23, IVA & just learning to budget

anna_1977

TV of £40.00 is A LOT - get rid of that too

Well done on facing up to the debt. Are you really only spending £80 per month on food AND that includes the £17 cat food so £63 for you, toiletries, washing stuff etc? Seems low

angelpye

Hi, well done for making a great start. I guess it would help if you filled in the SOA to include your fun money, haircuts, presents etc. So can see in total all in one place what you are spending. From the sounds of it you are no longer overspending due to giving up smoking and socialising less? It helps to know exactly where the excess spending was to prevent it happening again.

With regards to car maintenance, its best to work out how much on average you spend in a year to keep it on the road i.e. tyres, MOT, service(?), windscreen wipers then add a little buffer. Divide this by 12 and transfer that into a savings account so its there when you need it.

An emergency fund is always a good idea so no temptation for CC should you need to replace the washing machine or something.

Its a good idea to have contents insurance - you can this pretty cheap. Replacing your belongings should there be a fire or break in would cost a small fortune when you add up what you own.

I see nothing in for Dentist etc?

You sound pretty organised so keep a list of money saving things to explore like the pet insurance and energy suppliers and work through when you can.

Once the CC is paid its worth setting yourself a target to save for...is it that payment for the IVA lump sum, a holiday, a bigger emergency fund, a mortgage deposit?

As you said its a lot to take in but once you have a budget that is realistic and you accept it as just part of living in your own place, running a car etc it will get easier. When we run up debt we are often living a higher lifestyle than we can afford and it takes a little getting used to the change, plus we have to pay for what we have already had...a quote floating around at the moment is 'debt is just borrowing from your future self' and that really resonates with me at the moment.

Having financial aims small or big will help it feel worth it. When I am debt free I plan to build an emergency fund of three months expenditure (what I call my grown up aim as already have a mortgage) and a travel fund (adventure and experiences are a big priority to me). Keeping these things in mind is really helping me through a couple of really tough months.

You have caught what you have been doing at an early age, not wanting to sound patronising, if anything a little envy as I was not like that in my early 20's. You have got this!

HTH

zippygeorgeandben

Totally agree with angelpye here. You're so young and you have so much time to sort it out and you're finally facing up to your responsibilities. Your mum would be proud of you for tackling this. You don't want to be posting the same thing in 10/15/20 years time wanting help and support so let's sort it out now!

Rocketlolasaves

Thank you for all your help. I think I'm going to sit tonight and realistically use the SOA. If I had the ability to post links right now I could show you my budget book and spending diary which are far more detailed with my spends and budgets. It's quite cool this book too.

Like mentioned before my first month is analysing and cutting back completely then after march evaluating. Then setting budgets and saving wants in place as well as clearing the CC debt. It's just the way my mind works I guess?

As for my mother. She's worse than me when it comes to debt. I grew up with her in debt and she's borrowed from me. Yes she is proud but she encouraged the 10k loan at the time so she isn't exactly the most sensible. However I've lived on my own since I was 19 and I'm responsible for myself so it's my decisions that effect my future now and I don't want to be her age in debt. I'd rather cut back the socialising now and enjoy it more when my bank is healthy.

zippygeorgeandben

Absolutely Rocketlolas and it seems that instead of using your Mum and other factors as to excuses into your spending which many people do (whether valid or not) you are going to sort it out.
You do need to have some 'treat time' though but a bit like dieting, it's all in moderation.

Rocketlolasaves

Hi all just wanted to update that I put in a full and final offer for IVA and had it accepted yesterday. So much can change in a few months. Thank you for all your help x