my goals, I really do want to pursue the small business idea I have, which felt very much overwhelming before seeing as I have a very strong vision (one that involves a lot more money than I have). However, I'm going to start very small as a side/weekend venture and see how I go over the next few months. I am currently writing a business plan, which is keeping me busy and outta the pubs/hairdresser/shops/cafes

lessavyfav

karmachilovething wrote: »

Hi lessavyfav

I recently turned 30 and it was my (third!) "lightbulb" moment. However, I am in debt and I have no savings fund.

I understand the idea with not wanting to miss out on an evening out in case you miss a good time, but think really carefully about whether these experiences are worthwhile. I've found that my best/most fun nights are long (and frankly drunken!) dinner parties with my favorite friends, so I no longer mind missing average/poor pub nights with people I don't really care about, which cost a lot more money.

I'm sure I don't need to tell you that London has LOADS of great things to do for free. If you're into your bikes one of the Fixy-SS societies does this photo treasure hunt thing that sounds awesome! (I have some friends who do it). And museums, and cheap eats at Brixton village. Probably teaching Granny to suck eggs, no doubt, but I think living in London can be a blessing or a curse depending on what you choose (and they're all choices, and it's all within your power to make those choices) to spend you money on.

You've had some good SOA feedback already, and you know it's not the most accurate because it says you should have surplus and you don't.

To all those good comments I'd also add that your groceries bill could be cut. I spend about £60-90 a month, and I preference organic produce and I eat meat. Start a spend diary (either paper, or excel) as it will give you the best idea of where your money goes, and highlights how much goes on the odd coffee/magazine/sandwich.

Good Luck!
KarmaChi

Hi KarmaChi

Just coming back to this - how do you spend so little on mostly organic produce/meat? Where do you shop?

Thanks!

steampowered

Your SOA suggests you should be saving £270 a month. Even after you take into account spending £1200 a year on holidays, £1200 a year on haircuts, £960 a year on clothes and £5100 a year on entertainment.

I think you are seriously underestimating some of your expenses here. You don't seem to be able to manage your monthly expenses, monitoring your spending weekly would give you a clearer idea of where the money is going.

[Deleted User]

You are spending £1,200 pa on haircuts? :eek:

Who do you go to, Vidal Sassoon :huh:

Likewise, you are spending £5,100 pa on entertainment? :eek:

With no partner or children, who are you spending £300 pa on presents for?