Tired of playing catchup!

denialanderror

Hello,

I'm new to the forum, although have been reading for a while. Thought I'd post to see if there are others a similar situation or with similar goals who may have some advice as I'm finding there isn't really anyone I know in RL in this position.

In summary, I feel like I am in a very precarious position financially at the moment, with too many spinning plates, and feel like I've done nothing but firefight and lurch from one disaster to the next since I was about 18 and at a bit of a loss as to how to change this lifestyle.

I know I need change the way I live and have known this for a long time but feel like years are passing without any real progress. [#SelfPityingNonsense].


Summary of my situation:
- 27, Male, Single, FT in current role for 2 years, earning £34k but have reason to believe my role will probably be made redundant in the next year to 18 months, no concrete plan for dealing with this yet.
- £3500 on a credit card from settling a car HP loan early, £400 cash in a savings account.
- Student loan, repayments taken from wages each month, £5k-ish remaining balance.
- Have to move from current shared house by November this year.
- Will know in next few days if I will have a house share for next year confirmed or have to rent own place.
- Will not be able to make any headway in paying off the credit card balance till at least November as will need to keep every spare penny in cash to pay the deposit and fees on where I end up moving to. This could vary between £1500 and £2500.


My goals are, before 30 (2.5yrs), in a sort of chronological order:
- Find a more secure job with a better salary and better prospects so I can rent my own place and leave the "house sharing" phase behind me.
- Pay off my credit card and student loan.
- Get together at least 3 but preferably 6 months salary in savings.
- Get to a position where I can trade up to a replacement 3 year old car every 3 years.
- Be able to afford holidays.
- Stop impulsive / compulsive / mood related decision making.

The main reason I've started this diary is to identify triggers and patterns to hopefully break the cycle and actually feel like I'm moving forward in life and to keep a focus on what I need to achieve for the long term, during the bad days where it all feels a bit pointless. Any advice welcome!

denialanderror

Current SOA:
===============================
In

---

Monthly Net 1955.07

Out

---

(DDs)
Rent: 366.00+
CT: 50.87+
Elec+Gas: 22.00+
Water+Waste: 27.75+
Phone + BB: 13.99+
TV Licence: 4.02+
Netflix: 5.99
Car Insurance: 32.50
Car Tax: 16.25
RAC: 3.60
Contact Lenses: 22.00
Mobile: 59.00

Food: 120.00
Fuel: 120.00
Haircuts: 19.50
Prescriptions: 8.05
Car Cleaning: 21.00

Clothing - Casual: 50.00
Clothing - Cas Shoes: 10.00
Clothing - Work: 22.50
Dental: 8.33
Car - Service + MOT: 14.99
Car - Tyres: 17.50
Car - Bulbs: 2.08
Car - Repairs: 50.00
Gifts: 58.33

Cash: 250.00
============
Balance 558.82
============


+ These are split bills, currently between 3 of us sharing a place.
* This is my half of the food bill, which I split with my girlfriend, who will cease to be my girlfriend in August of this year, due to a move abroad. Whilst we don't officially live together, in practice we essentially do.


A big expense not included in this SOA is moving house which I have done many times in the last few years.

Baldybear

Afternoon

Always good to have some goals, just some ideas, please ignore me if no help.

Are you paying interest on your credit card, if so can you get a balance transfer, know adding fees temporarily but at least with even minimum payments you will see a much better downward trend.

Anything you can sell on ebay/facebay, any extra work you could do to make some extra pennies.

Think your main priorities are your housing and then having a plan in place for the job. If you can get debt shifted to 0% at least its one less thing to worry about temporarily whilst you get sorted.

Regarding the impulsive/compulsive and mood related decision making am not a lot of help on that. For me it was finally being happy in myself and working out what I want and then the rest followed easily. For me it was me and ex breaking up and him leaving with me a stonking mortgage to pay by myself, but also still in his name. So need to get debt free, stop that spending and get myself free of him. Its a long journey and am still learning but if you really want something then you will find a way to achieve it.

Enough of my rambling, hope it all makes sense and good luck on your journey

Baldybear

Re your SOA can you cut down on netflix and clothing as these seem quite an expense. The other big expense seems car cleaning, can you do yourself

denialanderror

SOA if House Share arranged in time
(I should know by this time tomo)
===================================
In

---

Monthly Net: 1955.07

Out

---

(DDs)
Rent: 500.00+/
CT: 50.87+
Elec+Gas: 22.00+
Water+Waste: 27.75+
Phone + BB: 13.99+
TV Licence: 4.02+
Netflix: 5.99
Car Insurance: 32.50
Car Tax: 16.25
RAC: 3.60
Contact Lenses: 22.00
Mobile: 59.00
Food: 200.00
Fuel: 120.00
Haircuts: 19.50
Prescriptions: 8.05
Car Cleaning: 21.00
Clothing - Casual: 50.00
Clothing - Cas Shoes: 10.00
Clothing - Work: 22.50
Dental: 8.33
Car - Service + MOT: 14.99
Car - Tyres: 17.50
Car - Bulbs: 2.08
Car - Repairs: 50.00
Gifts: 58.33
Cash: 250.00
==============
Balance 344.82
==============


/ This is estimated. I'd be very lucky to get another house share at the same rental price I am currently paying as prices have shot up in this area in the last 12 months.

denialanderror

Baldybear wrote: »

Afternoon
Always good to have some goals, just some ideas, please ignore me if no help.
Are you paying interest on your credit card, if so can you get a balance transfer, know adding fees temporarily but at least with even minimum payments you will see a much better downward trend.
Anything you can sell on ebay/facebay, any extra work you could do to make some extra pennies.
Think your main priorities are your housing and then having a plan in place for the job. If you can get debt shifted to 0% at least its one less thing to worry about temporarily whilst you get sorted.
Regarding the impulsive/compulsive and mood related decision making am not a lot of help on that. For me it was finally being happy in myself and working out what I want and then the rest followed easily. For me it was me and ex breaking up and him leaving with me a stonking mortgage to pay by myself, but also still in his name. So need to get debt free, stop that spending and get myself free of him. Its a long journey and am still learning but if you really want something then you will find a way to achieve it.
Enough of my rambling, hope it all makes sense and good luck on your journey

Hi,

Agree those are my current priorities. I'd love to find housing I could stay in for more than a year!. The short termism of house sharing is driving me mad! Hoping if I can do 1 more year of it, I can get myself into a job where my own place wouldn't leave me broke each month but rents are climbing, currently £800pcm for a 1 bed.

I will be paying interest on the credit card, but it's a lot less than I was paying on the HP loan. I had saved up £3000 this year which I used to significantly reduced the loan balance and I used the card to settle the rest to get reduce the £240 a month payment. Plus side is I do now own outright a car that should last a good few years.

I can look at 0% credit cards but as I've had to move every year for the last 4 I have a problem obtaining credit at decent rates. Best hope is my other bank (who I have an unused card with) offer a 0% balance transfer some time in the near future. They have offered them in the past.
For the sake of £5.99 I think Netflix gets used enough to make it worth keeping but I do agree clothing is an area I'd identified as needing reducing significantly.

I've based the figure on my spending this year but am aware it has been high this year as I've lost about 2.5 stone so had to downsize from Larges to Mediums in everything, including suits and work shirts which were the main expense.

That sounds awful! I don't know your background, but on the face of it I absolutely cannot understand the mentality of a man that would just walk out on a commitment like that!. I'm just about to become single, dreading it but it's been on the cards a while! lol.

snowscreamer

Hi denial and welcome!

I completely feel your situation as we are the same age! Fortune has perhaps favoured me as I have managed to nab a long-term boyfriend and a house but otherwise I suspect I would be exactly where you are. In fact I imagine that many of my school and university friends are in your position but we don't really discuss finances. I do wish budgeting was taught at school, would be very helpful!

Anyway about me (some might sound familiar!): always bumbled along spending as I see fit and just occasionally checking my bank balance. Never saved for anything and often found myself in my overdraft as my account was running on empty and then it was car insurance time. This continued for the first few years out of uni before I moved in with my OH. Each time just as things were getting desperate I would get a small pay rise or a bonus which was enough to put me back on an even keel so I never learnt.

Am learning about budgeting the hard way after "feeling flush" post house move as we had calculated we'd have about £10k left after we moved in but that went in an instant as we bought tons of stuff for the house and did various home improvements without accounting for how we'd pay. Soon we had to cancel our monthly DDs for our credit cards but continued spending naively. Not to mention we had booked a holiday before the house move but hadn't put aside any spending money for that (merrily spent £1500 whilst away). Maxed out the my credit card shortly after we returned home and things suddenly started to catch up. Big interest payments started appearing on OH's credit card, we were both permanently in our overdrafts and our luck had well and truly run out!

Been on this journey now for 6 months, and actually I feel better than ever. So much more in control, and getting far better bang for my buck than ever before now that we are budgeting. Feels like an enormous pay rise - gone from spending £500 more than our income each month to spending £900 less. Just awesome. Even when the debt is gone we are going to carry on budgeting almost as strictly as that way we reduce wasted money and will be able to afford home improvements, another step up the housing ladder etc much more quickly.

In addition to the great support on this forum, what has changed my entire relationship with money is YNAB. I would absolutely recommend it for your situation. Best £30 I have ever spent - we have saved thousands just by tracking where our money is spent and figuring where we can cut back (often not downgrading - just getting better value). Start by importing your bank / credit card statements for June, and make a budget for June as per your SOA above. Make sure you also make a Cash account, and account for all your payments in cash. There is a smartphone app which you can link which makes it easy to record cash payments on the go. Reconcile your bank statements every few days, categorise everything and you will learn where your money is going. Decide what is important and what can be reduced / removed. Also make categories for annual expenses and rainy day funds. I have:

Annual expenses
Car tax
Christmas
Breakdown cover
Car insurance
Home insurance

Rainy day funds
Car repairs
Holidays
Music lessons (paid termly)
Home maintenance
Dental
Gadgets

Then estimate how much you will spend / want to spend on each per year, divide by twelve and budget that amount into each of those categories. If an annual expense is coming up in the next few months then initially this will have to be higher (eg. Christmas there are 7 months left so divide by 7) and then dropped back to one twelfth afterwards. It's important to save for these otherwise you will have a false expectation of how much you can budget for everyday expenses and debt repayment. Nothing beats the feeling of being able to pay a large annual expense in cash.

Anyway that's my two penneth worth... I hope it is of some help. YNAB has literally transformed my life. I would never have allowed so much of our income over the last six months to go towards saving for a rainy day before. We have only spent 75% of our income over the last six months and the rest is saved or gone towards debt repayment. Previously anything left over was money to be frittered away and then some.

Good luck! Will follow your journey with interest.

Snowscreamer

denialanderror

snowscreamer wrote: »

Hi denial and welcome!

I completely feel your situation as we are the same age! Fortune has perhaps favoured me as I have managed to nab a long-term boyfriend and a house but otherwise I suspect I would be exactly where you are. In fact I imagine that many of my school and university friends are in your position but we don't really discuss finances. I do wish budgeting was taught at school, would be very helpful!

Anyway about me (some might sound familiar!): always bumbled along spending as I see fit and just occasionally checking my bank balance. Never saved for anything and often found myself in my overdraft as my account was running on empty and then it was car insurance time. This continued for the first few years out of uni before I moved in with my OH. Each time just as things were getting desperate I would get a small pay rise or a bonus which was enough to put me back on an even keel so I never learnt.

Am learning about budgeting the hard way after "feeling flush" post house move as we had calculated we'd have about £10k left after we moved in but that went in an instant as we bought tons of stuff for the house and did various home improvements without accounting for how we'd pay. Soon we had to cancel our monthly DDs for our credit cards but continued spending naively. Not to mention we had booked a holiday before the house move but hadn't put aside any spending money for that (merrily spent £1500 whilst away). Maxed out the my credit card shortly after we returned home and things suddenly started to catch up. Big interest payments started appearing on OH's credit card, we were both permanently in our overdrafts and our luck had well and truly run out!

Been on this journey now for 6 months, and actually I feel better than ever. So much more in control, and getting far better bang for my buck than ever before now that we are budgeting. Feels like an enormous pay rise - gone from spending £500 more than our income each month to spending £900 less. Just awesome. Even when the debt is gone we are going to carry on budgeting almost as strictly as that way we reduce wasted money and will be able to afford home improvements, another step up the housing ladder etc much more quickly.

In addition to the great support on this forum, what has changed my entire relationship with money is YNAB. I would absolutely recommend it for your situation. Best £30 I have ever spent - we have saved thousands just by tracking where our money is spent and figuring where we can cut back (often not downgrading - just getting better value). Start by importing your bank / credit card statements for June, and make a budget for June as per your SOA above. Make sure you also make a Cash account, and account for all your payments in cash. There is a smartphone app which you can link which makes it easy to record cash payments on the go. Reconcile your bank statements every few days, categorise everything and you will learn where your money is going. Decide what is important and what can be reduced / removed. Also make categories for annual expenses and rainy day funds. I have:

Annual expenses
Car tax
Christmas
Breakdown cover
Car insurance
Home insurance

Rainy day funds
Car repairs
Holidays
Music lessons (paid termly)
Home maintenance
Dental
Gadgets

Then estimate how much you will spend / want to spend on each per year, divide by twelve and budget that amount into each of those categories. If an annual expense is coming up in the next few months then initially this will have to be higher (eg. Christmas there are 7 months left so divide by 7) and then dropped back to one twelfth afterwards. It's important to save for these otherwise you will have a false expectation of how much you can budget for everyday expenses and debt repayment. Nothing beats the feeling of being able to pay a large annual expense in cash.

Anyway that's my two penneth worth... I hope it is of some help. YNAB has literally transformed my life. I would never have allowed so much of our income over the last six months to go towards saving for a rainy day before. We have only spent 75% of our income over the last six months and the rest is saved or gone towards debt repayment. Previously anything left over was money to be frittered away and then some.

Good luck! Will follow your journey with interest.

Snowscreamer

Completely agree! A lot of my financial management to date has been very reactive and involved a lot of luck, although I've definitely got better over the last few years, paid a lot of debt down and never been in a position where I don't know account balances or what needs paying and when. I've just always struggled to get ahead of myself and move forward, for example now I've paid off the car I'm having to think about how I'm going to pay for the next one, so it doesn't depreciate to nothing, there is no provision for this yet...


The good news is it looks like I have a house share arranged for when my current one runs out which means barring no major disasters I've a good chance of getting rid of that last bit of debt by this time next year, and also means I can start making concrete plans which is good for peace of mind.


I will likely have to sign a lease and pay the Deposit, Fees and first months rent in september, which is 3 paydays from now (End of June, July, August). Estimate this to be around £1500 (6 weeks rent as deposit + 1 month rent + £300 in spurious fees). I'll also need to allow some for moving costs, probably about £500 for things like van hire, curtains, TV Licence, BT connection charge and so on.


So need £2000 in cash. With the £400 I already have that means I need to put aside £500 per month on my next 3 paydays which is achievable as there are no major annual bills due and credit card will have to be minimum payments for a few months.


There will be a 1 month overlap which will mean there will be very little of Septembers pay left.
So unfortunately that does mean that earliest I can start thinking about budgeting for annual bills up front is with Octobers pay.


At that point I'll be looking for -
(I really like the idea of having accruals for things, which I think is essentially what YNAB proposes so i've included those in () underneath).


Car Tax = 195.00 is due in November. Considering going to DD for this as from what I've read it seems to be interest free and would work out to £16.25 per month.
(5 Months at £39.00) (Following 12 months at £16.25)


MOT + Service = 178.00 (plus any work that needs doing) due in October.
(3 Months at £59.33) (Following 12 Months at £14.83)


Christmas = 350.00 in presents and travel, family thing, can't really reduce.
(5 Months at £70.00) (Following 12 months at £29.16)


So would need to accrue =
End of Jun to End of Sep = £168.33
End of Oct = £123.83
End of Nov = £101.08
End of Dec = £ 60.24


Not sure this is currently possible while also keeping aside enough to cover the £2000 moving bill. Plus there are several other annual bills so will need to take some time later to work out actual accrual values.


Eurgh...Now I'm just winding myself up. This is what happens, I read my "cash flow" spreadsheet for the next year and the sense of futility descends, essentially whichever way I present it, the net result is, this time next year I will likely be in the same situation, scrabbling around for yet another place to live for the following year, just with no outstanding credit card debt and any pay rise only covering the difference in rent. Least I'm learning to just stop and walk away for a few minutes when the racing thoughts take over.


I appreciate things could be so much worse, I've read some awful stories on here but can't shake that feeling that it's all a house of cards and that I'm not really making much progress, definitely don't want to end up in this position next year.

andrewbro

Sounds like a good plan. On the renewal of car aim I would try and get a decent car that would last five years rather than three years. That may provide you with better long term savings.

snowscreamer

Hey denial,

I know what you mean - when we did our first first's YNAB budget (Dec 2014) it looked like there was barely anything we could set aside once we'd allocated monthly accruals for annual bills alongside the everyday spending. Plus we were in £7000+ of debt. In fact I found that first post: https://forums.moneysavingexpert.com/discussion/5131604

So from our ~£3600 expected income for December (I recommend you don't do this - we are now stuck in a rut budgeting with this month's expected income rather than last month's actual income which will take us a couple of months to crawl out of once the debt is repaid - budget last month's income from the start!!) we budgeted £3585.09 for various saving and spending categories (this was altered throughout the month). Which only left £15 for debt repayment. The first month was a big adjustment to our way of spending and by the end we had overspent in several categories: chalking up a total overspend of *561.90* :eek:
In the end we spent £3565.48 in December, so less than our predicted income but as we had overspent by £561.90 it meant we put aside much less than we had planned to cover the rainy day / annual expenses pots. Sounds horrendous - but actually we still spent less than we were expecting in. Which meant it was a big improvement on previous months. Actually as it happened OH got a small bonus, all of which was able to go onto debt repayment (previously this would have been spent pronto). Debt repayment / buffer savings £381.65.

Move onto January. Had to cover the overspend. So had to budget quite a lot tighter. Still overspent. Overspent by £543.16 so effectively recouped £18.74 of the previous month's overspend... small improvement! Debt repayment / buffer savings £626.89.

Move onto February. Had to cover January's overspend. Budgeted quite tightly again. Still overspent. Overspent by £485.07 so effectively recouped £58.09 of Jan's overspend. Getting better! Debt repayment / buffer savings £343.56.

March. Had to cover Feb's overspend. Tight budget. Still overspent, but this time after three months of practice we only overspent by £171.42. Effectively recouped £313.65 of Feb's overspend. Much better!! Getting the hang of this budgeting malarkey now. Debt repayment / buffer savings £662.37.

April went backwards a little but not much, £289.84 overspend. Debt repayment / buffer savings £450.

May was our lowest overspent yet at £125.41 with £500 debt repayment / buffer savings.


What I'm trying to say is don't give up before you've tried. Budgeting is a skill and it will take you time to find where you can make savings and where your money does need to be spent. The first few months are trickier as you don't have a full 12 months to save for your annual expenses. You will get there. You do have a pretty good income and with some wise spending choices it will go much further. I really couldn't recommend downloading YNAB more. I think it will suit you perfectly. You may find you are unable to stick to your first budget, but then at the end of the month you can clearly see where the overspends are are re-prioritise. Give it a go!

denialanderror

Thanks for your reply, I'm certain once I see it working I'll be able to stick with it, bit like the dieting really, took me a while to get going but now I've made the lifestyle changes I can't see me going backwards.


I've had a quick play with YNAB over lunch but so far finding it very confusing!
It's showing -5749.39 overbudgeted for June which can't be right as my total expenses for that month are only £1355.07, leaving 600.00 to put in the house move pot.


Will have to have a proper look at it when I get home this evening.