First Steps...another DFW Diary

nabowla

This has to be one of the most difficult things I've done for a long time. But I'm going to be brave and start a new life, right here and now. I'm going to clear my debts and start building a more secure future. I'm not going to give up like I've done in the past. So, here goes. This is day one of my DFW journey.....

I thought it might be useful if I put down a few facts in black-and-white rather than trying to carry them around in my head. If anyone has any bright ideas when they read my comments, please let me know!

Reasons for tackling my debts
1. Logic says that I'll end up in trouble some day if I don't tackle them now.
2. My family would be deeply hurt (emotionally, not financially) by my behaviour.
3. I'd like to settle down within the next two-three years and don't want to start a new life burdened with old debts.

What's My Situation?
1. I'm not behind on any of my payments and am paying more than the minimum amounts on some cards.
2. I have a small overdraft, three credit cards (none are maxxed out) and a small loan.
3. I'm terribly bad at managing money and have never been able to stick to a budget for more than 3-4 weeks at a time.
4. I HATE doing any kind of financial paperwork. I usually set up a spreadsheet/money book and then abandon it a couple of weeks later because I get bored.
5. My credit rating's quite good.
6. I'm really, really good at putting things off. For example, I've got a few things which I could sell on Ebay but which have been gathering dust for the last year or so.

What do I need to do this week?
1. Pull my head out of the sand!!!
2. Use my meagre savings to pay off some of my debts.
3. Use the snowball calculator to work out a reasonable payment plan once I know what I've still got to pay off.
4. Amend direct debits to reflect snowball payments.
5. Contact tax office to fix coding (have been paying emergency tax for 9 months - will I owe them money???)
6. Start to work out a reasonable monthly budget. This is going to be *really* tough.
7. Try to come up with a money management system that I can actually maintain over the next couple of years. I have NO idea how I'm going to do that.......

Any thoughts/advice/comments so far?

slowlyfading

:hello: I think that doing a diary is a great idea - especially as you dont like writing things down on paper - maybe writing it on here will be a good deterent (sp?).
First things first, GET THE THINGS ON EBAY! they could be earning you some extra cash while you sit here and think about it. It wont take you long probably once you actually sit down and do it, so there's no time like the present!
Second, if you feel upto posting a SOA, then there may be some things you can cut back on and therefore make other overpayments. There are a lot of people on here with great advice if you can provide some details. Like, APR's on the credit cards and over draft? Things like that
sf x

Lucy1982_2

They should pay you some money back. I paid it for about 6 months and got back £600.

Which should help, but it depends on what you are paid.

nabowla

Gosh, I thought I'd owe the Tax Office money rather than the other way around. That's promising news. I've just rung them to find out what I have to do to claim a refund: now all I need to do is to dig out my old P45's when I get home this evening. Someone give me a kick up the backside if I don't do it, please! I can just see myself getting home this evening and collapsing in a heap doing nothing.

I've also just rung the gym and cancelled my membership. Sadly this month's payment went out of the bank today (!) but at least I won't be paying for it next month. That's £47 saved straight away. Trouble is that I don't actually know how much I spend overall each month...!

Lucy1982_2

I found it helpful (and scary) to go through the last couple of months bank statements to see where I was spending. You can work out then how much you have been spending and cut it down.

I was lucky and work sorted out all of it for me!

nabowla

One of the things that's really puzzling me is how on earth I get through £300 per month on general 'stuff'. I've got two bank accounts, one for household expenses (rent, electricity, council tax) and one for personal expenses (food, going out, presents etc). I put £300 into my personal expenses account each month and it's normally empty by the middle of the month. Given that I don't have a great social life, I haven't got the foggiest clue where it's all going

I think I'm going to have to look at the last couple of statements with a magnifying glass. But I'm a bit scared about that - I don't have an extravagent lifestyle (no £80 nights out on the town or anything like that) and I don't buy as many clothes as my peers. So I'm really nervous about what I might have to cut out in order to reduce my spending. Life's looking utterly miserable right now.

Mupeteer

Start by writing everything down that you spend. It's really scary but it does give you a kick up the backside about your spending.

I've also started an envelope system this week. I have three envelopes in my bag: one for groceries, one for gifts (getting near to Christmas) and one for miscellaneous spending.

I put a set amount in the envelopes at the beginning of each week and write that amount on the outside. Whenever I spend money I mark down what it was for on the outside and put the change back in the envelope. Once the monet has gone, that's it until the next week. If I'm lucky and there is anything left it's going to the piggy bank at the end of the week. My only exception to this is the gifts envelope. The money in this gets to build up so I can but bigger presents.

This method is really making me think about what I spend and if I really need it. Also, it allows me to budget for these spends.

beanielou

Hope you can meet all your targets for this week.
Best of scottish!

nabowla

Someone pass me a large glass of wine - QUICK!!!I've just set up MS Money and downloaded my bank statements for the last month. It would appear that I withdrew £220 in cash over the past month and........ I've no idea where it all went.

Actually, that's not entirely true. I know that some of it went on meals out, coffees, taxis etc. But £220???? How on earth did that happen???? I'd have guessed £150 tops. I really am going to have to start a spending diary - thanks to the person who pointed me in the direction of the online diary, that might well be the way forward.I've also had a good look at my bills. Most of them can't be lowered (council tax, TV licence, internet & mobile within contract etc). But I think I might be able to lower the following:

Contents insurance: £33 per month
Electricity: £27 per month
Phone calls (landline): used to average £3 - £10 per month, managed to spend £38 last month by accident!
LoveFilm: currently £9.99 per month, have just switched to £3.99 package

What do you think? Can I get these any lower?There's nothing else that can be cut out - no Sky subscriptions, no gym membership (just cancelled that!) or anything like that. The problem really comes down to the way I spend money on my debit cards and in cash. Yuk. Tomorrow I'll tackle the snowball calculator. Tonight I just need to collapse in a heap and recover from the shock.

reesla

Sign up to www.spendingdiary.com - you can add in your daily spends and it will create reports for you daily/weekly or monthly. No need for spreadsheet calculations and seeing the results in a pie chart is shocking!!!

I signed up last week and it really is an eye opener where I spend my dosh! :eek: We are on a strict ecomomy drive & i am watching Martin now on Tonight - I am trying to convince my OH that we can cut down our spending in Tescos!

nabowla

OK. I have another question. Should I do a budget review now or wait a couple of weeks to get a more accurate picture of my spending habits? I can see the advantages to having a budget straight away but I think that one of the reasons why I've gone wrong in the past is that I've totally underestimated my spending in various areas - e.g. taxis, snacks, magazines etc. It seems impossible to draw up a budget when I just don't know what I spend, but I urgently need a budget if I'm going to cut back. It's a bit like the chicken-and-egg situation!