Taking control of the bank accounts

chasingfreedom

Well we've finally, after much discussion made the decision that I will take control of all of the finances. I am much more organised and have been trying to pay extra each month to reduce our debt but my hubby is spending money like it's going out of fashion. He's agreed now to let me deal with everything. What a relief!!


We've just set him up a new basic bank account so we'll transfer his money for diesel, spending money etc into that each week and then I will have his old card/bank details and continue his DD's and keep the rest to pay off extra money.

I feel like there is light at the end of the tunnel at last. A long way to go yet but feeling hopeful

enjoyyourshoes

Reconcile your bank account balance every day with all purchases/DD/SO credit card payments.


Save for annual , 1/2 yearly bills etc (transfer money calculated to cover these into highest interest bearing account)


Don't pay for insurances etc monthly as pesky banks get you with credit charges (interest)


Get compound interest working for you (with regular savings) instead of against you


Discuss monthly with partner where you are both up to with your financial objectives


Radically over hall/challenge/question all costs/expenditure/DD/SO/Bill etc and use MSE to get best deal or live without (its amazing what one does not really need !)


Great and good luck keep the communication and clarity going between the two of you as this can scupper things easily

chasingfreedom

Thank you for the excellent advice.


We're certainly not in a situation currently where we can pay yearly bills upfront and unfortunately we will need to continue paying insurances etc monthly at least for this year I think.


We have a high level of debt, some with really high APR (which I am working on first!) Do you suggest trying to save money even despite the debts we have? My brain tells me I should clear the debt first and not incur the additional interest but I'd be interested to know other opinions or reasons for saving aswell if there are any.


Thanks again for your reply

enjoyyourshoes

Check out the interest rate the monthly premiums are charging you.


Compare that Vs debt interest rate


and you are correct pay off the highest interest rate first (unless you have a 0% and then it goes ballistic, then calculate what you need to save to pay that one off)


Just reread what I said, key thing is to radically change both your attitude to spending. We don't NEED many things we buy, so don't buy them. You can only spend the £1 once ! Much of our overspending is £1 here £1 there, coffee, fags, alcohols, mags, lunch snacks etc etc. See if you can both stop these and use the cash to pay of debts.


Food- have a list in kitchen (not on list does not get purchased)(my kids are getting the hang of this!) Go to shops as little as possible as they continue to tempt us ! Cook from scratch and freeze, I shop Fri and cook all following weeks meals that same day, including sarnies for kids and then freeze them)


Ensure you do daily reconciliation which include any (try to avoid CC purchases if you can) credit card purchases (internet purchases can also be 'lost' so make a note of ALL in diary or similar). Keep a running balance on your bank account with the daily reconciliations.

Liliyanna

chasingfreedom wrote: »

Do you suggest trying to save money even despite the debts we have? My brain tells me I should clear the debt first and not incur the additional interest but I'd be interested to know other opinions or reasons for saving aswell

Hi CF,

I think the main school of thought in this situation is to balance the interest rate on the savings against the interest rate on the debt. If you are paying more interest on the debt than you would earn on the savings then you need to pay off the debt before starting to save.

That said it is always wise to have a small cash buffer against the unexpected/emergencies, as you can imagine what that amount might be is different for everyone.

I'm glad you've persuaded the OH to let you take control, I did that for us and it was the only way we managed to get debt free.

Good luck on your journey


Lily x x

Heffi1

I struggled with the thought of saving while paying off debt, but someone explained it to me this way.


If you have a small/medium emergency fund for when things go wrong, i.e. the washing machine breaks down, the hoover stops working, the car needs new tyres, then these need to be saved for, if you have the emergency fund ready to replace or repair these items when they happen, you do not then have to put the cost onto credit cards to get through the disaster, therefore your debt is not increased and you can breathe a little easier.


If nothing breaks it is nice to have that amount sitting there just in case. once it is built up, you can then aggressively pay down the debt.


I hope that helps.

triple_choc_chip

enjoyyourshoes wrote: »

Save for annual , 1/2 yearly bills etc (transfer money calculated to cover these into highest interest bearing account)

Don't get too hung up on 'save' in this instance, everybody. enjoyyourshoes could just as easily have used 'budget'. Budgeting for known periodic expenses is not saving. Just as in the SOA, adding up all annual expenses and dividing by 12 shows you your real cost of living.

Whilst struggling to overpay debt you may not be able to put enough by each month but it may stop you frittering because you think there is money spare in the months when there isn't a quarterly bill or a car service to pay for.

Good luck and remember - it gets easier, you've done the hardest part already!

chasingfreedom

Thanks everyone for your support and advice. I feel better already knowing I am proactively tackling this issue.


The level of our debt has been highlighted for us recently by my husbands change of job and a cut in salary (not voluntarily!!) and we are really tied by the debt we have.


We'll get there though

lazer-zxr

Best of luck. I'm in a very similar situation, having recently been given control of our finances. Listen to the advice above . I am using YNAB successfully to organise my way out. Only 3 months in and we're turning the corner .... But it's a long way back.