What's your method of physically paying "savings" off debts?

Lalala_3

I've had LBM's before but never really taken it seriously. Now I am determined to get rid of the millstones around my neck so that I can start making choices with my life rather than having to work where I do/the hours I do/use my income for loan repayments forever etc etc.

But, one of the areas I think I have gone wrong in the past is that whilst I might scrimp and save all month, the money I "save" eventually gets spent towards payday as I think "Wow" I've done really well to stick to my budget this month, I haven't overspent." But I don't then take what's still left and put it towards paying off my debts.
So although I can stick to a budget now and haven't been adding to my debt (and that's a step at least), I haven't been paying things off any quicker than I would have anyway

So how do other DFW's do it? Do you do it daily (i.e. on NSD's do an online transfer of, say the £5 that I might otherwise have spent) at the end of the month/week when you see how much is left the day before payday, or at the start of the month so that you haven't even got the temptation of spending it?
Would be interested to know your approach so I can work out what would be best for me.

ThankYouAndEnjoy!

Hello

On payday, work out the difference between income and expenditure for the month, and put any excess straight into a separate account? - that way, at months end, you could say decide to split the money 50/50 , 50% going to o/pay debts and 50% going onto a luxury spend.

Or, you could include any excess into your budget to make instant o/payments on the debt.

Personally , i would pay into a separate account first; if you have any unexpected bills/expenses its easier to get a hold of your money, and doesnt cost you anything

lamplady

I have 2 bank accounts, one that money get paid into and bills are paidout of, and the other is my weekly housekeeping money. I transfer what is left over every week from the housekeeping, and what is leftover in the mai account on a monthly basis.

I think it's really hard when you budget carefully and scrimp not to have blow outs, and transferring the money the way I do helps me in that I'm not looking to payday all the time, as I have the same housekeeping each week. One thing that has helped me stick to things long term is increasing my housekeeping from £110 to £120 a week, it just seems a bit more flexible and manageable so I feel I'm suffering less.

The other thing I do is have an aim each month...such as getting X debt down to £3500. It really helps me focus on cutting back, rather than just tranferring random amounts.

hypno06

I have as many things as possible set up as online banking so then I can transfer even just a couple of £s over to a credit card etc if I have saved money in the course of the week.

So, if I get a few £ from Amazon, I can immediately pay it off my egg card. If I get paid for mystery shopping, it can immediately go off my egg card. If I am within my shopping budget for the month, then that money is left in cash in my jar, but I go online and transfer an equal amount over to the credit card, then use whatever is left in cash in the jar as the start of the next month!

Online banking is definately the easy way - no excuses not to do it!

SarahNeedle1872

Hi Lalala,

Much like Hypno, I use online banking. As soon as I have made a saving or made some Amazon/eBay money, I transfer it straight to my saving account (CC debt is at 0%), and any change gets put into my jar then banked when theres enough - not banked any yet tho!
My tactics will change when the 0% ends (altho I REALLY want enough money to pay it off by then!)

Sarah x

lynzpower

online banking for me too, although I have been known to physically take cash into the bank ( yes barclaycard im talking to YOU!) when they wouldnt let me phone bank.

At the moment, me & OH are doing the 1000 challenge, and say last week we I saved 10 off our shopping budget by storecupboarding & using vouchers, this generated a tenner, so I immieidatley wrote a cheque to barclaycard for 10.00.

immoral_angeluk

We have 3 bank accounts.... bills, living and savings. Dh's wages get paid into the bills and anything over what we need for bills goes straight into savings. Then we live week to week using tax credits which get paid into the living account and we have set budgets. IE we get £102 tax credits every weds. £12 of that is put into savings, £50 for food, £10 for petrol, DH gets £20 for his works lunches and personal spending and I get £10 for myself and the girls. Also our child benefit is paid into the living account but goes straight into savings.

then it's just a matter of self control to not spend it.

edit I use online banking

firesidemaid

like another poster has said if you have credit card debts NOT on 0% pay it off asap - online banking is fab for this. the motivation of seeing your debts come down WILL make you spend less and transfer more.

if you are on 0%, again transfer money immed. to a high-interest savings account to the same effect.

Crown

I absolutley love the idea of transferring the odd £1 here and 50 there to the credit card debt. The Statement each month would be enormous!

Also does it cost the banks to process the payments? If so they wouldnt be to pleased if a million Money savers started doing it on a regular basis lol

Storm

When I get paid I work out how much extra I can make immediately & set up the payment online (although I leave it in my bank a/c until a week before the payment due date to get the maximum interest!)

Any extra that I make during the month I keep a track of on a spreadsheet & set up a reminder to transfer this before the due date as well.

My personal spending money I keep track of on a spreadsheet as well, so when I withdraw cash or use the debit card I can see how much I've got left to access that month - rather than checking the balance in the actual bank!

lynzpower

i heard it costs 50p to process a cheque

which is wy everywhere seems to be phasing them out i suppose!