Small Steps Out Of Massive Debt!

Naomim

GeorgianaCavendish wrote: »

I'm not totally there yet either, I really need to get to grips with a proper budget!
I see mindful spending as not lying to myself about what I'm spending on and why, so I think you are doing that. Have you tried using OnTrees? I'm finding it really useful to import all my transactions and categorise them, I've already found a couple of things that I had forgotten about, like a couple of takeaways when we were out late on a Sunday and I couldn't be bothered to cook and some dry cleaning for a dress that I really regret buying as it has probably cost me more in cleaning than it did to buy it! So I will either make a takeaway budget or keep an emergency pizza in the freezer, and I think I'm going to purge my wardrobe of dry clean only clothes and put them on ebay!

This is what I worry about with using YNAB. I know what our bills our and what we pay out on a monthly basis. I've started using my savings account again to budget for Christmas etc but it's the unaccounted for spends. A meal out (because I'm too tired to cook) MrM buying cigarettes. They are the things that got us into this mess in the first place and I just don't know how to budget for them.

I also keep emergency pizza & chicken nuggets (fussy 7yo doesn't eat pizza) in the freezer and we have definitely cut down our eating out habits recently.

I've not heard of onTrees so will have a look.

Naomi

ada-or-ardor

Naomi, I'm not sure if you're using YNAB or other budgeting tools but the one I use is manual so I have to log everything I spend myself (rather than it pulling through from my bank automatically. For every spend outside my budget, I tag the spend with #unexpected. At the end of the month, I review that month and see what my total unexpected costs were, and on what. Some of them are totally out of my control but now I know that between Jan and Feb payday, I spent just over £40, totally unplanned and unavoidable really. And that's despite a strong budget with regular reviewing throughout the month. Next month, I wont give every penny a job - I'll try and save as close to £40 as I can manage for those unexpected spends. I wonder whether something similar could work for you. You could also ask OH to start buying fags, for example, in your weekly shop, so at least you can be more prepared for it - then set a rule that if he gets caught short, he needs to fund it from his own kitty or contribute some pennies to the food budget.

Hope that might be helpful!

Ada

Treadingonplaymobil

ada-or-ardor wrote: »

Naomi, I'm not sure if you're using YNAB or other budgeting tools but the one I use is manual so I have to log everything I spend myself (rather than it pulling through from my bank automatically. For every spend outside my budget, I tag the spend with #unexpected. At the end of the month, I review that month and see what my total unexpected costs were, and on what. Some of them are totally out of my control but now I know that between Jan and Feb payday, I spent just over £40, totally unplanned and unavoidable really. And that's despite a strong budget with regular reviewing throughout the month. Next month, I wont give every penny a job - I'll try and save as close to £40 as I can manage for those unexpected spends. I wonder whether something similar could work for you. You could also ask OH to start buying fags, for example, in your weekly shop, so at least you can be more prepared for it - then set a rule that if he gets caught short, he needs to fund it from his own kitty or contribute some pennies to the food budget.

Hope that might be helpful!

Ada

That's a really good idea actually. I can usually assign unexpected spends to an already existing budget category, but we definitely have spends throughout the month that are genuinely unanticipated and unavoidable. I might start entering the payee name into YNAB as 'unexpected - *payee name*'. Thanks for the idea.

Naomim

ada-or-ardor wrote: »

Naomi, I'm not sure if you're using YNAB or other budgeting tools but the one I use is manual so I have to log everything I spend myself (rather than it pulling through from my bank automatically. For every spend outside my budget, I tag the spend with #unexpected. At the end of the month, I review that month and see what my total unexpected costs were, and on what. Some of them are totally out of my control but now I know that between Jan and Feb payday, I spent just over £40, totally unplanned and unavoidable really. And that's despite a strong budget with regular reviewing throughout the month. Next month, I wont give every penny a job - I'll try and save as close to £40 as I can manage for those unexpected spends. I wonder whether something similar could work for you. You could also ask OH to start buying fags, for example, in your weekly shop, so at least you can be more prepared for it - then set a rule that if he gets caught short, he needs to fund it from his own kitty or contribute some pennies to the food budget.

Hope that might be helpful!

Ada

I've been debating about using YNAB and investigating it. I already use a spreadsheet but as most people, I log the spend after it's happened rather than pre-empting it.

I have thought about buying MrM's cigs with the shopping as would certainly be cheaper but 1) I'd have to make a trip to one of the big 4 as I shop at Aldi at the moment and 2) I feel like I'm encouraging him to smoke when I want him to quit. I don't nag him about it as I was a smoker and I know it doesn't help at all and you can only do it when you are ready. It actually took me a year of on and off trying, stopping and starting before I finally succeeded (8 years now :j)

It's certainly food for thought. Thanks

Naomi

gelmc

GeorgianaCavendish wrote: »

I'm seeing a counsellor at the moment, not specifically for overspending but we've been talking about it a lot in the last couple of weeks. I told her about looking through my old bank & credit card statements - some going back years - and seeing these huge 'spending benders' where the spending was out of control. These benders line up with traumatic or very emotional times for me. I felt like I was acting like a grown up now because I didn't go over my limits or get nasty letters from the bank (unlike when I was at university!) but actually I've never addressed my spending habits and specifically how I deal with emotional problems by spending money. )

I can totally relate to this, as I've come to the understanding that my overspending has emotional roots. I've been tempted to pay for hypnotherapy sessions in order to tackle it, but now it seems etched into my brain, somehow, that my constant urge is to splurge. This occurs when I get paid, if I earn extra money (from extra work), if I'm gifted money (it was my birthday earlier this month) or if I get a little windfall (I'm getting a tax rebate of a few hundred pounds this month).

Pay day is on Friday, and I'm getting that familiar excited adrenaline rush feeling in my stomach and wondering what I else can buy. I think that I have a long way to go! I'd love to have the discipline to sit on my hands and not go overboard with the spending, like I seem to do every month. Any tips will be gratefully received.

I'm not totally in the dark about interest rates and APRs, and I do know how to get a good deal by shopping around and writing down terms/working out the cost of a financial product over time. You see, correct me if I'm wrong, I see my spending problem as not fully solvable by writing down how much I spend and by doing budgets, as 1) I find it hard to find the time to record spending as my life is so busy and 2) I see budgets as being mind numbingly boring and restricting, however, on a good day I can glimpse the fact that they lead to increased financial freedom and control. This is what I struggle with.

Please feel free to disagree/persuade me otherwise/call me out, as maybe 1) & 2) are the courses of action I so badly need. :eek:

GeorgianaCavendish

ada-or-ardor wrote: »

I also get an annual bonus and there are two things I always forget:

1) it may be enough to push you into higher rate tax band for the month, and if so, HMRC may assume that's your standard salary and charge you the extra tax that month. You should then get reimbursed in subsequent payments.
2) student loan company take a proportionate amount so a huge chunk will be taken up by payment to them. At least you can count it as automatic debt busting.... It really hurts to see the amount though. I think they alone took £500 off me this time last year, I almost cried!!

So my rule of thumb is "just count on an extra £100 take home and anything else in my paypacket really is a bonus"!!!

If you find a decent calculator that seems accurate please do share - I never seem to be able to find one.

Ada

Oh yes, the Student Loan Company payment - the first time I got a bonus and saw that they'd taken an enormous chunk of it I wanted to cry!

I found this website for salary calculators, I will do a test run on my Feb payslip and see how close they get it, then I'll do the same once I get confirmation of my bonus. The Salary Calculator

GeorgianaCavendish

gelmc wrote: »

I can totally relate to this, as I've come to the understanding that my overspending has emotional roots. I've been tempted to pay for hypnotherapy sessions in order to tackle it, but now it seems etched into my brain, somehow, that my constant urge is to splurge. This occurs when I get paid, if I earn extra money (from extra work), if I'm gifted money (it was my birthday earlier this month) or if I get a little windfall (I'm getting a tax rebate of a few hundred pounds this month).

Pay day is on Friday, and I'm getting that familiar excited adrenaline rush feeling in my stomach and wondering what I else can buy. I think that I have a long way to go! I'd love to have the discipline to sit on my hands and not go overboard with the spending, like I seem to do every month. Any tips will be gratefully received.

I'm not totally in the dark about interest rates and APRs, and I do know how to get a good deal by shopping around and writing down terms/working out the cost of a financial product over time. You see, correct me if I'm wrong, I see my spending problem as not fully solvable by writing down how much I spend and by doing budgets, as 1) I find it hard to find the time to record spending as my life is so busy and 2) I see budgets as being mind numbingly boring and restricting, however, on a good day I can glimpse the fact that they lead to increased financial freedom and control. This is what I struggle with.

Please feel free to disagree/persuade me otherwise/call me out, as maybe 1) & 2) are the courses of action I so badly need. :eek:

I saw a hypnotherapist for a couple of months last year and I did find it really helpful in the end but the process was not what I was expecting and was emotionally draining. That said, I went for PTSD so it might be completely different for overspending. I had been hoping that I'd be able to just go to sleep and she'd reprogram me but instead I had to talk about the trauma first and then was never really "switched off" during the therapy. I guess what I'm trying to say is I'm glad I did it, I do think it really helped me but it was expensive and it wasn't the easy fix I had been hoping for when I signed up.

Back to debt though! The hardest thing for me to address are my spending habits. I've tried consolidating debt, switching to lower interest rates, earning more money (easier said that done!) but it doesn't work because what I really need to do is change how I behave with money. Sometimes when I think about what I've got to do, I get really panicky and anxious because it feels like my main coping strategy is being taken away and I haven't learnt an alternative way to cope yet. Right now I'm monitoring everything because I'm trying to work out what my triggers are so that I can find a different way to deal with them instead of going shopping; and I'm trying to set myself small targets that won't overwhelm me and push me back into my old habits.

I really recommend the OnTrees app (as long as you are comfortable linking up your bank account and credit cards with the app) It tracks your transactions for you and categorises them automatically, so it might show up some areas of spending that you didn't really notice before and where it would be an easy win to change habits. You could even set it up and leave it for a few weeks before checking, then you'd have data to look at without having to actively record everything yourself.

GeorgianaCavendish

I was really hoping that there would be a one stop shop for tracking and budgeting but it looks like I need to keep the two activities separate.

OnTrees is a tracking app/website associated with MoneySupermarket. I've been using it for a month and I really like it. I've linked up my bank accounts and credit cards with the app and it automatically tracks every single spend and sorts them into categories. I'm then able to tweak this (e.g. I've told it to ignore transfers between my accounts because it was double counting my utility direct debits and the standing orders I have from my main account to my household bills one). There is a budgeting section but it isn't as appealing as YNAB.

YNAB, I think that to get started I will manually enter the balance on my personal bank account every day and budget from there. I'm not sure if I will use the app to log spends in real time because that is extra work that is done for me on OnTrees, but I could update it every few days. Maybe when I get more adept I'll be able to track more. I binge watched a whole load of the White Board Wednesdays on YouTube last night, if you are struggling with the YNAB concept I recommend taking an hour to watch some of those.

ada-or-ardor

GeorgianaCavendish wrote: »

Back to debt though! The hardest thing for me to address are my spending habits. I've tried consolidating debt, switching to lower interest rates, earning more money (easier said that done!) but it doesn't work because what I really need to do is change how I behave with money. Sometimes when I think about what I've got to do, I get really panicky and anxious because it feels like my main coping strategy is being taken away and I haven't learnt an alternative way to cope yet. Right now I'm monitoring everything because I'm trying to work out what my triggers are so that I can find a different way to deal with them instead of going shopping; and I'm trying to set myself small targets that won't overwhelm me and push me back into my old habits.

It sounds like you're on a bigger journey than just your debt and I would guess that's another reason you get quite anxious - like you say, your security blanket is being taken away so you must feel vulnerable. You should be really proud of how brave you are being facing up to this (especially in light of your traumatic incident and the ensuing PTSD which I can only imagine are hard enough to deal with on their own without worrying about money).

This is just a little idea that might help replace your safety blanket in a healthy way. Take an empty jar, and on little slips of paper, write down things that make you feel happy and that you find therapeutic. It might be listening to a favourite song on repeat on headphones so you block out the whole world; it might be baking; it might be having a hot bath with some nice bubbles; a walk round a favourite park. Stock that jar to the brim with things that make you happy, calm you down and help you get some perspective. Then, when you have those urges or are feeling down, instead of feeling panicky that you can't go out and spend to soothe yourself you get to open your jar and do a lucky dip! You might even get a little rush, you'll feel rewarded so hopefully a little bit of dopamine, and then you get the chosen treat as well! You could pick a few and choose your favourite (in case you draw out "hot bath" but it's 30 degrees outside and you're just not in the mood.

It can be hard to remember what you enjoy and what makes you happy when you're anxious and you just sit and ruminate because that makes your brain feel happier - temporarily. I know this cycle only too well. It becomes comfortable. But it's not healthy. Having a system like the jar above might just pull you out of that place and remind you you have loads of others things that bring you joy in addition to shopping :-)

Ada

mumto2girlsandaboy

Have just read your diary congratulations on a great start, we've been budgeting for a year now and its really made a difference (we now have money in the bank for the car tax due) but find its an ongoing process and i am constantly learning and making adjustments. I'm not sure it will ever be 'spot on' but it certainly makes the unexpected things easier to deal with and i cant imagine the money we must have wasted in the last 20 years!
Gelmc if you find it difficult to track and record spends do you allocate a set amount you can spend on what you want but once its gone its gone.