Need help with money

RedBlue

I have never been good with money but now I am "slightly" more grown up and want to save towards a mortgage deposit, I need to get myself sorted out.

I am 27 and earn just over £22k p/a. I have one credit card with £650 on it and one store account with £160 on it. I also have a loan with £6k remaining over 2.5 years at £250 a month.

I got a decent bonus from work this year so I am using some of the money towards clearing the credit card and store account so my only debt will be my loan. The rest of it is going into a savings account which I cannot access (if I can access it, I don't trust myself not to withdraw from it).

On paper, my incomings are more than my outgoings but I am always overdrawn before payday comes around. I have tried keeping tabs of what I spend but this lasts for about a week then I forget about it. I think I must just spend small amounts here and there which add up to more than I realise.

I can't continue like I am so I need help.

What are your suggestions?!

19lottie82

Hello, first off complete a statement of affairs (SOA) using this template

http://www.stoozing.com/calculator/soa.php

and post in on here, so we can advise.

However, there is not much we can do if it's just all down to do with you having no will power.

A trick I have used ion the past is to set amount for "spends" for the month, once all my bills have paid, then divide it in to 4 envelopes, one for each week.

chanie

I do the same as lottie, I take out some money at the beginning of the month and give myself a weekly allowance.

I think you should be strict with yourself and keep a note of all your spending over the next month to see where your money is going before setting a budget.

I still have treats, but I'm much smarter with my money - e.g. my Mum saves her magazines for me to read, I bring my lunches to work from home and I buy multi-packs of can drinks and take these to work, if I want one.

thecassman86

I there :wave:

I'll also echo the above comments and complete an SOA so that we can try to save you money here and there.

RedBlue wrote: »

On paper, my incomings are more than my outgoings but I am always overdrawn before payday comes around. I have tried keeping tabs of what I spend but this lasts for about a week then I forget about it. I think I must just spend small amounts here and there which add up to more than I realise.

As 19lottie82 said, it really is down to willpower and if you're truly committed to clearing the debts then it would be on the front of your mind constantly - not just for the first week. Another suggestion we make is to keep a spending diary; for this, carry a notepad around with you (or just use the "notes" bit of your phone) and record every purchase that you make. This will, firstly, make you realise where your money leaks out to, but also, it'll make you more careful about what you do buy - nothing makes you consider a purchase more than having to write down it's cost!

Good luck

hettiecarro

Hi
The SoA is a must - get it on as soon as you
can.
The others are right that you need to be clear about your spending.
A couple of tips:
ONLY before take enough cash for what you need.
Leave cards at home.
I taped a strip of paper inside my purse (you could do it in a wallet) -
It just had written on it 'ARE YOU SURE'? - clearly visible when I went to get my money out!
On a number of occasions stopped me in my tracks and made me think.
Good luck with it.

gayleygoo

A spending diary is an excellent tool for working out where all your money goes. Write down every penny that you spend everyday in a notebook. At the start of each month make a note of any regular outgoings like bills and loan repayments, writing down the date they usually come out and how much they are.

Add up at the end of the week what you've spent on certain categories (I have separate budgets for food, household stuff, electric and fuel, clothes, "pocket money for treats" etc) so can see where I've overspent each week, and try to stay within my budget for the month (the last week often gets a bit tight!)

Being in control of your money is a habit that needs to be learned, unfortunately it doesn't happen overnight! But once you're getting there it's very rewarding to have that control, and I have sometimes got a kick out of not buying something, rather than buying it! Because I knew I didn't need it and therefore saved money that can go to something I'd rather have.

Set goals and challenges. Short term this could be "no spend days", keeping to a budget, cutting out takeaway coffees or impulse snack buys, putting spare change towards debts etc. Long term, it will be paying off debt for now, and saving for the mortgage.

Would it be possible to use more/all of your bonus money to pay off debts? The interest rates on your debts are probably much higher than what you get on your savings - you'll save in the long run. The £250 p/m adds up to £7500 over 2.5yrs - wouldn't you rather have as much of that £1500 interest as possible?

Angry_Bear

Also, consider cash for your incidental spends (coffee, magazines, juice etc.). Take out the amount of cash for the week and leave the debit card at home. It feels much more real to spend cash than just on the card, and when you get to the end of the money you took out it's often a bit of a surprise. When you use your debit card you tend not to notice how it mounts up.