Losing momentum as don't enjoy long term planning

ObsessiveOverThinker

Evening all

Same as most first time posters on here, I've been a bit of a long term lurker!

This time last year I had credit card and overdraft debts of just under £12,000, and a loan of £8,000 (ish).

Today I have only credit cards totalling £7,800 and my loan is at £6,000.

I've been leaving the loan with only the normal payments coming out, and been ad hoc paying my credit cards with any extra cash.

This time last year i felt that my financial situation was pretty dire... I visited family in london and went to pay for something when my card declined. When checking my online banking I'd maxed out both overdrafts, had no spare funds and the banks (understandably!) declined to authorise any higher overdraft. My 1,300 a month salary was being sucked dry by bills and minimum payments/overdraft charges.

I got myself into gear, and I was lucky enough to get a second job which helped me massively, also a pay rise at my normal job and shares I can sell tax free every 6 months.

It's a year down the line and yes, I'm pleased that my debts are lower, but I'm disappointed that they aren't better.

I really hate future planning, and when it comes to my finances I find I'll obsess for a few days over sorting it all out (like this weekend.. I've pretty much read every post in the debt free wannabe area!) But then I don't think about finances again for a good few months.. until the obsessive few days happen again.

Does anyone have any suggestions how I can keep on track without becoming obsessive? Is it better to review them daily, weekly or monthly?

Any suggestions would be more than welcome

Willing2Learn

Hi ObsessiveOverThinker and welcome to the forum

I think that for the first couple of months, there needs to be a lot thought put into working out your budget. But once you have a monthly budget figured out, then it is possible to more-or-less automate the whole thing. At the beginning, I found it really helpful to keep a spending diary, so that every little piece of expenditure was tracked. This is because a monthly budget only works if every pound is tracked and has a job to do.

I now use software (YNAB Classic) to keep track of my monthly income and expenses and it requires 5-10 minutes a day to keep it all perfectly up-to-date. Sometimes, when I am feeling lazy, I only update the figures every 7-10 days. I have to keep hold of all my receipts though, so that they can be entered on to the software.

Oh yeah, and well done on making such great progress with reducing your overall level of debt during the last 12 months.

Edit: Just thinking about it...The first budgeting software I used to pull myself out of debt with, was MS Money 2003. It is really simple to use, to set up and to maintain. It is still available for download from Microsoft:
https://www.microsoft.com/en-us/download/details.aspx?id=20738

ObsessiveOverThinker

Thank you for the reply Willing2Learn

I find writing everything down quite therapeutic, so I'm going to try and spend 5-10 minutes before bed noting what I've spent that day.

Hopefully this will help me complete a true SOA and focus on paying off the debt... and stop me spending a long weekend procrastinating about it all

enthusiasticsaver

A spending diary helps keep me on track so that is daily and a monthly allocation of funds as our pensions are paid. I also record our spends in clear checkbook (the free version) and as our accounts are with Santander the Santander wallet app helps to see if we are overspending in one area.

When money was tight I used to allocate money weekly and did not use credit cards. Never had debt thankfully except for mortgage and occasionally interest free on furniture. Never more than one item at a time though.

I think doing a budget and sticking to it is critical. If you allocate a regular amount to your debt, get it on 0% interest and stop using cards it will come down gradually. Saving in emergency funds is also critical.

ObsessiveOverThinker

I've popped £1000 in an emergency fund over the last year, just in case!

I'm also saving for a house deposit. I've got £2,000 which will increase to £4,000 by the end of this month. I've read about using savings to pay off debts, but even if I used this full amount on my credit cards, I would still have debts left with no savings, which I think is pretty de-motivating.. for me anyway!

It's difficult not to use credit cards, as I always use them for online shopping. Not sure if this is still the case, but I was always told that credit cards had more 'protection' than debit cards, like if there's fraud or an issue with the product.

Doing and sticking to a budget is critical though you're right!

ObsessiveOverThinker

I'll have a look and download it now, thanks Willing2Learn :T