Thinking of consolidating debts

andyfromotley

Hi Colin,

your problem is not lack of income (Yah) it is uncontrolled outgoings (Boo!!)

I and many others on here use a budgeting program called ynab to keep control of what we have spent and crucially how much we have left to spend on each catagory (food, entertainment etc). It costs a small amount but has saved me and others thousands of pounds. There are plenty of free ones about too so have a look around and find one that works for you.

Effective budgeting is the answer to your difficulties. Crack that and you will smash your debt in double quick time.

Oh finally, build up a decent emergency fund given the variable nature of your work, this will help smooth out quiet months and not derail your plan.

Mahsroh

colinahenderson87 wrote: »

I calculated the council tax per month based on the fact our house falls under Band E and for the year 2015/2016 it was £1,513.97 divided that by ten and there are 5 people in this flat so that works out at £30 per month. I've literally just moved to a new flat over the weekend.

That makes sense. Sorry - I had incorrectly assumed you lived alone.

I don't own a TV and only use Netflix and Kodi to watch online.

Alarm bells ringing! This is taken direct from TV Licensing website:

You need to be covered by a TV Licence if you watch or record programmes as they're being shown on TV or live on an online TV service. This is the case whether you use a TV, computer, tablet, mobile phone, games console, digital box, DVD/VHS recorder or any other device.

Even if you're just watching Netflix online, you still need a TV Licence! I'd get this corrected ASAP if you want to avoid a fine!

greensalad

Mahsroh wrote: »

Even if you're just watching Netflix online, you still need a TV Licence! I'd get this corrected ASAP if you want to avoid a fine!

Totally incorrect. As the website states itself:

You need to be covered by a TV Licence if you watch or record programmes as they're being shown on TV or live on an online TV service

Netflix is not live TV. No license required.

[Deleted User]

andyfromotley wrote: »

Hi Colin,

your problem is not lack of income (Yah) it is uncontrolled outgoings (Boo!!)

I and many others on here use a budgeting program called ynab to keep control of what we have spent and crucially how much we have left to spend on each catagory (food, entertainment etc). It costs a small amount but has saved me and others thousands of pounds. There are plenty of free ones about too so have a look around and find one that works for you.

Effective budgeting is the answer to your difficulties. Crack that and you will smash your debt in double quick time.

Oh finally, build up a decent emergency fund given the variable nature of your work, this will help smooth out quiet months and not derail your plan.

Thanks Andy
That's exactly the kind of thing I need. Will definitely check it out.

Yeah I've been thinking of an emergency fund, still recovering from two weeks off at Christmas with no income coming in.

[Deleted User]

:A

greensalad wrote: »

Totally incorrect. As the website states itself:



Netflix is not live TV. No license required.

You definitely do not need a TV licence if you are using netflix.

greensalad

Going back to the original post. Consolidation is not required, and won't help you. You need to create a budget.

Your SOA is incomplete. You really need to knuckle down and prepare a proper budget. Not a budget of what you think you spend but what you ACTUALLY spend.

Here are the steps I've taken myself and I think they're working pretty well. Willpower required.

1. Open a new account just for utilities and bills. I recommend the Santander 123 account because it gives you cashback. (Use their calculator to check the cashback you will receive beats their account fee. If not, find another account).
2. Set all your direct debits and standing orders for rent, utility bills, monthly subscriptions etc to leave this account.
3. Prepare a spreadsheet detailing each cost and the total for the month. In cases where something comes out quarterly, divide by 4 and put that in as the monthly fee.
4. On payday each month, pay in the total amount to the account as soon as you can. Bam. All your bills are paid with no worries of what is going to come out of your account as you spend.

Groceries, toiletries, home things are important too, but are a variable income
1. Use your current account for a grocery spend. Retain your grocery spend in that account. Only use this card for purchasing essentials (groceries, travel and toiletries). You should still have a budget of how much you spend on this.

Now all your bills are done and dusted, I'd recommend focusing on your "fun spends". My fun budget is £70 a week.

1. Every Thursday I transfer £70 to an Optimum prepaid card. This doesn't really give any benefits other than that it's a closed amount.
2. Once it's gone it's gone
3. Top up following week.

Next up, save for inevitables.
1. I run a car, so £35 goes into a "car maintenance" account
2. I am going on holiday, so £13.50 goes into a "holiday savings" account

In the future I'll be adding a Christmas spend account too to save into.

Now, everything that is leftover can be used to service debts. So pay off your debts with the leftover. You now have no money left to play with other than your fun budget. But your bills are paid, your debt reduced and your rainy day savings are growing.

HappyMJ

colinahenderson87 wrote: »

Maybe it is a little low, but I tend to not do a 'big shop' and will go to the supermarkets and spend anywhere between £10-20 as and when, I eat a lot of vegetables and grains. Like I said I don''t eat meat and dairy etc.
I do tend to enjoy eating out and getting takeaways though especially after a night out

I calculated the council tax per month based on the fact our house falls under Band E and for the year 2015/2016 it was £1,513.97 divided that by ten and there are 5 people in this flat so that works out at £30 per month. I've literally just moved to a new flat over the weekend.

I don't own a TV and only use Netflix and Kodi to watch online.

I certainly need to be far stricter.
Thanks

You've not included Netflix as an expense.

Mahsroh

colinahenderson87 wrote: »

:A

You definitely do not need a TV licence if you are using netflix.

Apologies - my mistake - I don't have Netflix myself so mis-understood. I had assumed you can pick up 'normal' TV channels on it.

[Deleted User]

greensalad wrote: »

Going back to the original post. Consolidation is not required, and won't help you. You need to create a budget.
- As I suspected already :beer: came here looking for clarity on that.

Your SOA is incomplete. You really need to knuckle down and prepare a proper budget. Not a budget of what you think you spend but what you ACTUALLY spend.
- You're right

Here are the steps I've taken myself and I think they're working pretty well. Willpower required.

1. Open a new account just for utilities and bills. I recommend the Santander 123 account because it gives you cashback. (Use their calculator to check the cashback you will receive beats their account fee. If not, find another account).
2. Set all your direct debits and standing orders for rent, utility bills, monthly subscriptions etc to leave this account.
- I hadn't really thought of doing that, thanks
3. Prepare a spreadsheet detailing each cost and the total for the month. In cases where something comes out quarterly, divide by 4 and put that in as the monthly fee.
4. On payday each month, pay in the total amount to the account as soon as you can. Bam. All your bills are paid with no worries of what is going to come out of your account as you spend.

Groceries, toiletries, home things are important too, but are a variable income
1. Use your current account for a grocery spend. Retain your grocery spend in that account. Only use this card for purchasing essentials (groceries, travel and toiletries). You should still have a budget of how much you spend on this.

Now all your bills are done and dusted, I'd recommend focusing on your "fun spends". My fun budget is £70 a week.

1. Every Thursday I transfer £70 to an Optimum prepaid card. This doesn't really give any benefits other than that it's a closed amount.
2. Once it's gone it's gone
3. Top up following week.

Next up, save for inevitables.
1. I run a car, so £35 goes into a "car maintenance" account
2. I am going on holiday, so £13.50 goes into a "holiday savings" account

In the future I'll be adding a Christmas spend account too to save into.

Now, everything that is leftover can be used to service debts. So pay off your debts with the leftover. You now have no money left to play with other than your fun budget. But your bills are paid, your debt reduced and your rainy day savings are growing.

Thanks for all of that. I'll be giving this a lot of thought over the coming month.

greensalad

No worries. I live with my partner so it's a bit different but basically we have a joint account and a spreadsheet which shows what we each owe towards household bills. (I earn more say I pay a little more rent, but then my boyfriend buys stuff like BT sport subscriptions so I don't pay for them)

So every payday, we pay in £x towards bills and it's just handled for the month. I check it every week and tick off what's gone out and double check to see if there are any bills higher or lower than expected, but generally it's OK. We also pay a £40 buffer into that account to help with jumps in bills that are unexpected. Occasionally we withdraw part of that buffer if it hasn't been used for a while and use it for something worthwhile like something for the house.

I couldn't imagine going back to how it was before. Looking at my bank balance thinking "I want to buy something, but I might have a bill come out next week, what do I do?". I just couldn't do it.

Our groceries account works in much the same way. We buy our groceries out of it. We also go to dinner or cinema etc and we pay it from there.

This month I was able to put £1000 away into savings account which I then used to pay off a whole debt in one go. It definitely works.