Mighty Titan Overdraft will crumble!

hohum

Hello

I have been browsing and hanging out on this forum a lot of late.

I wondered if I could use some of the browsing time to do something that would actually change my situation! So hence am starting a diary.

About me: live in god's own county (Yorkshire, obvs). 33. Live with boyfriend. Do arty things for a living. Am both good and bad with money eg really good at not shopping, not so great at not just going '!!!! it' and having a takeaway. Have dug out of debts and am pretty good at living on a shoestring (see 'things I do for a living ).

Why am I starting this diary?

- I have an overdraft of £1940 that I live in, apart from a £500 tax rebate that's currently sat there reducing the amount of interest I pay. I have not really been thinking about reducing this, until a) the bank will start to charge me £6 ON TOP of the interest I pay (which is 19.89% and b) I figured out with the amount I can afford to rpay it will take me 3 years :mad:. The overdraft comes from not earning enough money, essentially, not really looking to increase income and not having a budget. It's a hangover from studying that I have not shifted.

- It's becoming apparent that if I do want to have kids I'd better get things sorted sharpish. I actually have a decent standard of living, but I do worry about money. Recently I started a business and we had no capital and took no loans...so no money coming in either. Things have improved slightly now but I grew up with young and skint parents, and I would really rather not have that experience for my own children and family.

My boyfriend and I are still a bit separate on our finances. We have known each other for 16 years, been seeing each other for almost 5 years and lived together for four out of those five. I handle household bills. He gets stressed out by talking about bills or talking to utility companies.

In addition to the overdraft I owe £180 in self employed NI class 2 contributions (direct debit now set up so I don't get behind) and approx £16k on an income linked student loan. I'm not too bothered about the loan. The other week I paid my first PAYE contribution towards it - a whole £2.

The plan:

I have £500 from a tax refund sat in my account that I have earmarked towards total overdraft destruction. or at least, total overdraft reduction of at least £500. I haven't already reduced it because I'm wary that the bank will rescore me and just withdraw the entire facility.

I will be guaranteed £741 after tax each month until October which is enough to live on if I'm careful. I'll need to do a budget just to double check this is indeed the case.

Any self employed income I get above the £741 I can use towards overdraft reduction...however..

I also have to cover a short holiday (staying at family place, self catering for 5 days) AND work trip to Edinburgh (seeing shows and train fare, should be able to source free accommodation) in August.

I have the grand total of £87 put aside for my holiday so far.... This will cover the accommodation (£50) and food/booze contribution I would say. I have nothing towards Edinburgh (nothing in business can put towards it so will have to come out of my self employment). Damn. I was really pleased with my holiday fund saving until I wrote that down.

I feel a spreadsheet coming on.

hohum

Obviously starting this thread was some kind of temptation, as my laptop gave up the ghost yesterday. An entire day wasted trying madly to fix it, then trying to figure out best options for replacement.

Pretty much wiped out my tax refund by spending £389 on a new laptop. It's essential though, I can't work without it. Even more gutting is that my previous laptop was a mac and the new one is a pc build, so that's going to be a whole load of fun with software replacement, moving over mail accounts, multiple shared calendars, learning a new operating system. Plus of course retrieving the data. Most of my work stuff is on dropbox thank goodness, my music is on itunes, my contacts are backed up. I would have preferred to stay with a mac but I can't justify the cost.

I really just want to cry. I know that's ridiculous but all I can think about is not having that money to reduce the overdraft, having to use a machine I don't really want, the time it's going to take to move everything over.

I even applied for an argos card so I could spread the cost over 6 months and not have to see it all go in one big lump didn't qualify for it. Not sure what that's about, unless the self employment is sticking a big black mark against me. According to my credit reports on experian and noddle i have an ok rating. But do have bad rating from a few years ago so that might be it.

And I don't care how money saving it's not, I'm going to go and sit in the local cafe and have a coffee and cake while I try and catch up with everything I didn't get done yesterday

I should be pleased, it's a new computer and I made sure I got a well reviewed, robust one with good performance for cost (lenovo). And I was able to get it with the tax refund, and I can claim as capital allowance for business. I was sensible and didn't accept my Mum's offer of lending me additional money to get a mac. I was going to need to buy a new computer anyway, but was planning more in 6 months than now.

I'm still really upset about it though!

hohum

Rethink:

no, i am not going to the cafe dammit. I'll just make myself a sweet coffee and sit in the garden...

beanielou

Happy shiney new diary
Keep posting!

hohum

Hah. That lasted didn't it?

So, seeing as I already have a diary, may as well keep within this one.

So the focus of this diary may change slightly...at least, I have a different reason for the goal.

Before Christmas my Mum and Dad offered to put up a deposit for a house for me and my partner. To be honest, I had always written this off as an option. We are both self employed and low earning, and I couldn't see how we'd ever get close. I also felt that we prioritised other things above saving for a deposit, and that was fine.

However, with this option we started to really think about it. My partner's Dad is also able to offer towards the deposit. With both our parent's support, it suddenly started to look feasible.

I have done some initial research and realised that it might be possible for a) us to be offered a mortgage and b) for it to be affordable. I am NOT interested in getting into a precarious financial position purely to service living beyond our means! In fact when I looked at an example repayment on a 20 year mortgage, based on what I believe we'd be able to borrow (about £70k), we would be paying less than we do now in rent. Even with the additional costs, insurances, assurances, maintenance we'd still be paying the same as we do in rent.

HOWEVER we currently have a stumbling block - I'm the employed one and my business brings in half of what my self employed partner does. Plus, I still have exactly the same debts as I did at the beginning of this diary.

I have told my parents that it's an amazing and generous offer, but that we probably need a year to get ourselves sorted. I have been having fun looking at auction properties (I come from a long line of house renovators, self builders and DIYers. I think it's a syndrome. I'd rather take on the interesting blank canvas with potential than the well presented teeny tiny house )

So I need to up my income, which means getting more contracts in my business, and I need to pay back my overdraft of £1940.00. And save £1000 odd for solicitors fees. And see the mortgage broker who's been recommended to me to figure out my options.

Problem is, my take home pay this month and for at least the next six months is £640.00 and my partner's income doesn't look much more than that at the moment, but he tends to pick up work at quite short notice. It does make budgeting challenging. I need to do a joint SOA and for this I will use his income from the last tax year.

Although I often run out of money, I have managed not to increase my debt any further during the past year and a half of reduced income and I think although we can't do 'monthly budget' quite like you would with a regular income, I think we are good at living in our means. I will see once I start costing all this!

So the first steps to figuring all this out is

- SOA reflecting current position
- get details and make appointment with broker, so I know what I'm working towards
- update company forecast to see what's viable to pay ourselves over next 11 months
- upping income - I am slightly reluctant to take on additional part time work as I spent 4 months working 6 or 7 days a week earlier this year and I think it's counter productive, ie at some point something is going to suffer. Quality of work or my health usually. My ideal would probably be an evening a week (I waitressed my way through university so have lots of experience). This could bring in an extra £150 a month.
-Looking at spending. I have already reduced a lot of outgoing, but there is one I'm considering that's a fatal weakness of mine...takeout coffee! I don't really buy clothes (went mental in Boxing Day sales and spent £80 of Christmas money on a coat, a jumper and a scarf) but I have a takeout coffee I estimate twice a week. I am trying to figure out what to do with it. I need pretty immediate and tangible rewards, and denial does not really cut it with me. I am thinking a glass jar and everytime I don't have a coffee I put the money in it? So I see the money adding up and it's like a reward for not having it. Plus I could always have my free Waitrose coffee..

So that's for starters. Onwards.

hohum

Not exactly the most regular diary keeper am I? Always seem to just manage a week and then the idea of living like this for ever defeats me.

So, just last week I have got a second waitressing job. I'm paying 20% tax because it's second income. To be honest, that's not so bad. I do a tax return and often the overpaid tax comes back. It's my tax savings!

It's been tricky this last month to pay the bills, we got in arrears with our rent and mostly because I had a moment of f-it and took my focus off managing my money. Horrible, I bought the arrears up to date but not before seriously thinking we were to be evicted. Apparently that's not the case. But I was really annoyed with myself for letting it get so far. Also does not help with getting a mortgage.

So I started looking for what would work budgeting wise, the aim being to stay within our means for four months. I've seen others recommend ynab, so I checked it out and really like it. One of my issues is that our income fluctuates month by month, and we do the classic living like kings/paupers. I need to do a budget every month as our income changes, so that changes the discretionary elements of the expenditure. Obv the bills don't change, but if I don't budget we will !!!! the whole lot away with the glee of having a positive bank balance.

So I sat down last night and made a budget, and got boyfriend to join. Talking about money makes boyfriend really anxious, so I have to approach carefully. If I talk about specifics it's easier eg 'how much money is due to you this month' and 'do you think £40 will cover your petrol to x destination?'. He doesn't care how it fits together, give him a clear target.

This was also the first time I have budgeted 'our' income. We have seperate current accounts and a joint bills account. The bills account has made my life a lot easier - I know how much we have to get there by the date the bills come out.

I also felt a bit sick when I realised that boyfriend has an income gap for two months BUT I styled it out because if I panicked then he would too. So we just looked at this month, and I worked out we can actually do it. We're pretty good at living frugally, it's the living like kings that can throw us out. I will post this month's plan shortly, but the upshot is we cover everything and have £20 each to spend on whatever. This might seem a lot but it should cover entertainment, theatre, caf!s, clothes, trips, hobbies etc I don't like feeling too restricted so appreciate that small flexibility. It's quite possible I may not spend mine.

Already we have a challenge because boyfriend accepted dinner invite with old friends, plus he has regular social. Regular social costs him £6 in drinks plus a takeaway (which he'll skip this week) which leaves £14 for dinner with friends. Tricky, we shall see if he sticks to it! I have some work away so that will be a challenge to not spend on food whilst working away all day. Boyfriend also has a gig later in the month he wants to attend. He has suggested selling his old CDs via music magpie, which gives him enough to see gig. I think that's fair enough.

The other challenge is that his car needs an mot and a lot of work. Plus insurance is up for renewal. Last year we paid in lump sum, can't do that this year. We may be at scrapping car, however he will need for work this summer so we will need to find a replacement by then. I'm going to cross that hurdle next but one step at a time!

hohum

Also forgot to mention spoke to a mortgage broker, will talk to another for comparison and see which we prefer. The one I spoke to chatted for 40mins - I was trying to wind up the conversation being mindful of his time but he kept talking! He would charge a fee of £425, £125 up front.

Budget thing is going well, which is what I came by to update. Boyfriend is getting it. He even proposed that we make a list so he can do a cheap aldi shop, £40 for week plus £10 market purchases. I still had to nudge for meal plan but we have

Home made fried chicken, potatoes and veg (one half a chicken)
Chicken noodle soup (other half chicken plus stock from carcass)
Dal & homemade chapati
Chilli salad bowls (hairy dieters recipe, boyfriends favourite thing ever)
Spaghetti bolognese (or penne bolognese, using other half pack of mince)
Lentils and sausages (using green lentils)

He will be at home next week so is buying coldcuts and tinned soup for lunches. I'm the cook, if it takes more than 3mins prep he's not interested. I'm doing salads, couscous, frittata for lunches.

I felt really happy last night, we're really tackling this together. We're close but often have seperate friends/interests, so it's nice being a team.

I have also agreed that he can spend £30 this week and I will spend £10. He's not a big spender but this week happens to have two unusual social occasions in.

hohum

I spoke too soon... Boyfriend just found out he needs to pay for accommodation for his next job. He'll be able to claim it back but we won't see that money for 40 days. And seeing as the job is over the Easter weekend, kinda would have been good for the employer to tell us that sooner. Found somewhere for £25 a night. Lord knows what it will be like. We got cash back too so might see that at some point. Just have to find £100 extra in the income/ reduce the expenditure by £100. Good times. Good times.

Oth, stayed within budget on groceries. £38 for the week.

Eta his meal out turned into takeaway and his mates bought him beers. So saved on that at least.

hohum

Further budget challenges: water direct debit bounced. We pay over 10 months so I got taken a bit by surprise by DD date. It's in the budget but for the end of the month not the beginning. I don't get paid until 15th so will need to persuade boyfriend to put more into joint account. He's pretty much paid all the bills this month so I am worried he'll get despondent! He has started a little character called 'the budget'. He is on board but I think is happier if I steer on finances. I also think he likes to have me make the decisions so he can moan about having to stick to a budget, but will stick to it. For example last night (his final social obligation) he chose to drive and stick to diet coke so he could save money. Funny sausage.

Likewise we are starting to view houses and he's saying 'you make the final call, because you have stronger feelings on the house. I just want to live with YOU'. I am thinking it's the biggest financial commitment we will ever make, maybe he MIGHT want some input. He does have some clear opinions which I am taking in to account, I just think he's uncomfortable with expressing them maybe? Anyway he really, really likes cellars or basements. He also thinks three bedrooms would be better so we can let one (we use one as a study). I agree with this. He has some areas which he will not consider at all. I also have a couple, although they don't completely match up. The problem is for our budget if we want 3 beds I think we are looking at ones that need work or are further out. Or might not also have a basement as we are going toward semi detacheds with our budget & requirements. He's also interested in a project, as am I, but I'm not sure he really gets how much it costs to get people to do the work or what a conversion entails.

Also need to check Santander account alerts for joint - could swear I set up alerts for this very occurrence but apparently not, just a letter...so annoying as the whole point of this budgeting exercise is to avoid this situation and stop bounced payments on our credit record.

Discoveries re my own money emotions... I treat with small value food items. I feel trapped when there's not enough flexibility. I like figuring out how me and boyfriend work with money, I'm understanding him better if not myself. I am a !!!!!!!!!! - other people feel bad about accepting a coffee/meal/drink from someone, I have no problem with it!

Mixed emotions about how much my parents help/ are helping me out. I'm self sufficient but it has been a very long time since I was able to buy them lunch. They are giving me money for a deposit. They wouldn't give me what they can't afford. I am a 33 year old woman though, it is a bit daft.

hohum

Woah fr33loader is a banned word on here?

hohum

So for clarity, here's THIS MONTHS SOA. Every month is different and so I have given up trying to do a representative one. This is taken from my YNAB budget...It's not showing how much interest we pay - this isn't a minimum payment but basically this month we paid £45 on boyfriend's overdraft and will pay approx £30 on mine, which is where the surplus appears. I will put some comments in red

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 819.3 There could be more to come, not sure how much but in region of £60, not counting until I see it
Partners monthly income after tax....... 501.05 This can range from £200 to £2000!
Benefits................................ 0
Other income............................ 120 Boyfriend's dad gives him money every month. I'd like to save this but this month, needs must
Total monthly income.................... 1440.35

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 450
Management charge (leasehold property).. 0
Council tax............................. 72 think this is over 12 months
Electricity............................. 22
Gas..................................... 28
Oil..................................... 0
Water rates............................. 25.9
Telephone (land line)................... 12.5
Mobile phone............................ 35 mine approx £17, boyfriend PAYG
TV Licence.............................. 12.18
Satellite/Cable TV...................... 0
Internet Services....................... 12.5
Groceries etc. ......................... 190
Clothing................................ 0
Petrol/diesel........................... 70
Road tax................................ 0 expires end of may. Question as to whether we will have a car at that point. Cross that bridge next month.
Car Insurance........................... 50 Not actually due, expires end of April, will have to go monthly payments so trying to get something in here
Car maintenance (including MOT)......... 0 clearly something needed here but this month I can't make that happen
Car parking............................. 10
Other travel............................ 46 my bus pass
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 80 covers smokes, cafes, socialising, anything bought not groceries for the two of us
Holiday................................. 0
Emergency fund.......................... 0
Halifax OD repayment..................... 10
Natwest OD repayment.................... 10
Charitable giving....................... 2
Santander OD charges.................... 18
Driving Lessons......................... 46.75 I'm really close, don't want to stop these now
Amazon Prime............................ 9.99
office 365 subscription................. 7.99 claim back as self employed expenses
Account fees............................ 9
Class 2 NICs............................ 21.6
Total monthly expenses.................. 1251.41


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 50
Car(s).................................. 300
Other assets............................ 0
Total Assets............................ 350

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Natwest OD.....................1914......0.........19.8 as above costs approx £25-30 in interest every month
Halifax OD.....................96.73.....0.........365 :eek: I know right? Big, big aim of this budget is to stop boyfriend using this to 'help us out'. It's like our own little unwanted payday loan
NI debt boyfriend..............320.......90........0
NI debt me.....................180.......15........0
Total unsecured debts..........2510.73...105.......-


Monthly Budget Summary
Total monthly income.................... 1,440.35
Expenses (including HP & secured debts). 1,251.41
Available for debt repayments........... 188.94
Monthly UNsecured debt repayments....... 105
Amount left after debt repayments....... 83.94 actually about a tenner once interest comes out

Personal Balance Sheet Summary
Total assets (things you own)........... 350
Total HP & Secured debt................. -0
Total Unsecured debt.................... -2,510.73
Net Assets.............................. -2,160.73

Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

I also have an income contigent student loan of £14000. To be honest in my head it's like graduate tax as will be deducted from wages through PAYE. Last year I made the income threshold for the first time and paid I think £60 in repayments. Happy to continue with it on that basis, it's not a priority debt to me.

So my aims this month are:

Stay out of ridiculous Halifax overdraft
Break even
Reserve £10 to 'pay back' ie remain in the account for each of our overdrafts. It's tight and car issue is looming: boyfriend needs for work in May, tax and MOT due end of April, not enough income in April to cover it. Looking in to lifts and borrowing a car.

Oh and the £110 we had to find this month for accommodation is not included in above, it's being subtracted from available budget next month. :rotfl: 'available budget' currently -£1398.

Music Mapgpie all packed up with a hopeful result of £45ish pounds to go to boyfriends account. £25 will go towards a gig he wants to go to, £20 we will put towards next month deficit! Maybe I should be putting it towards debt payments if I'm talking about being 'debt free' but there's enough gaps in our budget and I'd rather be not getting any further into debt at this point.

We really don't have that much sellable stuff so wondering what else we can shift. Most of our clothes are second hand, we've got a few books but have already sold the ones we can get money for on amazon buy back. I'm considering a car boot but fear being slightly embarassed by how worthless our worldly possessions are! As before, I'm good at not spending money which means don't tend to have brands etc lying about. Will have a chat with boyfriend and see what he thinks.