Catching this cycle early(ish)

EssexHebridean

ramblehan wrote: »

Hi,
Everyone else has made lots of useful comments. The only thing I wanted to chip in will actually cost you money - but it might help you budget so hence the reason I'm suggesting. There's an internet and app based tool called YNAB - You need a budget.com - it has a really easy to use budgeting interface. There's a whole methodology to it, with loads of free training to get you up to speed. For me it really helped me deal with my DH's unstable income as you can clearly see what you need to pay out for and when, and then what's left to meet more flecible spends like groceries. It helps you save up too.
Good luck - now you are here, keep coming back and stay focused and you will get this sorted in no time.

Perhaps you might want to start a diary to keep you motivated (or at least read some) - It really helps me stay focussed.

Good luck!

While YNAB can be really useful for some people I'd respectfully suggest that before using software/an app to look after the finances you first need to understand how to look after them yourself - and at the moment the OP and his OH quite clearly don't know where to start. I'd suggest that they work things out using good old fashioned spreadsheets (or even older fashioned pen & paper) and really learn the ins and outs of their finances for at least 6 months before even thinking about using anything automated to do the hard work.

Danny - not sure which mobile network you're with but I'm currently paying £12 a month with EE for unlimited calls & texts, 4gb superfast data and European calls & texts. That is a SIM only deal and might be of use to you if you're haggling with your current provider. If you are already with EE try seeing what deals Plusnet are offering currently and use those to trade-off against. (Plusnet piggyback off the EE network so a threat to move to them carries more weight than comparing with a different network in some areas).

One thing - you've made several references to your wife's spending habits.Clearly you feel some resentment over her spending/use of power etc. Can I suggest that at some stage over the weekend when the small people are safely tucked up in bed you sit down with her, with an accurate SOA and the total debt figure, and you tell her exactly how things are. Tell her about the overdraft - and that you've just learned that the bank could cal that in at any time and with no notice at all. Tell her that's really scared you, and ask her what she reckons she could do to help tackle the problem. You two are a team, and you need to start working as a team if you're going to sort this. You'll do it far more effectively with her on side and in full understanding, too. (And before you do it, put a jumper on, turn the thermostat down, and turn off every unused light in the house!)

danny1990

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 2100
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 60
Total monthly income.................... 2160

Monthly Expense Details
Mortgage................................ 564.7 - 5 year agreement from enquiring (July 2016) released August 2016. I didn't go for two years due to the nearing of Brexit.
Secured/HP loan repayments.............. 299.6
Council tax............................. 118 - Need to check whether I'm paying 12 monthly or 10 monthly.
Electricity............................. 80 - Soon to be contacting EDF to be removed from a 'top up' meter.
Gas..................................... 80 - ^^
Water rates............................. 40.42 - Metered results in a lot higher for my household.
Mobile phone............................ 29.91 - Lowered from 39.90 due to subscription to Spotify.
TV Licence.............................. 12 - Paid quarterly.
Satellite/Cable TV...................... 43.49 - Investigating and likely haggling or cancelling.
Internet Services....................... 47.99 - haggling to do soon.
Groceries etc. ......................... 280 - Four weekly, Wages are PCM.
Clothing................................ 20
Petrol/diesel........................... 160
Road tax................................ 30 - Averaged from Annual Payment.
Car Insurance........................... 144.66 - Statistically ruined by age. - Also Averaged for one car.
Car maintenance (including MOT)......... 50 - Also accounts for a set of tires bi-annually.
Buildings insurance..................... 17.74 - With AA
Contents insurance...................... 13.5 - With AA
Life assurance ......................... 90.9 - 2 year starter agreement from August 2016
Presents (birthday, christmas etc)...... 125 - In the process of negotiating.
Haircuts................................ 20
Google Business Account + Email......... 3.3 - In the process of cancelling.
Partner's phone - Pay&Go................ 20
Photoshop Subscription.................. 9.99 - In the process of cancelling.
E-Cig Fluid + maintenance............... 50
Children's Football..................... 40
Total monthly expenses.................. 2391.2


Assets
Cash.................................... 340
House value (Gross)..................... 107000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 122340


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98000....(564.7)....5
Hire Purchase (HP) debt ...... 11405.6..(299.6)....2
Total secured & HP debts...... 109405.6..-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2771.78...63.03.....0
Over Draft.....................5844.89...0.........0
Total unsecured debts..........8616.67...63.03.....-


Monthly Budget Summary
Total monthly income.................... 2,160
Expenses (including HP & secured debts). 2,391.2
Available for debt repayments........... -231.2
Monthly UNsecured debt repayments....... 63.03
Amount short for making debt repayments. -294.23

Personal Balance Sheet Summary
Total assets (things you own)........... 122,340
Total HP & Secured debt................. -109,405.6
Total Unsecured debt.................... -8,616.67
Net Assets.............................. 4,317.73

Okay, I've sat and written this hopefully as accurately as I can. I understand a lot of the comments made so far still apply. I haven't bothered to include the boom months as I should consider these irrelevant.

It's quite interesting to see how I've fallen into the position I am in once going through everything on the SOA. When picking up £2,100 I was spending as though I had to hand out £1,600.

What really aches me is that I spend a lot of time away and as the money doesn't secure any assets or even pay for a holiday it feels like my time away is wasted - I'm hoping this can motivate me to be more adult with my finances.

Last year around August I had a paid off credit card and nearly £10,000 in the bank from working away since February. Within a few months I was the polar opposite.

One thing - you've made several references to your wife's spending habits.Clearly you feel some resentment over her spending/use of power etc. Can I suggest that at some stage over the weekend when the small people are safely tucked up in bed you sit down with her, with an accurate SOA and the total debt figure, and you tell her exactly how things are. Tell her about the overdraft - and that you've just learned that the bank could cal that in at any time and with no notice at all. Tell her that's really scared you, and ask her what she reckons she could do to help tackle the problem. You two are a team, and you need to start working as a team if you're going to sort this. You'll do it far more effectively with her on side and in full understanding, too. (And before you do it, put a jumper on, turn the thermostat down, and turn off every unused light in the house!)

Unfortunately I am currently away and the next weekend home I will be able to have this conversation. I have been speaking on the phone about this as well as prior to posting here after introducing the weekly budget for her. Even though £120 per week still feels excessive. However, I will show her the SOA once I'm home for that weekend and attempt to get her on the same page. I'm hoping she manages to land this job as it will be an immediate remedy for the lower months.

Trying to budget with a wage that varies that much can't be easy, so I personally would smooth it out. Get your wage paid into one account and then transfer your spending for the month (based on your lower earning months!) to another account and your annual spends such as insurance to a third. In high earning months you will have cash left for savings or debt repayment, but it won't be muddled up with your spending money.

This is the first thing I've tackled. The account that my wages are added to and are taken from is now inaccessible from a card. ( yes, I've cut up the card ). And now, I transfer myself a weekly budget to my other account. I've noticed a lot more 'checking of the balance' when going to the supermarket to get some food in. Which I feel is an improvement from the unlimited money I felt before.

My monthly debits are also all over the place. I used to be paid on the last Friday of the month. So all my debits were set for the 1st. However, we were swapped to the 9th of the month which unfortunately means all the money sits there all month. However, my car is due on the 15th with my phone, my mortgage on the 12th.. It's really a pain to keep track of so I should add remedying this to my 'to-do' list.

Hi,
Everyone else has made lots of useful comments. The only thing I wanted to chip in will actually cost you money - but it might help you budget so hence the reason I'm suggesting. There's an internet and app based tool called YNAB - You need a budget.com - it has a really easy to use budgeting interface. There's a whole methodology to it, with loads of free training to get you up to speed. For me it really helped me deal with my DH's unstable income as you can clearly see what you need to pay out for and when, and then what's left to meet more flecible spends like groceries. It helps you save up too.
Good luck - now you are here, keep coming back and stay focused and you will get this sorted in no time.

Perhaps you might want to start a diary to keep you motivated (or at least read some) - It really helps me stay focussed.

Good luck!

I checked out the App. However, I deleted it once it said I had to pay ( although a month free ) I didn't want to forget about the subscription. I feel if I wait a few months and make sure I'm hot on the heels of my finances perhaps I could take on an app such as this. However, for now I think I really need to start learning - Fast.

Again thank you all so much for the responses. I duly appreciate the help.

Drawingaline

It sounds like you have every thing in hand. I also use YNAB, but after years of trying all sorts of different budgeting ideas! It has turned out finances around, but like anything it is a tool and you need to be totally committed to use it. One area it may help you with is that both you and your partner would have access to the app so can work together to see what is available in what category.

However I also think you do need to get things set up yourself first. YNAB isn't for everyone, and others find using a spreadsheet is as useful for them.

I will just say that there is one free month, but if you require longer to get to grips with it then if you email them they often extend the trial. And you can access free YouTube videos showing how it works which give you an idea as it is a mindset shift.

However you go about tackling this good luck, you are off to a good start.

Lonire

Hi Danny, Welcome to the boards and great to see you are getting some great advice. Personally, when I prioritised my debt, I was lucky enough to be able to balance transfer my cards to zero percent interest. Set up direct debit for the minimum and then set about tackling my overdraft first. Once this was tackled I now tackle the card debt overpaying on the ones with the shortest period of interest free. In the knowledge that the minimum payment direct debit will be ensuring I don't lose the interest free by missing a payment.
Good luck!

My tip is

EssexHebridean

Lonire wrote: »

Hi Danny, Welcome to the boards and great to see you are getting some great advice. Personally, when I prioritised my debt, I was lucky enough to be able to balance transfer my cards to zero percent interest. Set up direct debit for the minimum and then set about tackling my overdraft first. Once this was tackled I now tackle the card debt overpaying on the ones with the shortest period of interest free. In the knowledge that the minimum payment direct debit will be ensuring I don't lose the interest free by missing a payment.
Good luck!

My tip is

Quick thought for you rather than the OP on the CC minimum payments. So long as you're not using the cards - which I presume you're not - then if you set the DD's slightly above their current level - so a minimum of £25.76 round up to £26 for example - you get more benefit from the payments as time goes on, and less risk that the extra money left over as the minimum payment falls just gets frittered. NEVER use this method on a card you might use though for obvious reasons!