need to start living within my means

licsa

I've been definitely overspending. When I got the keys to my flat two and a half years ago I was at about £3000 debt - and that was because I changed the heating system (long story). Between then and now I accumulated another £5000 or so even though on the top of the above income I get about £2K each year in bonuses.

Re: Christmas it really varies, two years ago I spent a lot of money as we flew to meet family and there were a ton of them.. this year my child spent Christmas abroad with my ex and I stayed home so not much, just some local friends and v close family.

Yes the spending diary is a good idea, need to find a mobile app for that to make sure I update it all the time.

tooties

Good Luck

regards

enthusiasticsaver

Yes, I would also suggest a spending tracker app on your phone or a spending diary as on the face of it you should be able to keep within your income so I am guessing you are spending a lot on going out, clothes or travel. How about you take out spending money in cash each week for going out, work lunches etc and keep to that rather than using a debit or credit card? Same with birthdays, work out which is worst month, they rarely spread out evenly in the year and put money aside for it each month.

licsa

enthusiasticsaver wrote: »

so I am guessing you are spending a lot on going out, clothes or travel. How about you take out spending money in cash each week for going out, work lunches etc and keep to that rather than using a debit or credit card? .

Eating out, entertainment, and travel yes - those are the main ones where I'm overspending.

I've tried using a separate bank account for a while for everyday spending, but that didn't work out as it had a fee-free overdraft attached to it and I was always dipping into that -- and then at each pay day I was paying back the overdraft and my credit card debt wasn't reducing much or even increasing. The cash idea is interesting, it could work if I stick to the weekly budget.

Bravo_Zulu

Setting a budget for the week, taking it out in cash and using that had a massively beneficial effect on my finances. Physically seeing the available cash helped me decide which frivolous thing I wanted to spend it on, petrol usually won...

greensalad

I'm a big fan of using Money Dashboard to help identify areas that are being overspent in.

Sign up and link your main account. Then you need to be quite diligent checking all the transactions and tagging some that haven't been caught by the system. I do mine every 3 days. It only takes about 10 minutes I find.

I discovered I was spending an insane amount on snacks, alcohol and clothes. I've since reduced that and my December pie-chart looked very rosy! It's a good way to check exactly why money is leaving your account.

I find it a bit quicker than keeping a spending diary because it catches about 75% of my purchases and tags them for me.

licsa

Okay so for now I guess this below should work - each month:
£300 payments to the Santander & Tesco credit cards
£200 holiday savings
£25 emergency fund savings - believe this is a bit low but better than nothing?
£25 presents savings

This leaves me with almost £300 per month for everyday spending - clothing, cosmetics, shoes, pampering, eating out, work meals, entertainment, and medical. So a cash budget of no more £70 per week, it doesn't seem that low... and if there's any leftover (right!) it will to to a furniture/household appliances fund.

licsa

greensalad wrote: »

I'm a big fan of using Money Dashboard to help identify areas that are being overspent in.

Thanks, I'll look into that. My bank account is with Barclays and they have a 'Money Tools' app that tracks spending, I will try that one first - it's similar, automatically categorizes spending and some of them need to be done manually.

enthusiasticsaver

licsa wrote: »

Okay so for now I guess this below should work - each month:
£300 payments to the Santander & Tesco credit cards
£200 holiday savings
£25 emergency fund savings - believe this is a bit low but better than nothing?
£25 presents savings

This leaves me with almost £300 per month for everyday spending - clothing, cosmetics, shoes, pampering, eating out, work meals, entertainment, and medical. So a cash budget of no more £70 per week, it doesn't seem that low... and if there's any leftover (right!) it will to to a furniture/household appliances fund.

Yes, that certainly looks workable and would make a massive difference to your debt. The biggest stepchange for you could be thinking before you spend especially if you have just put it on cards before - do I need this or want this? Is there a cheaper alternative. Always have this in the back of your mind until it becomes second nature and put the credit cards away until they are paid off. Good luck.

licsa

Thanks! I only have money for groceries and bills left in my account. I'm supposed to get a shopping refund of almost £100 next week and I have a £50 gift card so I will use these for everyday spending over the next three weeks (pay day is on the 25th).

How can I move this thread to the debt free diaries section?