A Diary of Reinventing Ourselves

getmore4less

Forward_thinking wrote: »

Thanks matchbox. Question two defogged. Onto question one.......it feels wrong saving and putting aside when we have so much debt to pay.....

There a a couple of ways to deal with this.

Keep the two totally separate so everything is saved for and debt only goes down.

For some that is the only way that will work, get the debt on 0% and it does not matter that's why that step is often critical.

Use the credit cards as the savings tool, this needs carefull management and commitment.
Eg you want £1k for Xmas so pay an extra £100pm off a card.

Dec you have £1k you can put back on the cards.

I suspect it is too early to try this you need to get this budget working first. If you can get your big annual spends spread out the savings pot will fill and empty on a regular basis, eg don't do Xmas and holiday at same time.


It's all about how good the tracking is and that takes a bit of practice.

m4rc

I do things differently, mine is almost a money diary, and it allows me to plan to the day. I use Excel, as you may or may not know you can have multiple spreadsheets within a sheet, sort of like pages in a book. They are all the same, labelled Jan through to December, along the top of each are the days of the month. Down the left at the top are the income sources. Below this the outgoings. I have the due date and amount listed for each, if weekly or monthly or fortnightly it shows this. I then enter the amounts for each payment in or out. These total for each day for income and outgoings, take one from the other and you have a daily total.

Of course you need to have a starting point. Each month the 1st uses the last day of the month before as its starting point - obviously.

This is basically how any business would run a cash ledger. It's very very simple, it doesn't sing and dance like YNAB or MS Money, but it means I am in charge of it and I don't have to compromise.

Under headings such as shopping or fuel I have the amounts, if I spend more or less I change the amount on the day. Underneath it all I can write notes, so I have some 'other' sections, you can't just keep spending 'other', you need to track it so I can put 'icecream' or 'sandwich' and see what I spend on.

You can copy and paste this same 'page' for each month, the issue is although your columns will be right - the bill going out on the 14th still shows as the 14th, some stuff will move. So if you buy petrol on a Tuesday you will need to tweak it. When I have time I go and set up the months ahead, so currently I can see 2 years ahead. Of course things will change, but the utilities and rents and shopping dates should remain fairly stable, the amounts you can easily vary.

Doing it this way you can setup anything you like, so you could have rows for anything, no rules, you just insert a row.

I have various outgoings for different savings pots and accounts, so things like Christmas I put an amount in every month, and it totals up what I have in there, if I take money out at Christmas I change the total, so the next month it adds he last months balance and any money I put in this month. If you are good you won't need 27 accounts for all these little things, it can all go in one, and you will know the total and how much is for each 'thing' you are saving for.

What I like about the way I do it is I can see ahead where everything goes. When we were getting debt free I could see that if I paid more to that debt this month the impact it would have a few months later, and so on. Its a more honest system, if you have a column and everything is in that one column I found it harder to track the details and I was cheating. Come month end it wasn't working out. This way I know the balance each day. Does it take long to set up? Not really, the first page will be done in the time you can type in the expenses and enter the amounts. The second page you can copy and paste most of, you do need to be able to use spreadsheets to be able to do simple sums, so the starting amount for each month is the final balance of the month before. I have each months amounts for static items like rent and council tax take their figure from the previous amount, a very easy sum. This means if a bill increases (or decreases) when I change it it's automatically changed on every month from then on. You can't have all the months take the figures from the first month, otherwise if an amount changes you sort of backdate it and mess it all up. I also have a really simple 'calculator) on each page/month. I have all the bank and savings accounts listed, and the balance at zero. When I want to check I go to each account online and enter the balance on the calculator. I also add cash that me or the wife have (ignore a few pounds obviously).The total should be the total I have for today on the spreadsheet. If I pay for something by credit card then I enter the item so I have tracked it, but up the top where I enter income I put the amount again, as it hasn't changed my current balance. Then for the next months credit card balance I add the amount I have just spent, so I know what I owe on each card and how much I need to pay.

It's hard to explain in text, but I hope that's given a little info about it. It's as complicated as you want it to be. You may well find MS Money works for you, if you use a smartphone both have apps, some are really good, there is one called Pennies, it's on iOS and I'm not sure about android, but it's great for tracking all the expenses so you don't miss them. I think it's £4 just a one off payment.

Use what YOU want, but don't be forced to use YNAB or something just because it works for others, you just won't stick to it if it isn't right for you, and that's a total waste of time.

thegreenone

Please don't ask DH to pay himself and then put any spare back to the company. He will have paid tax on it! He needs to gradually reduce his salary to save for the repayments on the director's loan. I'm not quite sure what sort of loan he has taken(?) as my DH has one but doesn't have to repay it until he winds up the company. Is DH paid weekly or monthly?

m4rc

Forward_thinking wrote: »

Thanks matchbox. Question two defogged. Onto question one.......it feels wrong saving and putting aside when we have so much debt to pay.....

It's called budgeting, so you can buy wisely with the money you've saved. If you save £100 a month for Xmas in December you have £1200. If you haven't saved you would spend whatever you wanted, blow the budget on a card, just one more decoration just one more box of roses.

If you were saving £500 a month for Christmas that would be wrong.

Also, you are not saving to leave it in the bank for 10 years, you are making sure you have money for important things. It focuses the mind. You want a haircut, save for it, it will feel like the best haircut ever if you've worked hard for the money.

If you had loads of things you were saving for with thousands in the bank I'd say you could pay down some credit so you reduce your interest, but currently that's not the case. This is about planning so you don't waste. Go to the shop with £100 you will spend £100. Go wih no plan and a debit card giving access to huge amounts or even worse a credit card and you will spend £300.

MrsPorridge

I just keep an Excel spreadsheet one sheet for each month. On my online bank account it allows me to open little accounts and name them and this is what I do for stuff that is not on direct debit so I have accounts as follows:

Oil (we need to get heating oil)
Car 1(service, MOT, TAX, repairs etc)
Car 2
Holidays
Emergency

I just work out a rough cost for the 12 months and then split and pay so much each month into these little pots - but they are all joined to the current account. It means I can see what money I have in there and if something unforeseen happens then I do "borrow" from the different pots.

I think its just finding a system that suits you and as others have said it doesn't need to be complicated.

getmore4less

thegreenone wrote: »

Please don't ask DH to pay himself and then put any spare back to the company. He will have paid tax on it! He needs to gradually reduce his salary to save for the repayments on the director's loan. I'm not quite sure what sort of loan he has taken(?) as my DH has one but doesn't have to repay it until he winds up the company. Is DH paid weekly or monthly?

Don't think they work like that, the company cannot pay the loan back on behalf of the director/employee without a tax impact.
(winding up gets special tax reliefs)

That would be getting money out of the company without tax.

Up to hubby and accountant to sort this out and say what will be left to run the household.

thegreenone

Sorry, should have taken more time.


My contractor DH has an £11000 director's loan for a car he bought in 2008. There is no time limit to pay it back but he is paying £500 a week into a personal ISA with a view to buying another car soon (his 51 plate is in the garage right now) and then saving up again to pay back the loan before he closes the co. at retirement. I am suggesting FT's DH pays himself less each month and puts the loan money aside, as my DH is doing. Sorry, didn't explain properly.

Eager_Elephant

MrsPorridge wrote: »

I just keep an Excel spreadsheet one sheet for each month. On my online bank account it allows me to open little accounts and name them and this is what I do for stuff that is not on direct debit so I have accounts as follows:

Oil (we need to get heating oil)
Car 1(service, MOT, TAX, repairs etc)
Car 2
Holidays
Emergency

I just work out a rough cost for the 12 months and then split and pay so much each month into these little pots - but they are all joined to the current account. It means I can see what money I have in there and if something unforeseen happens then I do "borrow" from the different pots.

I think its just finding a system that suits you and as others have said it doesn't need to be complicated.

Have been following for a few days and thought I would pipe up to say that I do the same as MrsP.


I have loads of savings accounts with my main bank so when I log in I see my current accounts(2) and all my savings accounts (10).
Every pay day I move money into each pot - I have worked out roughly what I think I will spend over the year and divided it into months.


I try not to borrow from any pots as I like seeing them grow!!


I have a separate account for Xmas - this is with a building society and I log in about twice a year. I have a standing order every pay day to send money across.


I also have YNAB (the old version, not the new pay monthly thing) and I love it but I do not keep my savings in my main account - I am still on a learning curve and don't trust myself which is why I have the separate savings accounts.


Wanted to also say that I think you are doing amazingly in the few weeks since you started posting:T

Mattygroves2

thegreenone wrote: »

Sorry, should have taken more time.


My contractor DH has an £11000 director's loan for a car he bought in 2008. There is no time limit to pay it back but he is paying £500 a week into a personal ISA with a view to buying another car soon (his 51 plate is in the garage right now) and then saving up again to pay back the loan before he closes the co. at retirement. I am suggesting FT's DH pays himself less each month and puts the loan money aside, as my DH is doing. Sorry, didn't explain properly.

You have nine months after the end of the Company's financial year to repay the Directors loan or face paying corporation tax on the amount outstanding. The usual way is to declare a dividend and not draw the cash. Another way is to put a salary through the books but not take all of it out as cash.

Something the OPs OH and accountant need to sort out but it doesn't stay tax free for very long. The Company will get the tax repaid when the loan is eventually repaid but not paying them back in time isn't good for the cash flow of the Company.

If the loan is more than £10,000 then a benefit in kind arises and gets assessed on the Director. HMRC aren't completely daft. This bit won't get repaid when the loan is.

lynnejk

Hiya FT


Looks like you're slowly getting things organised.


I am wondering why you are paying so much interest on your CCs. I had a look at mine and one is a 0% account, maxed out and the money in interest-paying accounts, and the other one is 12.9% atm which I pay in full every month.


Please, please have a look at Martin's newsletter this week - it's just on the right there, and scroll down to read what he says about CC accounts. Also, right near the bottom there is a link to lots of savings on kids things which you might find useful.
Lx