How do I keep track of it all??

anniek42

Hello,
I am after some advice please...I am a sole trader and single parent to teenager and use my normal bank account for all incoming and outgoing payments. I just find it rather confusing as am at the bank nearly every day trying to keep account from going over overdraft of £1750.
I have about 20 direct debits coming out at different times of the month so am looking everyday to balance things. I have been trying for ages to clear overdraft but every time I seem to be making headway some expense comes up!
The other problem is I have about £17k debts over 4 credit cards and catalogue,
I have no savings, no emergency fund, no pension and interest only mortgage.
I am up to date with all payments so am not in debt crisis but can't seem to keep tabs on everything. I have been reading the debt free diaries but just feel like I don't know where to start and at the end of the day because my income is roughly the same (erratic at certain times of year) but never a set amount I am finding it it all too much.
I suffer a bit with anxiety and depression and am finding it hard to keep on top of everything? Any advise please?..:eek:

Pixie5740

You have 3 main options:

1. Budgeting software
2. Spreadsheets
3. Good ol' pen and paper

Personally I used YNAB to track every penny coming in and out of the household but there are others such as EveryDollar, Mint, Wally to name but a few. It's just a case of finding which one works for you. I could create a spreadsheet to track my income and expenditure but I like YNAB.

Ilona

I used to have a small business as a sole trader, and kept very simple books for that, money in and money out. Logged all sales and filed all receipts. My accountant did the tax return. Presumably you do something similar. It's ok to keep the money in the same account as long as you separate it on paper.

You need to keep records for your personal and household income and expenditure in the same way, and as it has been mentioned, you can do it on the computer or write it all down.

As well as keeping track that way, you can also write a personal spending diary. If you have no spare cash to put towards an emergency fund and savings you need to stop spending for a while, or up your income.

Ilona

anniek42

Thanks pixie for replying...do you complete every night your income/outgoings? It just all seems such a mess!

anniek42

Thanks Ilona.. yes I do have my accountant that does it for me as I keep it all separate. I do keep a spending diary I just think I am overwhelmed with it all. I seem to be constantly popping to shops for things as seem incapable of doing a weekly shop either because I am balancing things so finely or just not budgeting properly!

Pixie5740

anniek42 wrote: »

Thanks pixie for replying...do you complete every night your income/outgoings? It just all seems such a mess!

With YNAB I can schedule all my regular payments (mortgage, utilities, etc) to come out weekly, monthly, 4-weekly and then for the non-regular payment I update them daily. I have the YNAB app on my phone so I can update it when I'm out and about. It helped me get a handle on exactly how much I was spending popping into Co-op on the way home or the odd coffee or in the pub on a Friday after work. I'm sure others have had similar success using other apps but as I've never used them I can't attest to how user friendly they are.

Then, usually weekly, I reconcile YNAB with my accounts. I even have an account called "My Purse" and there's something strangely satisfying about YNAB saying my purse out to have £17.36 (for example) in it and there being exactly £17.36 there.

anniek42

I think I will look into YNAB.. I think I tried the free trial but only had my iPad and it wasn't that good then.

Dobbibill

You would benefit from creating a SOA.

If your income is irratic, base it on a worse case scenario.

Also try a few different accounts - business, bills and spending should get you started.

Leave your overdraft account as the bills account and include any charges/interest for the overdraft when calculating your bills and also any amount you are able to pay off it to reduce it each month. Deposit that monthly - bills are able to go out whenever they are due because you've put the money there for them. Having them staggered will be a benefit if you are paid weekly.

datlex

Dobbibill wrote: »

You would benefit from creating a SOA.

If your income is irratic, base it on a worse case scenario.

Also try a few different accounts - business, bills and spending should get you started.

Leave your overdraft account as the bills account and include any charges/interest for the overdraft when calculating your bills and also any amount you are able to pay off it to reduce it each month. Deposit that monthly - bills are able to go out whenever they are due because you've put the money there for them. Having them staggered will be a benefit if you are paid weekly.

Whilst I agree with this person that separate accounts are a good idea, I don't agree with keeping the over draft account as your bills account. Treat the overdraft account as a bill. So you would 3 additional accounts.

FaithFay1992

Hi Annie,

Poor you. That sounds like a lot of stress. I can't speak for what is best in terms of what needs to be paid first due to rates etc. All I know is that overdrafts are the devil!

I was always in mine and when I cleared it I went into the bank and told them to block me from getting one again and they have.

I still have a personal loan that I need to pay off. What I found helped (well probably not in the grand scheme of things!) but to take back control of my finances and gain some confidence I went through my direct debits with a fine toothed comb and was shocked at wjay I found. Gym memberships, things like Experian monthly payments, insurance from when I was renting before I bought my house! It was silly the things I was paying for that i hadn't even realised simply because I was scared to check my internet banking all the time. Is there any DDs at all you can think of you don't need at the moment? sky? Things like that you can do without for a couple of months? If you don't need it to survive then get rid.

OH had an issue not knowing where he stood financially because all of his DDs were all scattered over the month and even with spreadsheets and dates it's still hard to keep track even if you check everyday. What he did is ring as many of them as possible who agreed to change all the dates to the 1st of the months so they come out a day after he gets paid, all of them at once so he knows what money is left in his account really is what is left after all bills.

EssexHebridean

I agree with Dobbibill - your first step needs to be an SOA which will then create the budget for you to work to on a household basis. I used to be a sole trader and also ran everything through my personal bank account - for me that worked but it sounds like it's overwhelming you a bit - can you open a separate basic bank account for the business stuff perhaps to keep it separate? A basic account will not have an overdraft but you shouldn't need that for a business of the size that it sounds as though yours is, anyway, I wouldn't think.

The reason I'll champion going the SOA route rather than YNAB or similar apps is that the process of creating the SOA and then having it there in front of you as a printable list can really help you get to grips with what you're spending, where. And that is the first thing for you - you need to be more aware, and "hands on" with what is happening financially. That document will also tell you what you *should* have as a surplus each month - and from there you can work out a plan to tackle that overdraft.

Once you have a thorough grip of your finances in "real life" - and a budget that works, and that you're sticking to, then try "virtual" applications for keeping track to see if they work for you.

I'd also be inclined to list out all those DD's - first off as suggested above work out if there is anything there that you no longer need, or want. Secondly try to contact the relevant parties and see if you can get them grouped together - so depending on your cashflow maybe one batch on the 2nd, another on the 15th - but obviously however works for you. Far easier to keep track if you know there are only a few days in the month when money should be leaving!