Discipline

Hi,

I've spent the last year sorting out my spending and wish I'd seen this site at the start!

I don't earn a great deal of money (16,000 pa), but was frequently spending beyond my means and had debt in a loan, credit card, o/draft and family loans. I have managed to pay off my credit card and cut it up, my o/draft is now down to £300 and I owe just £100 to my sister. My loan is at £4500 and I'd like to try and cut this down sooner than the 3 years left.

I suppose I'm on here, because I'm flagging. I'm sick of never having any money, fed up because I still can't really get to the root of why I overspend. Even now some months I undo all the good work on the previous couple of months and my overdraft should have been paid off by now.

I know that compared to some I'm lucky it isn't worse, but I'd like to feel free of having to worry about money all the time.

A breakdown is below - any suggestions gratefully received:

Earn: £959 per month

£300 - Joint Account (mortgage,bills etc relating to the house come out of here).
£155 - Cahoot Loan 7.9% £4500 over 3 years
£40 - ISA
£30 - Mobile (tied into contract)
£28 - Gym
£15 - Mobile - Old contract that was crippling me, a few more months to go

This leaves me £391, to get food,petrol, any unexpected expenses (normally to do with the car), socialising, clothes etc etc.

What I really need is:
Motivating, my friends earn more and I'm sick of never being able to afford anything
Ideas on getting the loan gone quicker

When I first started being thrifty was a novelty and I did well, but 12 months on and I'm losing the discipline I had. Sorry to moan I just don't want to slip back to serious debt again x
Quit smoking 18/08/07
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Comments

  • Magentasue
    Magentasue Posts: 4,229 Forumite
    Just looking quickly, I wonder if your problem is that you think you have £390 a month to spend when you don't. For example, out of your £959 net pay, do you save anything towards Car Tax, MOT, servicing, tyres and insurance? Because they're not really unexpected expenses! Work out how much you spend on your car a year, add £50 and divide by 12 - this amount needs to be put somewhere every months. Anything else essential you're not budgeting for?

    As for not spending, well, I feel the same. But the more you pay towards clearing your debt, the sooner you'll have more spending cash available EVERY month. Don't know of any easy answers!
  • Thanks Magentasue, I've never looked at it like that before. It may sound foolish, but as I've got so used to having nothing left at the end of the month or worse, I've got used to spending everything. But you're right, just because that amount of money hasn't got to come out (eg in a direct debit) doesn't mean it has to spent. I suppose I need to stop spending for the sake of it, so that when I NEED to spend the money is there....
    Quit smoking 18/08/07
  • Magentasue
    Magentasue Posts: 4,229 Forumite
    If you look at the blue strip near the top of this page, you'll see a link to the budget planner. It's the only way! I use Microsoft Money and it's the same thing, you fill in your income, your outgoings and then have to trim so that they are equal. I'm hoping one day that my income will exceed outgoings ...
  • nearlyrich
    nearlyrich Posts: 13,698 Forumite
    First Post First Anniversary Combo Breaker Hung up my suit!
    Magentasue wrote:
    If you look at the blue strip near the top of this page, you'll see a link to the budget planner. It's the only way! I use Microsoft Money and it's the same thing, you fill in your income, your outgoings and then have to trim so that they are equal. I'm hoping one day that my income will exceed outgoings ...

    I can only echo this advice, do a budget and sweep the extra money you need to save into a high interest savings accout, set one up for the car, one to save for Christmas & Birthdays etc , one for holidays whatever you need. I use ING as it's online and I find internet banking convenient. If you leave your car fund in the current account it's too easy to spend it on a night out or the shoes you have to have now.

    I also have all my essential outgoings on DD or SO as soon after payday as possible and I track all my money in a spreadsheet in Excel, I have used MS Money but a spreadsheet is better for me, each to their own.

    There is lots of good advice on the board, and on other parts of the site about cutting expenses, have you thought of keeping a spending diary to see where it all goes, cups of designer coffeee and sandwiches for lunch soon add up,it will help you to get in control of your money. Look at the Old Style Board for ideas on how to eat well for less and you will find moneysaving ideas for utilities etc....

    I see you are contributing to an ISA, can you suspend it and pay off the overdraft quicker? Look at Snowballing with the £40 extra, paying off the most expensive debt first. On the loan check if you can make overpayments?

    Good luck keep going and keep posting ;)
    Free impartial debt advice from: National Debtline or Stepchange[/CENTER]
  • homersimpson_3
    homersimpson_3 Posts: 1,249 Forumite
    Like you I get fed up in not having any money and my income is considerably less than yours. Particularly when I see friends/colleagues/family have a great time, spending lots on clothes, nice food, going on holidays and away for the day. Sorry if this is harsh but you're not unique in this and yes it will be hard until you go through the light at the end of the tunnel- i.e. get of out of debt. It's part of the learning process!
    Keeping a record on debts coming down each month is a good motivator. Set yourself a target and play the game with yourself- come up with a creative way of getting the debt down to £x (be reasonable) by (date). It works.
    Suggestions of ways you could save money now:
    rather than paying £40 into isa use it to pay off debts.
    give up gym and go for a run- another £28 payed off debt each month!
    get rid of the mobile phone- do you really need it??????- so far £83 (40+28+15). within 5 months (only 20 weeks) overdraft and money to sister paid off. (5x83= 415).
    £391 should be plenty on to live on after expenses. It's nearly a £100 per week (say average 4 weeks in a month). The usual things can save you a fortune- take sandwiches, buy cheaper brands, vouchers etc. Make a few quid out of free bets/casinos. send away for freebies. Tell your friends what you're trying to do- in debt need to save etc. If they're good friends they should stick by you and support you! If you want to see them suggest night in in front of telly- everyone pays into a kitty to buy snacks/beer etc around your house whilst they watch the footie (or whatever). My friends and I used to pay £15 for a meal at a really nice resturaunt- we then found a pub offer the same meal 2 for a fiver (food just as good- no joke!)so we go there instead now. The place is not as nice but it's ok and I am now saving £12.50 each time I go out!. We still have a great laugh.
    Homer.
  • Malestrom
    Malestrom Posts: 983 Forumite
    No point paying into an ISA at 5% when your loan is at 7.9%! Also, the gym membership is a bit of a luxury if you really want to get rid of your debts.
    Pay both of those into your loan instead and it will be paid off earlier.

    As others have said, do a proper budget and look at cutting back on some areas so as to pay more into your debts.
    He huihuinga taangata he pukenga whakaaro – A meeting of people; a wellspring of ideas (Maori proverb)
  • Hi All,

    You're absolutely spot on with what you're saying. I got out my most recent bank statement earlier and I notice that I am always spending money in the Co-Op or garage and it certainly isn't on essentials. Ironically, the odd chocolate bar, the ciggies and the magazines are what are preventing me saving money and probably a night out a week! In fact I added up a whopping £296.01 in non essential spends in everywhere from the garage to amazon. I felt I was being good only spending a little at a time, but boy does it add up!
    Other breakthrough today was talking honestly with my best friend. I was stunned to realise we earn exactly the same and felt the same about trying to save money. We agreed to stick together and insist to our other mates that we tone down the money we spend on nights out, meals etc. and agreed we'd only shop together if we saved some money to go and keep eachother in check - no more "go on you deserve it" etc - it is a huge weight off and I'd recommend talking to friends as it is suprising how similar you may feel and not know it.
    The gym membership will go, especially as I had a good clearout today and found exercise equipment bought ages ago and forgotten about. Me and another friend are doing a car boot next week to flog some of the junk we hoard - I'll let you know what we make.
    Altogether a positive day and feel slightly ashamed looking at other posts, how much I was bellyaching. I have a roof over my head and food in the cupboard and I need to get my priorities straight.
    I'm starting a spend diary tomorrow and from now on it is cash only until I'm up straight again.
    Thanks to you all, you've made a massive difference to me today, I hope to find some wisdom to repay you! x

    PS I was given some patches by a friend, so hopefully the ciggies will soon be gone - it frightens me how much I waste on them...
    Quit smoking 18/08/07
  • Magentasue
    Magentasue Posts: 4,229 Forumite
    Well, you'll need a new user name then! Good luck - it gets easier, then harder, then easier again. Keep hold of that friend and go for it!
  • nearlyrich
    nearlyrich Posts: 13,698 Forumite
    First Post First Anniversary Combo Breaker Hung up my suit!
    Good luck we are all on your side:grouphug:
    Free impartial debt advice from: National Debtline or Stepchange[/CENTER]
  • Thanks for the encouragement, I'll keep you updated. I've been budgeting my brain out all evening and I think I'm getting somewhere. Slightly scary finding is that if all the money I spend on cigarettes went towards the loan, I'd knock over a year off it!!! I'm going to make a concerted effort to get rid of my bad habits. Checked on the loan and I can't overpay - I can pay off early without charge, but need to settle whatever is outstanding. Going to use my savings account to meet it in the middle, I figure that way I can keep a record of how many months I'm knocking off of it and that will drive me on. Also getting some decent savings for the first time in my 25 years will hopefully mean I find budgeting and saving will become second nature and I won't end up in this position again. So this is where I'm up to:

    £300 - Joint account
    £15 - Old contract (will buy out of if poss)
    £30 - Current phone (200 mins any netwok any time and 500 txts per month, I use my phone alot and this is a good deal as my old contract hammered me heavily)
    £155 - Loan, will see about getting rid of payment protection, this seems to add on a fair bit.
    £40 - ISA - I will keep this in the short term as I will pay a penalty to access it early.
    Total - £540 which leaves £419
    I think I can realistically live on £50 per week if I give up the ciggies and other random purchases that waste money and I don't even need.
    This will leave me £219 extra to throw at the debts.
    Month 1 will see me pay off my sister and a third of my overdraft. Car boot money will also go straight in to further reduce the o/draft.
    Month 2 will hopefully eradicate the rest of the overdraft.
    Month 3 onwards will see all extra into savings and begin to knock the months off of the loan.
    What do you think? FYI my job pays every 4th friday, so I never go longer than 28 days waiting for payday.
    Any observations or tips welcome - I've learnt so much already!
    Quit smoking 18/08/07
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