Disposable Income When Paying Off Debt

TheRoders

Hi All

I haven't posted in a long time and trying to realistically sort my financial situation out currently.

I was just wondering if you allow yourself any kind of disposable income (if at all possible) whilst you are paying off your debts? Just for that cheeky takeaway, pint of milk if you run out unexpectedly etc? Or does every last penny get accounted for every month?

I'm just setting up my spreadsheet to see exactly where our money goes and a big chunk seems to disappear each month which is unaccounted for!

National_Debtline

Hi

It’s generally best to budget for everything, even if that means factoring in takeaways. At least you’ll have a realistic view of where your money is going, and you can tighten your belt in those areas if necessary.

Allowing yourself the odd luxury here and there might help to make the long haul of clearing your debts more bearable, and mean you actually stick to the plan. It’s also a good idea to budget for an emergency fund, for anything unexpected.

If you post your SOA figures here you can ask for more specific opinions on your budgeting.

James
@natdebtline

allthe7s

I have budgetted £50 a month "fun" money so an icecream on a day out or a takeaway etc. I havent spent the full amount yet but I am being very cautious at the min

EssexHebridean

Some people find they can get by throwing everything at the debt, others "need" a bit of slack there for the odd spontaneous spend. A lot depends on your own mindset and how bad your situation is though, in my view. I'm inclined to feel that the healthier, more sustainable approach is probably to account for some "fun money" though.

TheRoders

We are in a fairly fortunate position at the moment. We do have a LOT of debt but all manageable as I've just got a new job.

Income:
Me - £2224
Hubby - £1900

Debts:
Mortgage - £147000 / £638.00 a month
Barclaycard - £4200 / 6% / £65 a month
MBNA - £6250 / 0% / £65 a month

Car PCP - £378 a month
Black Horse - £147 a month
Personal Loan - £157 a month

With everything we pay out, it leaves us with £1200 a month. I have been squirreling away/saving £800 a month to clear our debts on top of what we pay monthly anyway which leaves £400 disposable income but looking through what we spend that on, it really is takeaways and rubbish!!

My only concern is, if I reduce this will I start to resent it and mess everything up!! I was looking to reduce it to £50 a week to give us some breathing space.

indesisiv

I built in take aways, the odd beer, weekends away. Also managed to treat myself when I paid off a card by using the next "payment" I would have made to that card on something I really wanted.
Its a marathon not a sprint ... the plan is to get to the finish in a time that you are happy with. Not trying to hit a time that others are happy with and feeling miserable all the way through.

I couldn't do it without being able to have treats! As such budget for them and then it doesn't set you back when you inevitably fall off the wagon.

zippygeorgeandben

Takeaways are always cheeky!

TheRoders

You are most certainly right!! I think I'm trying to plough too much into the debts and not think about the bigger picture..... It is a marathon not a sprint!

I shall spend some more time on my spreadsheet to make sure it suits our lifestyle....

loken152

I have always budgeted for £20 a week for disposable income and majority of the time i don't use it all as i a bottle wine once a week. Then at the end of the month i £60ish more to put towards the debt. But this month i have spent it each week, like on a take away and i treated the kids to the first McD's for almost 6 months, as National D said it helps with the long haul.

Ebe_Scrooge

To my mind it depends on the severity of the debt, in relation to your income. If, for instance, you're on the point of having your house repossessed, then any luxury is out of the question. For less severe circumstances, then my view is that a takeaway and a bottle of wine once or twice a month is acceptable, and will help to keep you sane.


Obviously, a holiday to the Bahamas would be a no-no, but occasional treats - as long as they're fairly cheap in comparison to what you're trying to achieve - are fine. Maybe even "sensible", inasmuch as you're more likely to stick to your budget if you don't feel like you're constantly living like my Dickens' namesake

EssexHebridean

OK - here's another way of looking at it then. That £400 a month - whatever of it is left at the end of the month you get to pay it off against a debt. That might seem like more of an incentive not to spend, than "I've cut my "fun money" in half!" which yes, might make you feel resentful.

Sounds a bit fluffy, but I always tried to think in terms of what I had, rather than what I was denying myself.