Renovations and Repayments.

cazmanian_minx

Alex, as a blinding example of why budgeting is good, no matter what you earn...

Mr Minx's and my joint income is about £85,000 a year now. Less than £20,000 of that is my contribution. I budget and am down to my last £4,500 to pay off from original debts of £27,500. He does not budget and still has between £5-10,000 (not sure of the exact amount) on cards plus just under £20,000 of car loan, despite owing way less than I did when I started DWD. For the last 6 years he's been saying 'When I pay off the cards in 8 months' time (it's always 8-10 months' time), then I'll be able to save over £1,000 a month.' Well, fantastic, if he'd knuckled down and paid them off when he said he would, he'd have £60,000 in the bank plus interest. As it is, he's more in debt than he was when he started, because he can't resist 'a bargain' and when he wrote off the truck he decided to buy an Audi A5 with all the bells and whistles (not brand new, thankfully he's not that daft) instead of something completely paid for with the £9,000 the insurance paid out.

His choice, I have long given up nagging on this front, but it does frustrate me that he wastes so much money.

newgirly

Lots of brilliant advice there Alex, maybe it is the perfect time to start now littlek is settling in at school, a new chapter might be just what you need

maman

AlexLK wrote: »

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.

I'm 100% with MrsK on this Alex but it must be incredibly difficult to be financially independent knowing that the bank of mum and dad is just up the road and open all hours. What I'd suggest is that you try to separate (in your head as well as practically) your future inheritance from letting your parents pay for your day to day life with MrsK and LittleK.

Goldiegirl

AlexLK wrote: »

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

Yes, I think so.


It's essential to know what you've got coming in and what you've got going out.


Once you know that information, you can set up a budgetary scheme that fits in with your life.


A person on a very low income who wants to pay off debts will probably want to account for every last penny. But a person on a larger income, with no debts, may want to paint with a broader brush stroke, and account to the nearest £50 or £100 (or £1000!:rotfl:).


The key is to set up a system in the first place, then tweak it until it's working perfectly for you

AlexLK

Luckyinlife wrote: »

well done alex great saveings :]

Thanks.

gallygirl wrote: »

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 .

My problem is I haven't a clue how to start or what would work for me. I do know I need to be able to live on a certain amount every month else things will end up getting very silly and there'll be nothing to pass onto my son one day.

gallygirl wrote: »

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.

My main problem is being lazy. Yes, I like nice food, even more so when someone else cooks it for me.

gallygirl wrote: »

"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'

I like the making money out of things I'm interested in as a hobby, don't want it to be a full time job as that will take some fun away. Really don't enjoy the pressure to find things but when things come along and I make a few £££s, it's enjoyable. Idea behind using the business capital to buy cars wouldn't provide me with a regular income, I'd likely buy nice examples at the right price, put up for sale with healthy profit and bide my time. Do keep meaning to learn how to make a website but no, it's hasn't materialised yet.

Considering trying a 'proper job' again (teaching) but realise that isn't going to happen until son goes to prep school due to time issues. Understand what you mean about keeping my mind from dwelling on the past. When I'm teaching, I've no time to think about the past at all, so that's a big plus for me, I enjoy it and it doesn't take the fun out of my hobbies. Appreciate it doesn't pay well (top salary of £36,000 for a job that requires everyone to be qualified to postgrad level is abysmal, really) but I can look beyond that and think the challenge and much less time to be dwelling on the past would be good for me.

Tilly_MFW_in_6_YRS

Look at every corporation across the globe - budgets, forecasting meetings, monthly reviews against targets, quarterly reviews etc etc etc.

Every solid company will be doing the same but on a smaller scale and running a home is no different.

Basic fundamentals of how much comes in and when, fixed costs and when they go out are key to every household working well.

I could go on and on but I won't.

Tilly

AlexLK

Watty1 wrote: »

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

gallygirl wrote: »

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

:rotfl: :rotfl: :rotfl:

hiddenshadow wrote: »

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.

All very interesting points and really does make me wonder how much money I waste on a month to month basis.

Suppose my main downfall is the parents. If they had nothing, I'd probably care much more about how much we could save, our net worth etc. As the situation is I find what we can save to be such a drop in the ocean that it's hardly worth the effort. I can understand it would be very satisfying to be 'self made', parents are smug enough about it but that just doesn't seem an option for me.

All that said, I don't want to waste money unnecessarily.

hiddenshadow wrote: »

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. )

What motivates me? Honestly don't know the answer to that. In regard to what motivates me to work and study (I'm actually quite good at the latter), money is very low down on the list; I like the challenge and intellectual simulation.

Paying the mortgage doesn't motivate me as it is, ultimately, a pointless exercise and not one that will make my parents proud as our mortgage really isn't a large amount of money to them. Also, won't be living here forever. Wife sees being "independent" as important but frankly, we aren't independent or 'self made' and never will be.

I know this sounds like a rant but 30% of £500 is £150. Per year that's £1,800, after ten years there still wouldn't be enough capital to make a BTL deposit. Suddenly, that's a lot of pie in the sky. Using parents' current properties as leverage to buy more isn't, though.

I'd like to think I'm at least realistic about what money buys.

AlexLK

cazmanian_minx wrote: »

Alex, as a blinding example of why budgeting is good, no matter what you earn...

Mr Minx's and my joint income is about £85,000 a year now. Less than £20,000 of that is my contribution. I budget and am down to my last £4,500 to pay off from original debts of £27,500. He does not budget and still has between £5-10,000 (not sure of the exact amount) on cards plus just under £20,000 of car loan, despite owing way less than I did when I started DWD. For the last 6 years he's been saying 'When I pay off the cards in 8 months' time (it's always 8-10 months' time), then I'll be able to save over £1,000 a month.' Well, fantastic, if he'd knuckled down and paid them off when he said he would, he'd have £60,000 in the bank plus interest. As it is, he's more in debt than he was when he started, because he can't resist 'a bargain' and when he wrote off the truck he decided to buy an Audi A5 with all the bells and whistles (not brand new, thankfully he's not that daft) instead of something completely paid for with the £9,000 the insurance paid out.

His choice, I have long given up nagging on this front, but it does frustrate me that he wastes so much money.

This is exactly the reason I want to start living to a budget and knowing what we spend.

newgirly wrote: »

Lots of brilliant advice there Alex, maybe it is the perfect time to start now littlek is settling in at school, a new chapter might be just what you need

Really not sure what the future is, NG. Certainly think I need to start to live on a certain amount of money every month and know where the rest goes.

maman wrote: »

I'm 100% with MrsK on this Alex but it must be incredibly difficult to be financially independent knowing that the bank of mum and dad is just up the road and open all hours. What I'd suggest is that you try to separate (in your head as well as practically) your future inheritance from letting your parents pay for your day to day life with MrsK and LittleK.

I do know this is my problem. There are times I feel as if I'm some kind of spoilt child and it's not nice to know my parents don't trust me (can't blame them, though :rotfl:).

AlexLK

Goldiegirl wrote: »

Yes, I think so.

It's essential to know what you've got coming in and what you've got going out.

Once you know that information, you can set up a budgetary scheme that fits in with your life.

A person on a very low income who wants to pay off debts will probably want to account for every last penny. But a person on a larger income, with no debts, may want to paint with a broader brush stroke, and account to the nearest £50 or £100 (or £1000!:rotfl:).

The key is to set up a system in the first place, then tweak it until it's working perfectly for you

Going to give the spending diary a go this December. My idea is to write the date, what it was and the amount in an Excel spreadsheet and calculate at the end of each day / week. Would it be an idea to highlight in red if on reflection I've spent money on something for the sake of doing so?

Tilly_MFW_in_6_YRS wrote: »

Look at every corporation across the globe - budgets, forecasting meetings, monthly reviews against targets, quarterly reviews etc etc etc.

Every solid company will be doing the same but on a smaller scale and running a home is no different.

Basic fundamentals of how much comes in and when, fixed costs and when they go out are key to every household working well.

I could go on and on but I won't.

Tilly

You are my father, AICMFP. :eek:

Seriously, he says stuff like this to me all the time, or has done recently. Usually as a part of telling me I don't know how much it costs to raise a child or how irresponsible I am. Suppose he's right, really.

Tilly_MFW_in_6_YRS

If you are up to sharing the data, I would even knock up a budget for you and then you can tweak it during 2016.

Interesting that your father is saying the same thing. How does he know you don't have one?

Night. Tilly