Newie trying to sort out finances

ilovelondontown

So where do I start? I've been been lurking on the boards for a while now and from what I can tell my situation isn't as bad as some and is worse than others, but all the same it's giving me a constant headache.

Background of my financial stats: I have no savings, about £2800 on a credit card, a £4500 loan that was planned for and pay off £400 per month and will be paid off by October this year, a £750 overdraft and about £400 on a Next account card. Very recently I was also given an unexpectely high Gas bill £600 and I've had to ask to repay in installments as it's not money I just have to give back. Which made me feel great (!)

I make regular payments to all my debts when I get paid, and I've never defauted. My husband has a couple of credit cards with a little bit on and a loan of about £7000. So between us we have about £10k in debt, but it's being managed.

So what's the problem? I'm feeling a bit overwhelmed that every time I try and get to the top of my debt somethign else unexpected comes along. I try and look at it positively and think well by December I'll only have about £2000 on a credit card, assuming nothing else gets paid but I'm worried constantly that the rug will be pulled from underneath me (either I or my husband lose our job) I have a job that is quite "safe" but husband is newly self employed. I worry that I'll be forced in to more debt because I don't have any savings to fall back on.

I've started to judge myself for having no "financial control" I feel so ashamed that we both have good paying jobs, and have a "comfortable" lifestyle and yet we have no savings and considerable debt. I'd be mortified if my inlaws or my own parents knew how bad things are.

Other than the fact that having debt doesn't make anybody feel great, the other reason I want to feel more finanically in control is because in the near future I want to start a family, and I want to be in the best position I can be to do that.

I admit, as a couple we do have a tendancy to say "F- it" we can't afford a mortgage, we don't have any savings, so lets just go out and have a good time (usually at the pub) - which seems to be our only "extravagance" at the moment, but it's this "extravagance" that is stopping us from being where I want us to be financially.

Every pay day I pay all my dues, including more than the minimum payment on all my debt, and I think to myself, right this month I'm going to be really good, I won't go out too much, and I'll cut back on take aways etc, but by the second week I feel restricted by the self imposed controls I've put on myself. Almost in the same way someone on a diet does. For a week it's all going well but then something changes and it's back to stuffing your face, or in our case, going out for a drink and forgetting our woes.

I realise I've not been very articulate, but I guess I'm just trying to get this down and out before I control+ Del and back out of "saying this outloud".

If you got this far, thanks for listening!

jessie4109

Could you post your soa on here to see where could be cut back (and used for savings etc).
I can use my example.
I used to spend between £50 - £65 in Tesco on my weekly shop. I now shop in Aldi and very rarely spend over £40 per week, so in essence save £40+ per month just on this which goes into my emergency fund.

ilovelondontown

Hi jessie4109 - I'm not familiar with the abrv SOA?

Generally speaking I do a daily shop en route home from work - No more than £8/£10 per day. So about £70 p week. I must admit I was nieave before as I was shopping at Waitrose out of habit, and it IS cheaper to go to Tescos and the like. Something small I need to change.

jessie4109

statement of affairs / income expenditure

http://www.stoozing.com/calculator/soa.php I find that just to do it, even if you don't post it online, that it makes you think where possible savings could be made.

FireWyrm

When you complete an SOA it will be quite shocking to you. You need to ruthlessly honest and you need to pay attention to what it tells you. We've all done one (or more) whether it was posted here or not and it is an important step to becoming debt free - something like "my name is xxx and I'm in debt" etc.

To help you with this process, I suggest you get print outs of your accounts for the previous 3 months and then go through it highlighting categories such as 'food', 'drink', 'groceries', 'car' etc. When you've finished, I suspect you will find that your bi-weekly blow outs at the pub are your biggest problem and you'll find that knocking these on the head will improve your situation no end.

Dont be worried, this is your light bulb moment. It's the moment when you realise that you cant go on with this and you start to get a grip. We've all been there and we all struggle just as you are finding. This is largely why this corner of the board exists, to offer advice but also mutual support along the way.

Post you're SOA - we can help you and advise where necessary. We cant make it go away, but we can put some perspective on it and offer an action plan.

ilovelondontown

Thanks for the link. I've done the SOA and from the look of it, there isn't anything I can really do to cut back, I don't have any assets, I don't own a car, I don't have any child care expenses, and I rent - thus not a home owner.

My husband and I keep our finances a part, I take care of "my debt" and he his. The trouble is, I'm quite strict with my repayments and make vast over payments for things, but then he is quite lax and thinks of debt as "one of those things" he doesn't see having " a bit " on a credit card as a problem, so long as you're making payments to it, but that to me isn't a very mature outlook to have.

It does feel like we're just rubbing pennies together. On one hand, we don't have outgoing that cripple us, childcare/cars/a mortgage we can't pay but at the same time given that we've got a duel income and no children, I just can't work out why we aren't "better off"

I need to get my husband to take a closer look at his outgoing but mine as a break down are below:

Income £1908
Rent: £475
Credit card: £400 (current balance £2800)
Council tax: £80
Travel: £100
DFS Sofas: £39 (due to end June 2014)
Gas: £50
Gas debt repayment; £50
Repayment of laptop (Currys) £28 (I use the laptop daily)
Contact lenses: £13
Sisters internet: £12.50
Gym: £23 ( I go 4 times a week)
Sky: £53 (This includes all sky sport channels which husband claims is his only luxury and he certainly gets his money worth)
Lunch at work: £60
Home Food: £200 (I pay more for food as he pays more rent)
Disposable: £140 going out, £40 take aways.

Once I've made all these payments I have about £145 left... which goes on things that I haven't accounted for, birthdays/unexpected bill, etc. In the end I feel like I'm not getting anywhere and so I get depressed and think why bother, and end up lumping a night out that I can't afford back on the credit card and so the cycle starts again.

I appreciate I'm excusing some of these expenses- I'm "locked in" to the sofa and laptop repayments, and I pay for my sister's internet as she's doing her GCSE's and my mother can't afford the expense. I'd be happy to cut the Sky, (I might at least ring them and cut it down where I can- get rid of the second box- that'd be £10 at least.)

The other things I've done is I have a work phone and don't have a personal one so I don't have to worry about phone bills, phone insurance, my home internet is included in my rent.

gothrockchic1

Hi ya there is a lot you can cut back on like going out, work lunches and takeaways.

I know this is a lot to take in but you can cut back the food bill too by meal planning and having use up months when you have too much in the kitchen cupboards.

Is there anything you can sell have a look on the Up your income boards for lots of ideas.

Good Luck x

ilovelondontown

gothrockchic1 - Thanks for your input, the trouble is, and again I know this is excuses, but I think to myself if I cut back on the few things I get pleasure out of- seeing friends, my Friday night takeaway, then what do I have to look forward to after I've done my 9-5?!

Surely I'm not the only one who thinks/feels like this?

FireWyrm

ilovelondontown wrote: »

gothrockchic1 - Thanks for your input, the trouble is, and again I know this is excuses, but I think to myself if I cut back on the few things I get pleasure out of- seeing friends, my Friday night takeaway, then what do I have to look forward to after I've done my 9-5?!

Surely I'm not the only one who thinks/feels like this?

With respect, surely that's the attitude that got you in this mess in the first place?

You state that your credit outgoings are £400 a month - imagine what you could be doing with this if it belonged to you and not the credit card company? Quite apart from that, you are undoubtedly paying a fortune in interest that you simply need not do. This is a form of slavery - why would you want to remain in that situation if you could do something about it? Granted, you will pay a short term price (not going out for a while), but reap a long term reward of more disposable income to spend on yourself and if you're very lucky, a complete change of attitude leading to long term financial stability in the future.

Today in the paper there was a financial report stating that a significant number of elderly are now trying to repay debts of circa £20K while living on a fixed income...personally, I cant think of a worse position to be in at the end - fixed income, large outgoings and no savings let alone a pension because I've been paying debt all my life. How much better would you feel by making some minor changes and taking some short term pain now?

THAT is a lightbulb moment...I'm not convinced you've experienced it yet. Take another look at your finances as you've posted and tell me that you're happy paying that for the rest of your life and that you have no other ambition but to remain a slave to the system...no home ownership? No pension? No savings? No freedom? I think not - and deep down, probably, so do you or you wouldnt be here in the first place.

ilovelondontown

Firewyrm, This is what I need brutal honesty. I need to see it from someone else's perspective. Something isn't working here and I need to understand why! And you are right, I don't want to be a slave to the system, I want to be free from the stress, that's exactly why I'm here, I want to educate myself into a healthier way of thinking about money and more than that I need to try and educate my husband to do the same!

Thank you for this, feel free to flame me some more! :beer:

bargainbetty

ilovelondontown wrote: »

Hi jessie4109 - I'm not familiar with the abrv SOA?

Generally speaking I do a daily shop en route home from work - No more than £8/£10 per day. So about £70 p week. I must admit I was nieave before as I was shopping at Waitrose out of habit, and it IS cheaper to go to Tescos and the like. Something small I need to change.

You have quoted your monthly food spend as £200 per month, yet stated above that you spend approx £70 per week. That's a miscalculation of £80 per month. Every month. Plus takeaways and lunches at work.... are you sure about those figures?

Rather than doing a daily shop, can you not do some kind of meal plan and shop weekly? Do a full list of everything you have in your cupboards and plans your meals. Buy a whole chicken and roast it one day, slice the rest of the bird and save the carcass for soup/stock. Probably not much off two large chicken breasts in price and three times as many meals.

Buy mince and do up a pan of chilli, a pan of ragu and a pan of gravy based mince. You've got cottage/shepherds pies, spag bol, lasagnes, random pasta dishes and chilli there, all ready to be boxed up and put in the freezer. If you got a couple of portions out every morning, they'll be defrosted by the time you get home. Pasta/rice takes no time.

You can also take leftovers to work, which will cut back too.

Small things, but you have to really want to do this. You will eat better food, feel healthier and can enjoy the savings. Have a nice bottle of wine with a home-cooked meal instead of going out.

Most of all, stop thinking of cooking as chore at the end of the 9-5. I enjoy cooking as it gives me a chance to wind down and potter about the kitchen. It also gives me a chance to wield a sharp knife while imagining whoever annoyed me that day. Sometimes, I do just bung a bowl of chilli in the microwave. But it's my chilli. Cost me a fiver for about 8 portions, and tastes better than any ready meal!

Good luck