Do SOA really help?

AliceBanned

FBaby wrote: »

I think this post sums up my query. Like others, I thought that an SOA was a great tool and ASSUMED an accurate one. The point i am -clearly badly- trying to make is that I don't think the most commonly used SOA format is accurate as it makes it so easy to leave out many things.

I realise that my title is misleading though. The question is not whether doing an SOA helps, it is whether the common format one is really accurate and therefore provides reliable figures when it comes to outgoings.

I thought about posting this because I wondered if it would be useful to remind all new posters who have a go at the SOA as standard that it is very possible they might have left some things out unwillingly and that it would be useful to keep a diary of spending for a number of month and re-ajusting their SOA if necessary.

Ahh yes I had misunderstood the point of your query. Maybe it isn't enough on its own, the SOA. Although many people helpfully respond to the SOAs when posted, to try and work out whether something is missing or doesn't quite seem right. You just need to scrutinise your own spending as well and then tweak the SOA if needed. I think most people getting to the point of doing the SOA have already realised that they need to keep a close eye on what they spend though and hopefully if they do this there won't be those extra spends in the future.


Basically if the debts don't start going down immediately and are increasing then the SOA is missing something and it is possible to identify that this is happening quite quickly. I suppose different people have different ways of monitoring - whether keeping money aside for certain things in envelopes or only using cash and withdrawing the maximum that can be spent before next payday etc.

AliceBanned

PS I managed to cover everything in mine I think but if I realise I have missed something out I will add it. I think the categories generally cover everything though, for most people?


I found it invaluable as people fed back and told me yes repaying my debts was doable with a lot of effort. Without having it in black and white I was drowning and demoralised. I will know after the first month if I've missed anything out - but usually the things people might miss out if they are in debt are the things they want to deny - exactly the source of the problem.

thegreenone

FBaby wrote: »

I think the main issue is that it is easy to forget things that are paid only once or twice a year (beyond car insurance etc...) and things we don't expect.

miscellaneous should be for the latter. The rest should be picked up to adjust the SOA and make it accurate.

Maybe it might be interesting to take one month and see what has cropped up in people's budget they had not foreseen.

One more that came my way this week-end: my OH arranged an outing as a surprise present, but I had to pay for travel insurance as a pre-requisite. Ok, he could have paid but it would then have just gone on his list! It was only £5 anyway, but it is things like this that I would never have thought of before experiencing it.

Another one this morning, sending a present to a relative abroad. Budgeted for the present, but not the costs of airfare.

Oh, and DS's phone battery died yesterday, £15 to replace. DS came up with a list of ingredients for the cooking class he is doing this term, £5.

Sadly, I could go on if extending to a week rather than just this week-end!

These are all small costs, hence not focusing on them individually, it's when they are all added up that it suddenly becomes a significant impact on the budget.

Yes, that's why there's a category entitled Emergency Fund.


You build it up in the good months and raid it in the bad ones.

catriona79

FBaby wrote: »

But that's my point, I don't think it does that because I think it makes it easy to leave out a lot and gives you a false sense of what your monthly outgoings are.

Hi there FBaby,

I think you are missing the point that your SOA is only as good as the info you put in it.
So use it as a reiteration. Do an SOA and monitor your spends. Do a more accurate SOA. Home and dry.

The SOA is only a tool.