A Diary of Reinventing Ourselves

pelirocco

I think you should ask to see the company accounts . They should be pretty straightforward as the ltd company is just a vehicle to be more tax efficient on what is really self employed status. He has no employees and there must be very little company expenses,(very little work for an accountant tbh )the normal and most tax efficient way to pay his self would be by dividends , however you can only day these out of profit.I think you need to find out the state of the company bank account and or any loans it has....if he has a directors loan it means he has taken out more then he has earnt

getmore4less

Actualy I have had another thought, it does not matter if he drips fees to save this tax real or imagenary just you need to know how much.

so rather than random amounts based on the debt status why not a fixed amount every week or a few set dates and so long as it cover the planned spends etc.

might need a tweek for cash flow(a big bill month) but if the car and the interest are solves £1700pw/6933pm should cover your current budget with a bit of debt repayment.


Those with dividend based business should be able to check this...
to generate that from the business using 2 PAYE basic salaries(£155pw no tax or NI) to get NI credits and dividends for the rest(20% corp tax on that)

£500pd should result in around £1770pw after tax if all the dividends come out to one of you, more if you are splitting then so you .

Dolphin1

Forward_thinking wrote: »

The only thing I can't work out in YNAB is why my categories are still in green and saying the full amount is available to spend when I am -£3k. How do I get this to be reflected here?

If you mean that you have money available to spend in each category that is because if you set a budget and you haven't input the transactions yet (because they haven't happened yet) then you will have money available to spend in each category.

However, the question is what does it say at the top of the month? If you haven't yet got the income to match the budget that you have set then there will be an overbudgeted figure at the top of the month in red.

So for example, if you have set a budget to spend of £3,000 then you should really have (or be expecting) income to match what you have budgeted. Until you receive the income you will have an overbudgeted figure of minus £3,000. If you then input income of £2,500 this month, this figure will drop to minus £500.

If you then spend all of the £3,000 budget that you have planned to spend you will take forward an overspend of £500 in to the next month and you will need the income next month to cover this and next months budget or you will carry forward an overspend in to the following month and so on.

However, if you only spend £2,900 of the amount that you have budgeted then you will only carry forward an overspend of £400.

Ideally, it would be better if the income matched the budget but in order for that to happen you would need to either receive £3,000 income or reduce your budgeted spends to £2,500. If this is not going to happen then at some point to get back on track you will need to spend less than you receive in future months to try and eliminate this overspend somewhere along the way.

Sorry, that all got a bit long-winded and I don't know whether it will help or make things even more confusing .

Forward_thinking

Thanks everyone. I get that dolphin - I have made sure our budget matches our monthly income and we will get another £2.5k soon. Not sure where we have lost the other £1k - need to look at it properly.

And thanks for the explanation. I totally understand the minus figure at the top and how that will decrease as more funds come in. What still confuses me despite your great explanation is why the categories are still in green and saying available to spend when there is clearly not and there is a big fat minus in the right hand corner. I thought each category would be red. Anyway, I have signed up for a class tonight on YNAB so hopefully that will help.

Getmore - OH says he prefers to spend on the credit card and then pay it off each month rather than having an enticing number in the accounts which looks like there is lots of cash to spend. However, we're going to change things so we get one or two poss payments per month coming out at the same time. Yes, we could drip feed but it is so much harder to track, especially if i do end up using YNAB.

Right, off to blow some cobwebs off. It's sunny and lovely and I'm in a great mood.

Forward_thinking

Pelirocco - I do intend to start monitoring the company accounts. I know OH has to sort out all the company accounts for April so I am waiting until he has finished whatever he is doing. Getmore - I just mentioned to oh that it's quite strange that he is worried about paying a bit of interest (if that is so) by taking one lump payment each month when we are paying hundreds each month on interest.

Dolphin1

Forward_thinking wrote: »

Thanks everyone. I get that dolphin - I have made sure our budget matches our monthly income and we will get another £2.5k soon. Not sure where we have lost the other £1k - need to look at it properly.

And thanks for the explanation. I totally understand the minus figure at the top and how that will decrease as more funds come in. What still confuses me despite your great explanation is why the categories are still in green and saying available to spend when there is clearly not and there is a big fat minus in the right hand corner. I thought each category would be red. Anyway, I have signed up for a class tonight on YNAB so hopefully that will help.

Are you talking about your working balance on your account? That is nothing to do with your budget. Presumably it is an overdraft balance or a credit card balance or both? Anyway, if that's the case, I have no experience of setting up an overdraft on YNAB (google may be your friend there ).

However, I do have experience of setting up a credit card as I have one that I use and pay off every month, you can run it as a separate negative on-budget account and then transfer money from your current account to the credit card account when you make a payment. See how you get on with the class tonight and maybe see if there is one about running a credit card (and overdraft if you have one) but if you have any more specific questions, let me know and I'll see if I can help.

Good luck!

Forward_thinking

Thanks dolphin. Still confused - we are not in overdraft yet - only on YNAB which has allocated for all categories. I'm just confused because the column for available spending at the right hand side of each category says the full amount is available (which it obviously isn't). Hopefully tonight's class will help if I can escape from the children.

A brilliant and accomplishing morning. I have just gone live with my Facebook page for my venture. The main website is going to take a lot more time but at least I now have a means of reaching out to people. I am also going to look into some form of advertising. Time for me to put my 8 years of studying to the test - exciting times! :dance:

enthusiasticsaver

Great to see you so positive FT and good luck with your new venture. Hope you get some clients soon.


I can't add anything re YNAB I am afraid as I don't use it but my daughter does and says it is great once it is all up and working. Hope you manage to get your credit cards on to a 0% rate soon as I think that will help you a lot.

pelirocco

Forward_thinking wrote: »

Pelirocco - I do intend to start monitoring the company accounts. I know OH has to sort out all the company accounts for April so I am waiting until he has finished whatever he is doing. Getmore - I just mentioned to oh that it's quite strange that he is worried about paying a bit of interest (if that is so) by taking one lump payment each month when we are paying hundreds each month on interest.

I think you need to look at the bank accounts now

mumtoomany

Well done on getting the Facebook page up and running. Great first step, here's to many more and much business coming your way. M2m.