Trying.........

I have been lurking for a while and trying to change my spending habits, but I just have no willpower, i am not even sure what I spend our money on and I know that is awful. My parents were never the best at budgeting and always got credit for things, so I feel in a way (although I don't blame them completely) that I have never been taught how to budget. We are a lot better than we used to be, but many times we have paid off our credit card and promised never to run it up again, but it slowly creeps up and we have got over £2500 back on it again. I can't seem to stay within my monthly budget and I am always making us go overdrawn. My husband never spends any money frivously, so it is me, I am not sure what or where I am going wrong. I am rambling on now.

We are in debt:
Loan £17,000 int rate 7%
Car loan x1 - £4500 - 14.9%
Car loan x2 - £4500 - £7.9%
Credit Card - £2600 - 3.4% till September and then 0% anniversary rate for 6 months (Egg Card)

Income - 2,400 per month

Expenditure -
Food - £250.00
Rent - £350.00
C Tax - £110.00
Utilities - £70.00
Telephone & TV - £60.00
Mobiles x2 (ex deal from Orange) - £30.00
Playschool and Chilminder fees - £110.00
Insurances - £25.00
Misc TV Licence, contact lenses & afterschool clubs etc..(£50.00)

Debts Payments are
Loan - £400.00
Car x1 - £162.00
car x2 - £120.00
Credit Card - about £100 if we earn more I pay more

Total Payments: £1787.00

This leaves about £500.00 a month. Now recently we have had a few extra bills to pay out like Car Tax, Car Ins etc... but what am I doing with the rest of it? We used to earn tons less than this and we managed, why can't I now?? Someone slap me round the face and tell me to sort my life out, lol.

I am sorry I have waffled on and I am sure you will have great advice, tell it to me straight I can handle it, I think i need tough talking. Thanks for listening.
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Comments

  • rchddap1
    rchddap1 Posts: 5,926 Forumite
    Try keeping a spending diary. When you spend anything (even 10p) write it down here and list what it is for. This should enable you to spot where those little extra spends are going.
    Baby Year 1: Oh dear...on the move

    Lily contracted Strep B Meningitis Dec 2006 :eek: Now seemingly a normal little monster. :beer:
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  • Lucie_2
    Lucie_2 Posts: 1,482 Forumite
    First Post First Anniversary Combo Breaker
    I used to open my bank statement, check it wasn't massively overdrawn & that the "money in" & "money out" columns vaguely balanced. That was it. I had no idea what we actually spent our money on.
    Then I started doing a really simple spreadsheet every month with 5 columns:
    Direct Debits - everything that goes out of the account regularly - bills, mortgage etc
    Petrol - every payment to a petrol station
    Food - every payment to a supermarket
    Cash out - all cash machine transactions
    Other things - takeaways, CDs, clothes, vague purchases in Argos that I never recognise, that sort of thing.
    I get all this info from the bank statement - it helps because I pay for nearly everything on my debit card, so the actual shop name comes up on your statement.
    I was shocked at how much there was in the "other things" column & how many £10 & under purchases there were at the supermarket.
    That started in Jan 2004 - my spreadsheet looks a little different now! These days I know how much I spend on what, but I still do the spreadsheet as it keeps me disciplined. It would be very easy to slip back into old ways. Now I get a kick out of seeing how much more there is in the "money in" column than the "money out"! (bit of an MSE affliction that one!)

    It really does help to log EVERYTHING - shock tactics worked for me.
  • Magentasue
    Magentasue Posts: 4,229 Forumite
    What you need is Money! No, not that money, THIS Money. I know it's £20 but you can pick up cheaper versions online or at boot sales, charity shops etc. You might already have it if you have Microsoft Works.

    Then:

    1) Set aside a couple of hours with all of last month's/this month's statements.

    2) Set up all of your accounts. Add another one called Cash and start it with whatever is in your purse.

    3) Go to the budet planner and fill in all of the amounts that apply to you.

    4) Go to the Debt Reduction Planner and enter your debts.

    Then every time you spend money, keep the receipts, if there's no receipt, make a note in the back of a cheque book or something you keep in your bag.

    Every time you get a statement, balance the accounts. Check your budget at the end of every month.

    With this, you will know exactly how much you owe, when it will be paid off, how much you spend and what on. You won't look so well off because you will have to account for everything - including all those things we forget like dental check ups, prescriptions, clothes etc.

    Then you just have to stick to your budget! Oh yes, cut up the plastic, maybe leaving one in a drawer for emergencies if you can trust yourself. Argggggh! Seriously though, you have a lot of debt and if your children are small now, just wait until they're teenagers. Don't keep using credit just because they let you.
  • Thanks for the advice so far guys, you have been great I was little worried about posting and very nearly didn't, I am glad I did now.

    I do have Money (the software ), but as stupid as this sounds, because I normally pick up computer software really quickly, I am baffled by it. I don't whether it is because I am a dab hand at excel and it is so similar yet so different. I will give it another go, I will spend a couple of hours looking at it tonight and with some recent bank statements.

    I am the same with my bank statements Lucie, I never pay much attention to them, I do keep a close eye on my account online, but i don't think about the rate I am spending money at all until i see it entering my overdraft and I know I have got 2 weeks till payday and still have bills to pay and tehn I panic.

    My husband suggested teh other day, that maybe we should change to a cash only account, but I want to be able to apply for a mortgage one day (That is we will ever earn enough to be able to get one big enough to purchase a house) and I am worried that having a cashcard only account will go against us. At the moment although we are thousands in debt the bank say we have an excellant credit rating (mad! I know)

    Thansk for the advice so far, I would still welcome more :)
  • Magentasue
    Magentasue Posts: 4,229 Forumite


    My husband suggested teh other day, that maybe we should change to a cash only account, but I want to be able to apply for a mortgage one day (That is we will ever earn enough to be able to get one big enough to purchase a house) and I am worried that having a cashcard only account will go against us. At the moment although we are thousands in debt the bank say we have an excellant credit rating (mad! I know)

    Thansk for the advice so far, I would still welcome more :)

    Why don't you keep your account open and transfer a set amount into a cash account for household spending. The bills could be paid from your original account by Standing Order or Direct Debit and you could use your cash account to draw a weekly amount.

    And do give Money a go - I used to be like you and now I'm never overdrawn!
  • Rafter
    Rafter Posts: 3,850 Forumite
    First Post First Anniversary Combo Breaker
    You may be one of the 15% of the population who is simply incapable of saving and resisting living it up a bit and worrying about the debt later.

    Some great ideas above but the key is going to be spending less than you earn.

    1st step is probably to cut up the egg card and resist using it online.

    I'd also have a look around the house at stuff you have bought that isn't worth getting into debt for and try to remember that next time you are out shopping.

    Same with kids presents and clothes, would they have been just as happy with a cheaper but well thought out gift or clothes from George at Asda?

    Apart from the 14.9% car loan, your debts don't seem too bad.

    Running 2 cars though is very expensive, which will be where a lot of your money is going.

    Given that you seem to be 'managing' your debt ok, you have to decide whether you want to go on a money diet and get debt free or accept that you will continue to have ~25k of debt costing you nearly £2000 a year to finance in interest payments.

    Money or spreadsheet, doesn't really matter, all that does is:

    Income > Outgoings = happiness

    Outgoings > Income = debt


    Good luck whatever you decide to do.

    R.
    Smile :), it makes people wonder what you have been up to.
  • Lucie_2
    Lucie_2 Posts: 1,482 Forumite
    First Post First Anniversary Combo Breaker
    If you're struggling with budgeting for a full month, break your money down into smaller amounts.
    Eg you earn £2,400 a month & are committed to spending £1787, that leaves you with £613. Break it down a bit further & you have £122 a week (assuming a 5 week month) or £19.77 a day (31 day month) to spend on everything else. If you spend £60 a week on food & £40 on petrol (I'm only estimating figures here) that only leaves £22 for everything else. Overspend this week by £20 (& next week, & the one after that....) and before you know it you're a week behind & out comes the credit card. Think about how quick you can make £22 disappear. I could spend that in my sleep!
    If it's only a 4 week month then you will have an extra £122 to put towards debt repayment.
  • margaretclare
    margaretclare Posts: 10,789 Forumite
    Hi

    I haven't used MS Money - I do use Quicken.

    I was introduced to it by my daughter several years ago when I was anything but 'computer savvy'. Without Quicken (or any form of computer accounting software for personal use) I would NEVER have become solvent. With Quicken I was able to e.g. see that one year I wasted over £700 on 'bounced' direct debits, unpaid cheques, bank charges of one kind or another. So it really is worthwhile persevering with Money, as you've got it. It does take time to enter all your accounts, all your incomings and outgoings etc, but once you do, it's there for you to see and you can't deceive yourself into thinking you've more money than you have!

    Best wishes

    Aunty Margaret
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • Rafter wrote:
    You may be one of the 15% of the population who is simply incapable of saving and resisting living it up a bit and worrying about the debt later.

    Some great ideas above but the key is going to be spending less than you earn.

    1st step is probably to cut up the egg card and resist using it online.

    I'd also have a look around the house at stuff you have bought that isn't worth getting into debt for and try to remember that next time you are out shopping.

    Same with kids presents and clothes, would they have been just as happy with a cheaper but well thought out gift or clothes from George at Asda?

    Apart from the 14.9% car loan, your debts don't seem too bad.

    Running 2 cars though is very expensive, which will be where a lot of your money is going.

    Given that you seem to be 'managing' your debt ok, you have to decide whether you want to go on a money diet and get debt free or accept that you will continue to have ~25k of debt costing you nearly £2000 a year to finance in interest payments.

    Money or spreadsheet, doesn't really matter, all that does is:

    Income > Outgoings = happiness

    Outgoings > Income = debt


    Good luck whatever you decide to do.

    R.

    Thanks for replying to my post :)

    I am careful with money to extent of buying clothes, toys etc.. I always buy the cheapest, e.g. shop at George, Primark etc... and I try to look for good deals. This is where I am a bit confused about where our money is going, but I must be wasting it on something and I will look at my statements later and find out where.

    Thank you for replying I really do appreciate the help and I have made that decision, I do not want to spend my life in debt! Now I just have to put that decision into practice.
  • Lucie wrote:
    If you're struggling with budgeting for a full month, break your money down into smaller amounts.
    Eg you earn £2,400 a month & are committed to spending £1787, that leaves you with £613. Break it down a bit further & you have £122 a week (assuming a 5 week month) or £19.77 a day (31 day month) to spend on everything else. If you spend £60 a week on food & £40 on petrol (I'm only estimating figures here) that only leaves £22 for everything else. Overspend this week by £20 (& next week, & the one after that....) and before you know it you're a week behind & out comes the credit card. Think about how quick you can make £22 disappear. I could spend that in my sleep!
    If it's only a 4 week month then you will have an extra £122 to put towards debt repayment.

    When you put it like that it sounds terrifying i can't believe that i actually waste £122 a week on rubbish. The outgoings incude food, but i forgot about petrol which is about £40 a week, so that still leaves £80.00. I really do have to get a grip on my spending, because that is ridiclous.

    Thanks for your help :)
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