thriving on an IVA budget

cheesedoffwithdebt

hi people

I wondered if anyone would be interested in joining a thread/discussion about how we are managing in our IVA (and thus restricted) budgets?

I've made a number of changes over the last 2 years and am now half way through my IVA.

There are still many months to go, and I spent some time last year feeling really down about it- just wanting it all to be over!!

However I've set myself some goals for 2013 and reassured myself that this time next year the DFD will be well and truly on the horizon-so just as an example I've written down below some of the things I've learned, about myself included, and what my goals are for this year- anyone who'd like to join me I thought it might be a good way of swapping stories and ideas to get through!!


what I have learned about myself..............

I find it hard to wait for things

I had no idea how to do a real budget before I was in my IVA-I thought I did but emergency and large expenses always bit me on the bum, now I plan for them

[COLOR="rgb(255, 0, 255)"]what I am learning..............[/COLOR]

How to plan my finances so I can afford the things I need, and save for the things I want (slowly right now the IVA puts the brakes on that)

about living within my current budget- for instance I plan my food menus religiously now, home cook most things, and don't spend more than I have allowed :A

[COLOR="rgb(255, 0, 255)"]my 2013 goals[/COLOR]


continue to live in my budget

not set my sights on spending more than I can really afford

save 20p and 50p coins towards Christmas 2013

continue my new hobby ( imposed by budget) of making gifts for Birthdays and Christmas

FiatFan_2

Could be a good discussion We never really budgeted in the past and always got caught short on the big items. We've learnt a lot about budgeting in a short time, whilst we're not great at sticking to it, we've always had a tiny bit spare at the end of a month.

Not sure if it's just with New Year an all or that we're now 4 payments in and can see the benefits of the action we took. I'm certainly feeling far more comfortable with talking about it.

For 2013, we're hoping to be able to live better within our budget and have planed our savings for Christmas 2013 including saving nectar points, 1,2,5,10p's in a jar and any cashback through topcashback.

Planning a good bit ahead here, but I'd like to own another Fiat so going to try and put a little away from any excess wage I have so maybe can in 2014.

UpToMyNeckInIt

I think this thread is a good idea.

Personally speaking, being self-employed and in an IVA makes life interesting (complicated!) to say the least.

Due to my IVA being based on my last tax return (personal and CT600), where my accountant has made out my income to be a little lower than it actually is (quite legally I hasten to add, by offsetting my turnover against job expenses/allowances etc). This not only minimises tax liabilities, but my official 'income' (net profit) on which the IVA payment is based, is slightly lower than my actual net income.

I was totally up-front about this to my IP, but I was assured that in self-employed cases like mine, it is normal just to take the official tax return figures (particularly where they have been completed by an accountant).

this coupled with the excellent advice I received regarding what to allow for expenditure, means that my IVA payment id very affordable, and still allows me to build up a small savings/contingency fund.

My goal is to save £20 per week (£4 per working day). So I've started by stopping buying a daily newspaper (get the Metro for free instead), and take my own sandwiches for lunch. Weather permitting, I have started cycling to the tube station, rather than driving/paying for parking.

In the 6 Months I've been doing the above, I was able to save up for a new bike, so I'm well-chuffed with that.

Amazing how it all adds up, and these savings supplement my other allowances.

I know some people really struggle with their budget, and I consider myself to be relatively fortunate.

I would urge anyone considering an IVA therefore to budget for everything very carefully, and not to put down restricted figures on their proposal (sometimes done in the possibly mistaken belief that the IVA is more likely to be accepted if they do). All it results in is those people struggling in the IVA from day one.

Purely my opinion though.

cheesedoffwithdebt

I agree uptomyneckinit- so important the IVA starts with a realistic budget. I only have £250 in savings and its taken me 2.5 years to get that far, however I am cutting out other expenses so I can save more, but anyone forced to have a very low budget is being set up to fail.

Your accountant isn't doing anything dodgy btw- those expenses are allowable for tax purposes and your free income is after what you pay out, relax!

The thing is when you start and IVA, and I remember the hassle from creditors only too well, your energies are focussed on getting things onto an even keel. Its only now, I have started to realise perhaps what were always my bad money habits that need working on, so I have set a goal of wanting to thrive.

But my shopping is mostly the charity shops these days or the sales, (for clothes and household items) but then I realised- no reason I should not continue that after the IVA and continue to live on the budget I am on now- will have to see!

patchy987

We have just completed our iva but found it almost impossible to live on our allowed money, all our iva allowed us to have after mortgage and bills was £35 a week, that was to cover housekeeping and clothing and having a life, it was so difficult

cheesedoffwithdebt

PS welcome fiatfan as well- it is hard to talk about it initially because of the stress of being in this situation !

cheesedoffwithdebt

patchy987 wrote: »

We have just completed our iva but found it almost impossible to live on our allowed money, all our iva allowed us to have after mortgage and bills was £35 a week, that was to cover housekeeping and clothing and having a life, it was so difficult

don't know how you did it Patchy- I am allowed £10 a week for clothing, £30 for food, and the same for petrol as I have long distances to travel for work. Bet you are glad its over:T

patchy987

cheesedoffwithdebt wrote: »

don't know how you did it Patchy- I am allowed £10 a week for clothing, £30 for food, and the same for petrol as I have long distances to travel for work. Bet you are glad its over:T

To be fair it has been the hardest 6 years of our lives, for 2 of us to live on such a small amount caused me to have a breakdown and I'm still recovering, we have had a leaking roof for 3 years which has left 2 of our bedrooms unusable but the iva company didn't care.

The day we paid our last payment at the end of November I cried the whole day as the relief was amazing, words cannot describe how it feels to be free

cheesedoffwithdebt

well it's too late now but £35 a week is ridiculous- most people I know reckon you need about £35 for one person let alone 2- and it is stressful constantly having to watch what you spend.
I did manage to reduce what I spend on food by preparing menus and shopping at LIDL or ALDI- thats made a huge difference but I can't wait for a day when I can go into a shop and it really won't matter if I over spend by a fiver-5 years in an IVA is still shorter than some people have to go on a DMP but it's still a long time- have you managed to get the roof done now?

FiatFan_2

patchy987 wrote: »

We have just completed our iva but found it almost impossible to live on our allowed money, all our iva allowed us to have after mortgage and bills was £35 a week, that was to cover housekeeping and clothing and having a life, it was so difficult

Congratulations patchy, gi's that sounds like a tough 6 yrs we certainly couldn't cope on that. Can understand about the house repairs, I think if we'd stayed in our mortgaged property we'd ave cracked up too as it was needed a fair amount of work that couldn't be budgeted for.

cheesedoffwithdebt wrote: »

PS welcome fiatfan as well- it is hard to talk about it initially because of the stress of being in this situation !

Thanks :beer: It is a stressful time to start with, facing upto mistakes and owning up to some small 'secret debts', there is also a slight amount of guilt and embarrassment too albeit not many know we've become iva.

patchy987

cheesedoffwithdebt wrote: »

well it's too late now but £35 a week is ridiculous- most people I know reckon you need about £35 for one person let alone 2- and it is stressful constantly having to watch what you spend.
I did manage to reduce what I spend on food by preparing menus and shopping at LIDL or ALDI- thats made a huge difference but I can't wait for a day when I can go into a shop and it really won't matter if I over spend by a fiver-5 years in an IVA is still shorter than some people have to go on a DMP but it's still a long time- have you managed to get the roof done now?

We agree it was ridiculous but no matter how much we pleaded for more allowance they wouldn't increase it at all over the whole 6 years! This has made me think I might write my story down as it will shock people to see what we went through but also show that no matter how hard things seem the light does come eventually

And we are no where near able to do the roof yet, only had one pay packet since iva ended and its an expensive job but hopefully sometime before winter 2013