Newie trying to sort out finances

FireWyrm

Really? Ready for this?...ok....here goes.

ilovelondontown wrote: »

...and I rent - thus not a home owner.

Are you planning on renting for the rest of your life? Do you believe you will pass one of those credit checks when you have a fixed state pension? What happens when the population of this country doubles and the competition for those properties is more than an order of magnitude worse than today? What are your plans?

ilovelondontown wrote: »

My husband and I keep our finances a part, I take care of "my debt" and he his.

You are in a partnership are you not? My experience is that this almost never works over the long term. There are some on this board who manage their finances like this - but anecdotal evidence is that it is rare. Most people pool their assets when they for a unit because it is easier tackling the debt together than as separates.

ilovelondontown wrote: »

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.

You just answered the questions above I think.

ilovelondontown wrote: »

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"

You arnt better off because you are wasting it monthly and you're not both pulling in the same direction with the same intensity. Presumably, you'll want children at some point. There is never a good time to have them (take it from me - I have three) but there are certainly 'less worse' times. Being out of debt would be one of those. It allowes you greater flexibility with regard to what you buy and other unavoidable expenses. I'm constrained, I will be returning to work a mere 2 months after the birth of my last, but I do this because I must. I wish I could take 6 months off - perhaps being debt free means you wouldnt have to make that decision at all and would have the time and leeway to enjoy your new arrival for longer.

Finally, whilst babies themselves arn't terribly expensive, children are. They grown seemingly overnight and at least once a week you discover they simply have nothing decent to wear again. They scuff their shoes, they need more food than you think and they keep putting holes in their school trousers. None of this comes cheap. Most people think the biggest expense is the new baby - but ebay/freegle and family tend to soften the blow. It's usually post 1 year old that you realise you're on your own and by god, it suddenly turns expensive.

ilovelondontown wrote: »

Income £1908
Rent: £475
Credit card: £400 (current balance £2800) You need to get rid of this - now.
Council tax: £80
Travel: £100
DFS Sofas: £39 (due to end June 2014)
Gas: £50 Can you spend less?
Gas debt repayment; £50 Hmm....you need to cut your consumption
Repayment of laptop (Currys) £28 (I use the laptop daily) Wow! What's the interest on that puppy.
Contact lenses: £13
Sisters internet: £12.50 What's wrong with your sister paying this?
Gym: £23 ( I go 4 times a week) Jog around the block a couple of times a week - its free.
Sky: £53 (This includes all sky sport channels which husband claims is his only luxury and he certainly gets his money worth) And...somehow you're paying for his luxury? Why?
Lunch at work: £60 I feed a family of 5 on £180. Your lunch budget is one THIRD of my total food spend for the month.
Home Food: £200 (I pay more for food as he pays more rent) And yet you also spend £200 for TWO PEOPLE on food
Disposable: £140 going out, £40 take aways. And again, you need takeaways too? Honestly?

Some thoughts above

ilovelondontown wrote: »

Once I've made all these payments I have about £145 left... which goes on things that I haven't accounted for,

that's the art of budgeting - accounting for long term expenses. Do you pay your insurance yearly, or installments? If installments, do you know you will almost certainly be paying a premium of 39% on top for the credit?

ilovelondontown wrote: »

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.

You bother because this debt will only get worse. I can almost see your future mapped out. You will fall pregnant sooner or later, the child will be a burden but you'll 'manage' and 'scrape by' like the rest of us. Your debt will slowly grow over the years and in about 10 years, you'll be back with a debt of circa £40K wondering where the heck to start. Nip it in the bud now.

ilovelondontown wrote: »

I appreciate I'm excusing some of these expenses-

Yup

ilovelondontown wrote: »

.....and I pay for my sister's internet as she's doing her GCSE's and my mother can't afford the expense.

What does this teach your sister?

She cant do a saturday job in a local shop for her internet money? She cant babysit? I was running a house, cooking, cleaning and holding down a job at 16 and a half (direct out of school) because there was no other option. How much is this internet anyway?

ilovelondontown wrote: »

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.)

A start.

ilovelondontown wrote: »

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.

OK...good. Now, what else can you cut and what is your plan for dealing with this £2500 you owe?

his_missus

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?

I can empathise with this totally and certainly me n Hubby had a "live for the moment" attitude for a few years however, this won't get you out of debt. Instead of going out with friends, make a pot of chilli and buy a box of beer/wine from the supermarket and invite them round. It will cost you far less than going out and when they return the favour, it's a free night out for you.

I also agree you could probably cut back on the shopping bill if you shopped less often especially if like me you're bit of an impulse shopper.

Also have you looked into switching your internet to sky? You could try threatenign to leave sky to see if they offer you any deals. May only save a few pounds but it all adds up.

And now we've worked hard and saved hard and budgetted and have no more debt we can start enjoying life without any worries. Try and think long term and you'll get there

Fire Wyrm talks a lot sense!

foxgloves

Hi,
Just wanted to say that you both sound like how my husband & I were, before we decided to get rid of our debts once & for all. I had my LBM a month or so beforehim, & that caused a bit of friction to begin with, but when he saw my debts starting to come down, he decided he wanted in on the debt-busting action & we tackled it together. At that point, we also joined our finances together....we were married & had a mortgage by then, so it seemed a bit daft to make everything mroe complicated by operating two sets of accounts. Once we'd done this, it was so much easier to budget. We used to have a lot of takeaways.....the take-away LBM was 3 uses of a well-known pizza delivery chain in one month, & each time, we spent around £26......for pizza for 2 people?? That's just ridiculous, & that was with probably a Chinese & a curry the same month too! Not bothering to make packed lunches for work was also costing us. We committed to packing up our lunches the night before & have done so ever since......the saving on not buying work lunches alone has been around £2000 a year.....I know, an unbelievable waste of money! It's all about choices in the end......you can carry on buying this sort of very average stuff, or you can choose to put that money into getting rid of your debts earlier. It does just come down to a choice, & you've been choosing to have the debt. Unless you change your behaviour, you won't get different results. I don't want you to think I'm being judgemental, we've been there. That's why I can tell you absolutely honestly, that there's no take-away or shop bought work lunch or other bag of stuff brought to 'cheer myself up' in town, that could EVER make me feel as good as becoming debt-free finally did in May 2011. Perhaps the first thing is to work out with your partner how you're both going to pull the team in the same direction on this. Sometimes we have debts for so long (like we did) that we get comfortable with them, but there really is no situation in life that is improved by having debt. At some point in your life, they will hinder something you want or need to do, so make this the start. If you keep making excuses (as we did), you really will only delay the inevitable. Best of luck with it all.

ilovelondontown

I have to say I really do thank you guys from the bottom of my heart for taking the time to post. The brutality of it, I'm not going to lie, it stings, but I need to feel that to help me sit up and take note of what's going on here. My debt is "small" and I want to do something about it before it becomes bigger, scary debt like Fire wyrm said.

In fact Firewyrm was on the money - excuse the pun- on a lot of things broken down. We got married in November and the saving for the wedding was a killer, every spare penny we had went towards it and truth be told I resented it in the end. I love being married and adore my husband but I do regret having the lavish wedding when we could have put the money else where..... and I think that's why I've become a bit lax with sorting out this mess that is starting to unravel. I want to spend money without limitation but of course having that money spread on to credit cards, isn't my money and is only giving me problems for later.

My husband isn't quite there with this sudden ugency I have to get finances sorted, he's still in the "we're fine as we are" mode, and I know him so well that hounding him when he's not ready to talk yet won't get him on side, so he's promised we'll sit down and talk about things in a few days when he's in the right frame of mind, but that hasn't stopped me already finding ways to sort this out!

So in less than 12 hours since writing this post I have:

1) Asked my work for a 0% interest loan for my commute travel annual season ticket- this will save me over £200 a year on travel

2) I called Sky and threatened to cancel my sub, and they've reduced my package for 6 months from £53 a month to £37, and I get to keep multi room and husbands precious Sky sport. He also told me about SkyGo and On demand that comes with the package for free and I had no idea I could watch Sky on my laptop!!? When the 6 months is up he said call back and see if there is anything they can do for me again. If they can't then at the very least I'll cancel multiroom and if my hubby wants Sky sport he can start paying the £20 pm for it :rotfl:

3) I cooked dinner tonight for £4.20. We had spag bol and to make it cheaper I went without the cheese and garlic bread, husband and I are both full and there is still enough for one of us to take to work tomorrow

4) I found out that the laptop I currently pay monthly for is only £20, the additional £8 is insurance...I'm tempted to cancel the insurance section, but is that tempting fate?

5) I'm going through all my clothes, can I sell? Prob not, they are mostly cheapy stuff from Dorothy Perkins, but if I can't sell, I'm going to revive them into my wardrobe, I've already cut up my Next account card.

6) TO that end, I've also cut up my credit card. Not having it to hand will make it impossible for that drink-after-work (which is always 5) to happen.

7) I'm seriously concemplating moving. Our rent is to my brother in law, and it's certainly not mate rates. We've gone back and forth on this before, because I want to have children in the near future, the place we rent is a perfect family home, to rent somewhere cheaper - say £1000, only £250 less a month you get a box.... and then we'd need to find the deposit and all the hassle that comes with moving. It's a drastic option, but one to consider all the same.

8) I'm going to do the food taste challenge, I'm going to buy no branded / lux goods on everything from ketchup to pizza and see if anyone notices. I'm also going to switch to shop branded washing powers etc. Finally with food, I'm going to stop going to waitrose and make a concious effort to always go to Tesco and do food shops online to avoid over spending per day. I've just signed up for a tescoclub card too. My waitrose one doesn't give me anything for my money. :mad:

I'm under no illusion that this isn't about paying off the £2700 sitting on my credit card, this is about changing how I look at money and actually having a more positive outlook on life and I think ironically convincing my husband to join me fully on this quest is going to be the toughest part- so if you have any tips on how to get him on board, please let me know!

Thanks again guys this place is amazing!

jessie4109

You say that the £8 is for insurance for the laptop and unsure if you should cancel as to be tempting fate. Have you looked at how much contents insurance is which would cover your whole house including the laptop. It may seem like an illogical idea but how would you be able to afford a replacement if eg a washing machine broke down or something else not covered by your rent, without the need for further credit?

Or you could put that £8 saved to one side in an emergency fund.

FireWyrm

There you go...now THATS a lightbulb moment.

Now, just keep going.

I would also go further in your quest - try Aldi for food (or Lidl, same thing really). Buy bulk, cook from scratch, batch cook etc. I guarantee you can halve your food spend at least.

Cancel that silly insurance. It's practically worthless in real terms anyway. In reality, you can buy a new laptop for around £300. If it worries you so much, put £400 into a savings account and dont touch it.

Another option you can take to help you budget is to separate your running expenses from your bills. Open a new account with a different bank and set up a standing order from your main account for a sensible sum on the first of the month - now, never touch the bills account again. I recommend you go with a bank that offers online banking and a phone app. Even the Co-Op has a basic account which offers this. No overdraft, no credit card, just a piggy bank and a debit card. It's amazing how much this concentrates the mind. All you have to remember is which card to use for 'food & fuel'. Honestly, I did this and it's the very best thing I ever did. If and when you get the hang of this and you start to have money left at the end of the month, I suggest you bunt it into a savings account somewhere and 'zero' the account on the last day of the month ready for the new pot of money.

As for your husband, you know him best. One suggestion I might make is that once he sees results, he will most likely want to join in. Guilt tripping works too - why are you paying for his sports channel when you have to scrimp on the food to compensate...etc....

Hey, there are plenty of options and now you've seen the light, the possibilities are endless. There's a strange sort of satisfaction to money saving and debt busting which you will find for yourself. I get satisfaction when I've planned a month properly and we're through to payday with money to spend. I get satisfaction hunting down a bargain and I never ever pay full price for anything if I can get it cheaper, make it or just plan bargain down the trader. Dont be shy, most market traders will dicker with you if you play the game. It's an art and one you have to learn by doing.

My final piece of advice is to invest in some decent basic cook books. Delia and Jamie are good options. Become familiar with names like Ching He Heung and Ina Garten etc. Money saving and debt busting are not about deprivation - it is about living the same way you always did but for less. Some things like foreign holidays are now beyond your reach, but holidays in a caravan probably are not. It's about changing expectations. The reason you are in this situation is that you were always living beyond your means - keep that in mind going forward and you wont go far wrong.

ilovelondontown

Feeling overwhelmed after yesterday's light bulb moment, and am trying to not let it detract from the effort I'm already making....

I was up rather late last night high on my wave of new found enthusiasm for getting my finances straightened out (I'm "paying for it" today though shattered!)

I had a look into selling some DVD's we don't use, did a batch of 50 and it comes to about £30 in value, not much but then I saw on this website that I can sell clothes!? Well I have 3 bags full of husbands clothes that he doesn't want any more, I though they were worthless but per TM Lewin shirt (he must have 50 +) I'm getting £1.20 / £1.50 a shirt! and then there are his jeans.... I even considered selling my wedding dress.... although I don't think I'm there yet.

This week I'm cancelling the insurance on my laptop, that's another £8 a month back, and then I'm going to have to get crafty about new ways to save/make money. I guess the next big thing to tackle will be the food budget and the social budget....

harrys_dad

What an inspiring thread this is, and a fabulous example of how someone can go from an anxious, worried person in debt to someone who is determined to sort their problems, see it as a challenge, and enjoy it whilst they do it. That change took some hard self analysis, but was inspired by the "tough love" that people like FireWyrm provide.

Well done ilovelondontown on starting this journey, and hopefully you can get your husband on board too. You haven't been married long, you need to tell him how unhappy your previous way with money has been making you, and I am sure he will do what is necessary to join you in this partnership and make you happy. For a start, let him read this thread from start to finish and see what a positive effect it has had on you.

Firwyrm, you are an absolute star of this board, continue your inspirational posts and your tough love to help people have their LBM and successfully move to being debt free.

matttye

What's your credit report like? Is there any chance of getting a 0% credit card and moving your current credit card balance onto that so you don't have to pay any interest?

Of course once you've moved it you could just cut up that card so you're not tempted.

Well done on what you've done so far!

Be wary of Sky because Sky Go isn't a free service...they might have given you a free period but its not completely free. I've got a one month free trial then it starts costing.

jessie4109

it may be an idea to make a list of what steps you need to take next. They may not be all completed in one go but you can cross them off as you go for more motivation. With the food budget, would it be useful for you to make up a "typical" shopping list from what you go through weekly and see how it compares price wise using https://www.mysupermarket.co.uk