Renovations and Repayments.

smallholdingsister

Hey family LK.
Happy weekend!

AlexLK

gallygirl wrote: »

I expect it's double that at least Alex.

No-one can tell you how to live your life (though that doesn't stop us trying :rotfl:). However, at one time you were in denial of your debts and how much better did you feel when you got to grips with those?

Don't underestimate how far your money can go if you get to grips with it. I'll stick my neck out and say you could pay Little K's school fees out of Mrs K's salary and your earnings if you were both determined to do so (which she's not, so you'll never be able to prove me wrong ).

Alex I cannot describe how empowering being in charge of your finances is - literally life changing :T.

Do you count money spent on eating out as part of the food budget?

Will admit I was pleased to deal with and clear the debts.

:rotfl: You sound like my father re. getting to grips with money. He has taken to telling me I need to learn how to not spend everything I earn recently.

heartbreak_star wrote: »

Comments in my most beloved purple

Remember your parents fell off their pedestal. Don't put them back on it.

Shopping and whatnot is all about changing your mindset from "what do I fancy" to "what have I planned". And I would bet with every certainty that if I gave you a portion of my lasagne or curry, you wouldn't know if it had been frozen or not.

It took me a little while to get the hang of sorting out meals, but now it's just second nature You can do it - as GG said, remember how empowered you felt when you dealt with your debts. This is the next step.

HBS x

Thanks, HBS.

Mrs K says the same thing about frozen food. I suppose a blind taste test may be in order. As for planning :rotfl: ... this is me we're talking about.

hiddenshadow wrote: »

I spent several years using the head-in-the-sand "I'm not adding to my debt so it's all OK" la-la-la land. Trust me, knowing where you spend your money is worth it. Maybe it pushes you to do some things you're resistant to (like meal planning ), maybe it just confirms that X is a priority in your life and you do really want to devote £Y to it (e.g. my hypothetical £500/mo petrol amount listed above). Either way, you're ahead of the game because either 1) your spending is the same but you're more confident that it's what you want to spend your money on, so less guilt/stress/what if?/etc 2) your spending decreases in areas that you don't care that much about, leaving you more money to dedicate to things you do (cars/music/LittleK/etc). (Or both!)

Also, you'd be surprised at how much of a different the "not really worth it" money can make.

That's a really interesting way of looking at it.

I suppose it's very childish of me to see 3) Spend parents' money. Mrs K finds it embarrassing. In a lot of ways I see our income as a bit like an allowance: no incentive to save, if it runs out no big deal and in return for listening to a lecture from my father I'll be able to resolve the situation. Pathetic, really at my age.

AlexLK

Goldiegirl wrote: »

Ah ha ! A flickering light bulb moment about handling your money efficiently by budgeting!

This sort of thing doesn't happen overnight, but requires some work over a few months.

A working budget is your key to living the life you want, in the most cost effective way as possible

My suggestions

Set up a spending diary to record all expenditure for both of you. I'd suggest doing this for at least a month before you move to the next stage (December might not be a good time to start, as spending is not always representative of the average).

Next, use the information you have gathered from your spending diary to complete a statement of affairs. (I don't know where the link is, but I'm sure it can be found somewhere on MSE)

Your SOA is yours to use - you can post it on here if you want help, but you don't have to - it's your choice

Next, analyse every single category. Are you getting the best deals, can items be bought in the most cost effective way, can things be reduced or cut completely without compromising your quality of life, when you are spending can you get any added value on your expenditure?

Once you get a clear picture of what you are spending, it is surprisingly easy to spend less, and not compromise your lifestyle.

Food is generally a very easy target

Consider meal planning. Maybe list a weeks worth of meals, and each day select the one you want - thereby when you go shopping you'll know exactly what you want, and won't buy items that will end up being unused and thrown out. Can you buy things like rice, pulses, pasta, oils, in bulk, at a lower price? Consider experimenting with your freezer - put your prejudice about frozen food aside for a while. Maybe find a good supplier where you can buy quality meat in bulk at a lower price than you do now, and keep it in the freezer until required. Maybe you won't even notice that it has been frozen

A food budget doesn't have to be about value baked beans and lentils - it's about eating what you want, but at the best possible price

Regarding petrol - can you cut some of the driving for pleasure? If not, at least make sure you are getting added value from your expenditure by joining a loyalty scheme and collecting the points so you can cash in the points for treats.

I know the general expectation is that one day you'll take over your parents empire. In order to be a successful businessman you'll need an understanding of budgets, figures and accounting, so start now at home.

Thanks, Goldie.

Do you think a budget is needed no matter your income?

I do think we need to work out what we spend in relation to what we earn. December wouldn't be a bad month for us to start, we don't do a lot for Christmas and since MSE have spent very little on presents. If anything food is slightly cheaper as Christmas / Boxing Day / NYE / New Years Day food is provided for us.

Mrs K and I have been talking about what our next steps are which basically equates to starting anew, learning by our mistakes but not dwelling on the past. Not really sure how I'm going to achieve this as I think to the past a lot. Though this is for our marriage, it seems to apply equally to our finances.

Wouldn't call my parents' business an "empire" :rotfl:. However, I understand I can't use the excuses of not liking technology and not being good at Maths forever.

maman wrote: »

:rotfl:

Despite all his infuriating ways Alex is always endlessly polite and patient. I don't know how he manages it. What a star!!:T

P.S. I expect most of the food you eat I restaurants is frozen or days old. And shops don't have daily deliveries either.:p

:rotfl: I try my best to be polite and patient. The way my parents brought me up wasn't all bad.

Can't say for certain that the food I eat in restaurants is fresh but we don't (as a rule) eat in chain restaurants.

welshlady33 wrote: »

I take it you haven't discovered the wonder that is the mortgage overpayment calculator on this site!!

Also did you or anyone else on this lovely site happen to read an article in the Daily Telegraph money makeover section about a couple who earned 190k pa, spend it all and more every month, have 8k credit card debt and only few hundred pound savings and worry they might have to sell their buy to let flat to fund private education for their 2 little girls. It made my brain hurt!

For some reason it made me think of Alex a little bit ( the private education bit) and I wondered what you would think about their situation.

On another note - are you going to be doing elf of the shelf or similar with LittleK this Christmas?

I've discovered it but despite wanting to pay the mortgage off, I can't say it particularly motivates me.

Can relate to spending more than earnings, despite earning what is seen as a good amount of money (never been in the £190K bracket though, that's some serious spending) . As for what I think to it, well I'm not shocked. Do know my parents would be disgusted if Mrs K and I earned £190K per year and couldn't pay for son's education. :rotfl:

We'll do elf as son likes it despite me feeling more apathy to Christmas than usual.

AlexLK

DollyDee wrote: »

Oh Alex - sorry to hear you had an awful day yesterday but today is a new day. Please try to do something productive (take it out on the grouting!) and you will feel better.

When I'm fed up I attack the ironing with a vengeance. Amazing how quick I get it done. Satisfying to see one pile reduce and another pile grow. Bit like "IN" and "OUT" trays!

If your furniture business really is finished, now is the time to reduce the spending. You might not miss the furniture money that much.

One thing, look at the figures in your signature - £32297.54 paid off in 16 months and over £10000 saved this year. That is amazing and you should be very, very proud.

Hugs from Dolly.

Thanks Dolly. Pleased to say grouting is all done.

Furniture business has slowly turned into a nightmare. The main reason things have gone terribly downhill is because of my relationship with my ex-business partner. I hadn't imagined he'd try half the things he has to make life difficult for me. Now, I've just had enough. Recently the income has been almost non-existent. Considering getting into the classic car game with the business capital, else I'll only need to give it back to my parents which would drastically cut what I can make for savings (use business capital to buy things for profit). Won't waste the money but my parents don't trust me anymore. Things are bad when your own parents wish to see a business plan... :rotfl:

I am pleased with my savings this year. The debt figure is complicated as it was mainly paid through selling some nice old things I'd collected. Know I was berated for it at the time on here but quite glad my interests mainly fall into either appreciating or at least non-depreciating ones.

slowlyfading wrote: »

I'm good thanks, busy! DS seems to want my attention all of the time

Hahaha, they all do that.

smallholdingsister wrote: »

Hey family LK.
Happy weekend!

Thanks, smallholding. Happy weekend to you also, or what's left of it.

AlexLK

Savings update:
+£200 made on something I've sold.
+£30 usual amount.
+£80 because we've been extra good boys and girls this week.

Total: £10,750.

Luckyinlife

well done alex great saveings :]

gallygirl

AlexLK wrote: »

Do you count money spent on eating out as part of the food budget?

Doesn't matter what I do Alex - it's what would work for you. Personally I have a food budget and an eating out budget. Strangely enough when the latter takes a hit we come in well under on the former .

AlexLK wrote: »

Mrs K says the same thing about frozen food. I suppose a blind taste test may be in order. As for planning :rotfl: ... this is me we're talking about.

You like 'nice' food Alex which is why it's even more important to plan. Some recipes are much better if meat marinades overnight and 'second day soup' is well known to be better :T.

AlexLK wrote: »

In a lot of ways I see our income as a bit like an allowance: no incentive to save, if it runs out no big deal and in return for listening to a lecture from my father I'll be able to resolve the situation. Pathetic, really at my age.

"Start of lecture"
Yup, it is pathetic - so do something about it!!!!!!!

Mrs K is onside so work as a team - you've proven yourself in selling cars etc at a profit - so sit down with her and plan out what to do. How would you advise someone else to go about it? Where is the best place to source pens, watches, furniture etc? Make a list of all possible places (am guessing you stumble across some but make deliberate visits to other places). Are there any fairs of use? Estate sales? Junk/antique/charity shops? Make a plan based around that. Maybe one day a week visit a different nearby area - you can do that now Little LK is at school. (No, you don't NEED to have lunch with your parents every day).

You've said before you don't want a 'proper' job, which is fine, but I think you need structure in your week to stop you lying about dwelling on the past. Keep yourself busy, sort out a timetable for yourself. One day on sourcing items, one day doing up, one day looking for ways to sell (ever get that website up and running ?), one day on DIY, one day 'playing' if needs be.

"End of lecture".



ETA - lots of 'nice' restaurants use Sous Vide meals Alex - posh 'boil in the bag'

Watty1

Fab lecture from Gallygirl. Almost counts as the start of a business plan!

gallygirl

Watty1 wrote: »

Fab lecture from Gallygirl. Almost counts as the start of a business plan!

ssshhhh. Don't scare him anymore than necessary :rotfl:.

hiddenshadow

AlexLK wrote: »

Do you think a budget is needed no matter your income?

I think so - I suppose if you earned more than you could possibly spend then it wouldn't matter, but I imagine even (probably especially!) those super high net worth people have financial plans in place. You don't get to keep your net worth (whatever size) if you waste your money (or spend mindlessly).

FWIW, from what you've posted I imagine our household income is roughly twice yours, and starting a "real" budget (as opposed to just guesstimating all the numbers and generally living on less than what we earned) has made a massive difference. Our net worth has doubled since August 2014 (when we started really budgeting) - more than that, really, as I haven't counted any increase in our house value, just the decrease in the mortgage amount.

I've discovered it but despite wanting to pay the mortgage off, I can't say it particularly motivates me.

Then figure out what does motivate you. Perhaps sit down with MrsK and (to borrow a really dumb business phrase) do some "blue sky thinking". Imagine all the various possibilities for your lives in X years (5? 10? 20?). Live on a boat? Travel the world? Own 500 BTL properties? [STRIKE]Build an eco-home and live off the grid?[/STRIKE] (confused you with edinburgher for a minute ) [Insert K household dream(s) here]

It sounds like she is motivated to pay off the mortgage, so that's fair. If you can find something that gets you as excited, you can work towards both (and if you're excited about something it's a whole lot easier to work towards it!) If you decide you can spare, say, £500 from your income towards your goals (whatever they may be), you can then split that money across them. Perhaps 50% goes towards the MF plan, 20% towards a classic car fund (?), 30% towards the BTL "empire". The point is, if you're mentally/emotionally engaged with the savings, you'll have more reasons to go out of your way to save (and it may "click" easier as far as why/how you would reduce your shopping/plan your meals/[insert other saving thing here]).

Having our mortgage balance be £0 is just a stepping stone towards what our lifestyle would/could be then - more flexibility in where/when we work, ability to move somewhere quieter/with more land, and (for me) the possibility of [STRIKE]a pony[/STRIKE] several horses. (Shockingly DH is less excited by that last one, though he's on board with it as long as he's not on cleanup duty. )