Why is spending money so easy......

Snwps

Logged on this morning to MSE credit club/Clear Score and was offered a 0% balance transfer card, was pre-approved and managed to get it and do a balance transfer for £5100 from a interest bearing card to 0% for 26 months. I've not been offered any balance transfer deals for a while so its clear that the debt figure coming down is starting to have an impact on the credit worthyness (not that I want any more). But by doing this balance transfer it means we're saving £84 per month in interest just on this one card. I plan on putting the DD on the new card to what it was on the old card (£135) effectively overpaying by the £84 per month. 26 months at 0% is plenty as should be debt free within 12-18 months. As much as I'm hating the idea of another card I'm releaved to be saving on the interest. The old card is inactive and never been used and is locked away so no worry about spending on it. 

WinterWarrior

Inspiring thread Snwps, you have done so well in such a short amount of time. 

Snwps

Had a NSD today, not that I count these often. It was hard to cook tea in this heat and I was close to saying sod it lets have a take away but the chicken I had in the fridge needed using otherwise it would go to waste plus I didnt want to waste money on an unnessessary take away. The 'old' me would have said sod it to the wasted food and spends and had one just because I couldnt be bothered to cook. To be honest, I'm sick of spending money on a take away and not enjoying it. So I'm pleased with myself.

I need to go shopping tomorrow and do a food shop. I've cancelled this weeks food delivery with MrT. I have a budget of £77.13 this week so aiming to spend max £70 and leave rest for bread and milk top ups.

Its Payday tomorrow and me being the eager beaver I've already updated the YNAB budget to top up my pots. Its showing a big red banner at the moment as I've overbudgeted but tomorrow morning it will all be good to go. 

EF now set up and 2 nights worth of drops saved to the amount of £22. I know this will take a while to get somewhere but its the only thing I can think of that wont disrupt the debt busting momentum but build the EF gradually.

Watching Benidorm at the moment on Netflix and between that and this lovely hot weather is making me think of holidays.

MidsHollie

Hey @Snwps, you are doing so well! Your journey is really inspirational. It goes to show that buckling down, working hard and making some sacrifices now will pay off in the long run. 

I saw your post a few days ago about annual Payments / savings. I think this has been one of the biggest things for me in terms of having success in my debt busting. I have a separate account for annual or irregular spends, so car maintainence, insurances, annual services eg the boiler, clothes, gifts etc. I don’t see the money in here as savings. Essentially it is already allocated, I just haven’t made the payment yet. I saw advice from someone else on here saying that you should work out what you have spent this year on these spends, add 10% for cost increases, then divide by 12  to get the monthly cost. I currently put in £210 per month, although my budget suggests I should put in £280 per month. When I look at it like that, normally that would be £280 a month that I frivolously spend without a care in the world, and then when it’s insurance time, I pay by credit card. I can not tell you how good it feels when you pay for something with this money. I actually think it’s a better feeling than paying off a debt! I also love the feeling of ‘oh crap, it’s So and So’s birthday, I need to get them a gift and I only have this much to spend for the rest of the month’...... and then the realisation of ‘oh hang on, I budget for that now’! Try it, it is life changing!! 

Snwps

Thanks @MidsHollie, this is what I've been thinking about and my monthly total sits at around £220-£250 and that includes Christmas but dont include the EF. I plan on building up the EF from extra income earned from delivery drops as it's not something I can forcast/plan in terms of debt busting. I just dont know if I have the disapline to save that £220 per month and not touch it until it's needed. This is why I've been so focused on clearing debt as once its paid off a card it's gone. Savings are a different matter which I need to learn to deal with. 

MidsHollie

I would really recommend it. Maybe in an account that is with a bank that you have no other accounts with, so you never actually see the “savings”. 

Two things will help you break the debt cycle; an emergency fund, and planning all expenses. With these two things, you will never (or only rarely) need to rely on a credit card. Without them, as soon as a big unbudgeted and unplanned expense comes up, you are back in debt. 

I’m sorry if this sounds harsh, but I really think you need to get a handle on the discipline aspect of not touching money that you have as surely this is the only way of maintaining a debt free life in the long term? 

Have you heard of Dave Ramsey? If you ignore the preachy stuff if that’s not your thing, I think he talks a lot of sense about the behaviour side of money, budgeting and spending. He has helped a lot of people have the kick up the bum to really up their game to the next level on their debt free journey

Snwps

MidsHollie said:

I would really recommend it. Maybe in an account that is with a bank that you have no other accounts with, so you never actually see the “savings”. 

Two things will help you break the debt cycle; an emergency fund, and planning all expenses. With these two things, you will never (or only rarely) need to rely on a credit card. Without them, as soon as a big unbudgeted and unplanned expense comes up, you are back in debt. 

I’m sorry if this sounds harsh, but I really think you need to get a handle on the discipline aspect of not touching money that you have as surely this is the only way of maintaining a debt free life in the long term? 

Have you heard of Dave Ramsey? If you ignore the preachy stuff if that’s not your thing, I think he talks a lot of sense about the behaviour side of money, budgeting and spending. He has helped a lot of people have the kick up the bum to really up their game to the next level on their debt free journey

I dont think you're being harsh, I completely agree with you and I'm working on it. It just dont feel right at the moment having money sat in the bank with the amount of debt we have but I agree there needs to be a healthy balance. The more the debt figure comes down the easier I think this will become. Its not a case that we're spending uncontrollably and thats why we dont have any savings, its just since starting this journey every spare pound we have is going off the debt. I think part of me is worried that we need to clear the debt as quick as we can whilst we're both working 2 jobs each and income is a lot more than normal and I dont want to get complacent and get used to this level of income as we've both agreed that the working 2 jobs each is only a temporary thing, working this number of hours a week isnt healthy but at the moment it's working. 

Snwps

Payday today so YNAB double checked and overpayments made to cards. Debt now stands at £27,146.21, this is £10,347.04 off the original debt figure of £37,493.25 (27.6%). There are another 3 DD's to be paid before end of the month so will get into the £26k's, yey!

Im off to update my signature

enthusiasticsaver

You are doing well in getting the debt down and it will be awesome to get into the £26ks.  

The balance transfer will come in handy for saving interest so long as it does not make you complacent in clearing the debt.  Some people think if they are not paying interest there is no rush to clear the debt but you take a chance then that you can get another deal when it expires and then you have to pay another balance transfer fee or if you cannot get a deal the minimum payment increases significantly.  Hopefully this will not happen to you although I agree that you both working 2 jobs is not sustainable long term. 

The point of saving for annual bills and emergencies is first of all that paying annually for things like insurances saves you a lot of money and secondly if you have an unexpected emergency bill you are  not tempted to use credit.  Nothing more disheartening than paying down the credit cards then seeing them go back up again because you don't have savings to cover an essential bill. 

I agree that Dave Ramsey is worth a look at on youtube. He focuses on spending behaviour and gives reality checks to people who are a bit head in the sand when it comes to debt so can keep people on track with getting rid of it. 

Snwps

Its been a good weekend, money saving wise. Only spent money on stuff/food at work for DH on Saturday, nothing spent on Sunday. DH needs fuel today and we need milk. All budgeted for. 

I made another £30 in work Saturday & Sunday which I've added to the EF. Now sits at £52.00. Hoping for another £10 tonight. 

I've been playing with my SOA to see about budgeting for annual bills better. Does this sound reasonable to you?
Name / Monthly / Annual Total

Car Maintenance ANNUAL	£37.50		£450.00
Car Tax/Insurance ANNUAL	£60.00		£720.00
Home Insurance ANNUAL	£20.00		£240.00
Clothing ANNUAL	£33.33		£400.00
Birthdays ANNUAL	£20.83		£250.00
Haircuts ANNUAL	£12.50		£150.00
Christmas ANNUAL	£100.00		£1,200.00

Do these figures sound reasonable? Have I missed anything out thats important. I know a few will think Christmas is OTT but this is about average we spend and includes food and drink etc, we've spent more in the past!

As explained in my previous post my EF is being saved separately from cash earned for fuel on job #2. It will be slow but I will get there. Aiming for £500 first then when I get that will up it to £1000. 

Looking forward to coming on tomorrow to do my end of month round up. 2 DD's due tomorrow and will definately get the debt figure into the £26ks.