Starting out

nkkingston

The reason people are asking about your spending is because if you don't know how you built up debt, it's next to impossible to get out from under it. It's like digging a hole and throwing the dirt over your shoulder, so it falls straight back into the hole behind you. This is especially true if you can't point to obvious things (job losses, emergency replacements of expensive items etc), because it suggests a lifestyle problem to which there are only two solutions: earn more or spend less.

You haven't listed any interest or fees on the overdrafts. Even arranged overdrafts are rarely interest free these days, so check to see what you're actually paying on those. If your plan is to swap to a repayment mortgage at some point, you'll need to get yourselves into a position where not only have you paid off your current commitments, but you can afford a significantly more expensive mortgage amount (especially since you'll be paying it off over a shorter time period).

I'm echoing CMS on the bank statements thing. It's amazing where some of that money can go without you noticing. A Starbucks on the way to work every day could cost £800 a year, for example (guess who's cut back on those recently!).

Those recipe boxes are good if you're getting used to cooking from scratch, but they do overcharge for the convenience. Keep the recipes you like and once you've got into the swing of it, put your own together by online shopping for the ingredients. Bulk cooking is your friend for money and time saving.

tlc678910

I use (and love) YNAB software and lots of others on here recommend it too. It helps you budget/allocate and track the money that you have and could help if your money planning is getting confusing.
Tlc

cms-help

jameswright2 wrote: »

haha I love the haircut comment ! I get my haircut once a month it costs £15 and my partner gets hers done at a discount of £75 because it is a friends salon, as soon as our child goes to school we will have more money and no more children 1 is plenty he keeps me busy enough, I know we have have OK incomes and yes I think the odd £20 here and there does add up we need to make sure all our money is accounted for and It is not currently. we will sit down this weekend and go over everything thank you for your comments as with all the others this is what I need to get things moving in the right direction.

the house is a whole other story if you look at this you will understand why I am not paying any of it off currently https://forums.moneysavingexpert.com/discussion/5511601 it is a big mess and has been for many years once I have cleared my debt the plan is to save for a deposit and move.

thanks again for all your help

You'll have a little more money when your child turns 3 and you can access 15 free hours of childcare. It's about a day and a half but better than nothing. Sounds like you would still need before and after school childcare so this would still be an expense. And never say never, I was one child and done then we had our second.

Anyway, I posted in another thread in that we're not debt free wannabees as the only debt we have is the mortgage but I don't like wasting money - which my husband is a monkey for. And he is a prime example of the £20 cash withdrawal every 2-3 days. I asked him the other week what he spent all this money on that he withdrew. "Lunches and coffee at work" was the response. He came home with his Mess Bill last Friday and £75 in food charges. I asked what the £75 was for (as he eats at home on an evening). "Lunches" he said. I reminded him he'd said that's what all the cash withdrawals were for. "Oh I don't know what I spend the cash on then!" was the response. So that was £160 for the previous month in cash and £75 in food at work. Just to prove a point I have made him take lunch every day this week from home. He hasn't withdrawn any money this week and he won't have such a high mess bill either. Hasn't cost anything as he's taken leftovers and use-ups that would probably have been thrown otherwise.

In a rather long-winded way, I guess I am saying money is easily spent without you realising it!

jameswright2

yes it is and i am the worst for it, I just need to stop us both spending and get a plan in place to get this debt cleared.

enthusiasticsaver

Good suggestions here and I won't go back over the obvious savings which could be made re groceries, haircuts and cable. With childcare costs so high even with childcare vouchers is it possible for one of you to do a more child orientated job which does not require such early starts? £75 is a horrendous amount to pay for hair. Can she go every 2 months if she won't move to somewhere cheaper? I pay £40 every 8 weeks and could get it cheaper if I needed to.

jameswright2

Hi, we both already have flexibility with work for sickness etc, the early starts are difficult as I have a 30 minute commute and my partner has an hour commute the industry's that we are both in are flexible in terms of an earlier finish which allows us to at least get home and spend some time together, I am going to look over all our spending this weekend and see were we can cut back sometimes its hard to see the wood for the trees.

System

Hi James,
Just me popping back. One thing I would really recommend is looking into YNAB - Youneedabudget.com - it's an online budget tool which also works via an app for iphone / android. It is fantastic for understanding where your money goes, and for also helping you to stick to a budget.

You would be able to do an export of your last 3-6 months spends into it I think and it would then help you understand where you are spending - and whether that is in line with your SOA. Then once you have set your budget you don't look at your bank account, you look at your YNAB to see what you have, so if you have set a budget of XX for entertainment then that's what you can spend....For us instead of looking at the bank account and see a healthy balance, I now see how all that money is allocated to different jobs and what is left to me to use.

The 'slight' downside with YNAB is that after a months free trial, there is an annual subscription fee - however for me the benefits far outweigh the costs.

There's a whole host of web training to do - and I would really recommend that you do it to get a proper understanding of the YNAB method. You can use it in conjunction with a Snowball calculator and can hit your debt / build your EF fund first, and set it up to work the way you want it to help attack things in a motivating and structured way.

If it makes you feel any better, a huge part of our debt is related to house repairs and renovations - we moved into a dump and the mortgage people wouldn't give us any more cash - despite us buying something well under budget! I cooked on a camping stove for 18 months - which was fun. We're now 75% of the way there, and we will sell at some point - the benefit being we have a huge amount of equity in the house so at needs be this will clear the debt (but I am on a mission to sort it first so we can enjoy the profit!)

have you checked out the diary section yet? Some really inspiring stories (not mine!!) I had been a browser of DFW for a few years but never visited this section - and it's amazing, has really helped me stay focussed day to day.

Onwards and upwards!!
Ramble

jameswright2

@ramblehan thank you so much I am looking at it now this is what I need, I have not looked at any diaries yet but I will do for motivation.

System

Cool - feel free to ask questions if YNAB doesn't make sense - there's a YNAB thread on here somewhere - but also YNAB tech support are brill.