How to stay out of debt...?

Pepperoni

I know it's suggested that you do a budget based on your SOA / last 6 months spending, but I've just worked mine out and my god. :eek: I do *not* under any circumstances want to carry on spending that amount of money on the things I do!

So should I just base my budget on what I do want to spend?

The problem areas and average monthly spend over 6 months;
- Food - £650
- Cash machine withdrawals - £325
- Clothing - £385
- Amazon - £175

Everything else is normal / as expected / mostly minimal.

sourcrates

How to stay out of debt ?

It's easy,

Live within your means.

If you can't afford it, do without.

Do that and the rest will fall into place.

strandedinaber

Ah, sourcrates, if only it were actually that easy

Pepperoni, I would suggest that you split the difference between what you are currently spending and what you want to spend. Because you may have very excellent goals for spending, but it's always a shock when you try and cut down.

How much of what you are spending is essential? And what are the cash machine withdrawals and Amazon spends going on? I am assuming that some of the Amazon spends were for Christmas gifts.

tiger_eyes

That's a per month average spend? That does seem like a lot, unless you have eighteen hungry children who all need new shoes. You could start with:

• Halving your food budget, with a view to bringing it down further in the long run.
• Starting a spending diary to figure out where cash taken from cash machines actually goes.
• No more new clothes for now, since you must have plenty.
• No Amazon spending unless it's an absolute essential.

CalumHeath

As Sourcrates has said: live only within your means.

Increase your income. If you can't increase your income then decrease your outgoings.

That's basically it.

~Beanie~

Pepperoni wrote: »

The problem areas and average monthly spend over 6 months;
- Food - £650
- Cash machine withdrawals - £325
- Clothing - £385
- Amazon - £175

Everything else is normal / as expected / mostly minimal.

But what exactly do these figure relate to?

How many people are you feeding, £650 on food is massive for 2 but not huge for a family of 6.

What are the cash machine withdrawals? If you are withdrawing cash and then spending that cash on food/petrol/bills etc then that's ok (but the relevant budget categories would need to be adjusted) but if you are spending it on nothing in particular, that's a lot. Try keeping a spending diary for a month, write down everything youspend that money on and you will see where it goes.

Clothing - again, for how many people? Does that cover school uniform and clothes for 4 kids or just impulse buys for 2 adults? If the latter, it can easily be cut down.

Amazon - buying what though? Essential items or random spending on DVDs/books/non-essentials? Again, can easily be cut down (or even got rid of completely).

Pepperoni

Thanks all. We could afford it but I don't want to spend that money on that - it's just rubbish Plus I'm going on maternity leave in a few months so want to cut back.

Food is for x2 adults and x1 toddler (18 months!). I've started food planning again and I'm really trying to only do one food shop a week instead of numerous dashes picking up various bits. Hoping this will help. Need to get husband fully on board as he's still popping out and getting extras.

Cash withdrawals... god knows. I use YNAB so have a 'spending diary' but if my husband has taken it out, say £10, it's for 'milk' and then the rest get whitters. I'm the same. Wondering if a money pot that can't be opened would help? As well as the obvious not using cash machines! Its also social money - i.e. nights out.

Amazon - we get our nappies from there but the rest... I think with having prime impulse buying is happening. Definitely going to try and get essentials only, i.e. the nappies (subscribe & save is cheaper than buying elsewhere). Have also cancelled the prime renewal which is due in May, the nappies might save but having prime clearly doesn't.

Clothing - I was really surprised by this. Most of it is for me and my little girl, about £10 over the 6 month was my husband!

Sanctioned_Parts_List

How to stay out of debt? Dunno - never managed

But the closest I've come is to set my budget priorities in order as:
1) Emergency fund
2) Needs that I can't survive without (mortgage, food, utilities)
3) Important stuff that will mess me up if I don't pay (clothes, car, debt servicing)
4) Long term savings that will make me free
5) Wants, luxuries, desires and dreams.

And then to watch my accounts like a hawk to make sure I don't stray.

Of course, since I'm an abject failure at this, listen to the people above and below


EDIT: although... I did find that child 2 was a lot cheaper to run than child 1. Between hand-me-downs, already having loads of toys and a lot less "new parent angst", boy the second had a much more austere babyhood than boy the first, and doesn't appear to have noticed.

thegreenone

Do you have food delivered? I find it a great help to keep a closer eye on the amount I spend and no impulses. Don't forget you can freeze milk, bread and cheese so I would recommend asking on freecycle or similar for another freezer before maternity leave starts and make sure it's topped up each week, so no more dashes out. BTW, from personal experience, you can't "dash" anywhere with two littlies so one food order each week. Even if you over order, freeze as much as you can the moment it arrives so nothing gets wasted. Whilst I would normally advocate cash, can you use your debit cards more so you can see more easily where the money goes each week/month? Good luck.

getmore4less

Do a proper SOA based on a full 12 month previous spending not just 6months(you catch ALL annual bills that way)

unless you do a proper budget it's just random cuttbacks rather than a decent forward looking plan.

Pick over every catagory and work out what is sensible.

eg look at all the clothes you have and think about what you need for the next 12months, add a few wants if you can afford it and stick it down on the SOA, £4.5k is a lot of clothes for 2 adults and a todler/baby, don't just think I should be spending 2k, work out what you will buy in advance, how many socks, shoes, nickers, etc will you need then buy them when cheap.

same with everything else.

Food often a good Idea to do spend and waste diary, £600pm may be OK if you like what you are buying and eating it all.

Split booze out from food, and you could split food from household.
The more detail the easier it is to see where the real waste is.

andyfromotley

Budget Budget Budget.

If you are using ynab then put the amount you wish to spend in the catagory and do not spend anymore without taking it from elsewhere (not savings!!)

Unfortunately though this is going to require you to spend less. There is no way around that.