Putting a stop to this now

Newstartforusnow

Excellent advice.

I’m very keen on the idea of all these different pots for things and did the maths to some extend a short while back but ended up in the situation where if I was saving everything needed for the pots there wouldn’t be much left if any at all for debt repayments. I’m keen to one day be at the stage where money for holiday spends, car insurance, Christmas etc is all just sitting there in a pot but at the moment I feel I don’t want to sacrifice trying to pay off this debt to get there. Do you think that’s sensible?

Just now I want to just try and stick to budget as much as humanly possible with small extra payments to credit card as well as the bare minimum payment to get it paid off in 0% period and maybe if I can save £100 a month as well as that I’ll consider that a win.

Newstartforusnow

Credit card balance now £4439.37

Have done the maths and if we stick to budget for the remaining 2 weeks if the month then we should only need £30 from my salary to go towards bills this month which is a huge improvement from last month.

I need to pay for my daughters school meals though as she is sitting with a negative balance so will probably end up being more like £60. Still very good.

Newstartforusnow

At the start of the year we did quite well in saving £20 a week for Christmas in one of these tins you need a can opener for. We then just kept forgetting to do it so I didn’t think there would be much in it. There was over £450 so have paid that into the bank and will divide that between my two children for the remainder of their gifts - their main present is already sorted. So one payday left before Christmas and will buy for parents out of that and Xmas food shop too. I’m actually quite glad I have a small family at times!!

Newstartforusnow

New budget day today for us £10 short as we had to put an extra £10 in the car because we were away last weekend and used more fuel than normal. Pay day for me next Friday and this will be the first month we’ve not had to take hundreds out of my salary to make up money we’d overspent during the month. I even have some returns to do which will make up the £60 we have overspent this month. Huge progress.

Still noting down every spend in my spreadsheet which isn’t easy on an iPad!

£4.97 paid to credit card this morning from Monzo round ups.

Lots of Christmas shopping done! I definitely will have the majority of it done by the end of November then if I’m feeling really smug I might get it all wrapped first week in December!

Newstartforusnow

Credit card now £4434.40.

Having a quiet Saturday with my children. Spent £3 in the Co-op on a few bits for lunch.

Made a nice £20 selling some of the kids old toys but the only way I could get them to agree to it was to tell them we could use the money for the trampoline park tomorrow. Will make sure we go nice and early and probably just have lunch when we go home.

Newstartforusnow

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.................... 1

Monthly Income Details
Monthly income after tax................ 1190
Partners monthly income after tax....... 2160
Benefits................................ 148
Other income............................ 0
Total monthly income.................... 3498

Monthly Expense Details
Mortgage................................ 500
Secured/HP loan repayments.............. 341.29999999999995
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 134
Electricity............................. 43
Gas..................................... 50
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 37
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 28
Groceries etc. ......................... 303
Clothing................................ 0
Petrol/diesel........................... 173
Road tax................................ 0
Car Insurance........................... 34
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 60
Other child related expenses............ 80
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 13
Buildings insurance..................... 5
Contents insurance...................... 5.9
Life assurance ......................... 7.49
Other insurance......................... 21.88
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1849.57


Assets
Cash.................................... 1138
House value (Gross)..................... 65000
Shares and bonds........................ 0
Car(s).................................. 6000
Other assets............................ 0
Total Assets............................ 72138


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 37379.7..(500)......4.24
Hire Purchase (HP) debt ...... 3205.28..(341.3)....8.5
Total secured & HP debts...... 40584.98..-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit card ...................4434.4....105.......0
Total unsecured debts..........4434.4....105.......-


Monthly Budget Summary
Total monthly income.................... 3,498
Expenses (including HP & secured debts). 1,849.57
Available for debt repayments........... 1,648.43
Monthly UNsecured debt repayments....... 105
Amount left after debt repayments....... 1,543.43

Personal Balance Sheet Summary
Total assets (things you own)........... 72,138
Total HP & Secured debt................. -40,584.98
Total Unsecured debt.................... -4,434.4
Net Assets.............................. 27,118.62

Created using the SOA calculator at https://www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.

Feeling very smug I’ve managed to a SOA finally! As you’ll see there are lots eg haircuts and entertainment that I’ve not put anything for and I’ve done that because generally we don’t account for these or have any plan for them. Obviously I want to change that ASAP.

Looking at our income, expenditure and debt does anyone have an advice on how much I should be putting away per month for an emergency fund? What even counts as an emergency? One thing to note is we may remortgage in the new year here or move home so there’s a possible mortgage application to consider.

enthusiasticsaver

I have posted a lot on your other thread but one thing I did not suggest which should be helpful is going cold turkey on the credit card while you are trying to put a budget in place. Nothing throws budgets out like credit cards. Is the card 0% on new spending too?

A starter emergency fund is usually £1k so you already have that. Once the debt is gone then 3 to 6 months essential spending so if you just take your basic mortgage (not with the overpayment), council tax and utilities and multiply by 3 or 6 that is a good start. An emergency is an essential repair to car/house or replacing broken washing machine or some other essential item. Redundancy is also an emergency which is why 3-6 months essential outgoings are needed. That can wait until debt is gone though or you could save it and just pay off the 0% card when the deal expires.

enthusiasticsaver

Newstartforusnow wrote: »

Excellent advice.

I’m very keen on the idea of all these different pots for things and did the maths to some extend a short while back but ended up in the situation where if I was saving everything needed for the pots there wouldn’t be much left if any at all for debt repayments. I’m keen to one day be at the stage where money for holiday spends, car insurance, Christmas etc is all just sitting there in a pot but at the moment I feel I don’t want to sacrifice trying to pay off this debt to get there. Do you think that’s sensible? I think you can do both. Make a dent in the debt but also start saving which is essential with budgeting

Just now I want to just try and stick to budget as much as humanly possible with small extra payments to credit card as well as the bare minimum payment to get it paid off in 0% period and maybe if I can save £100 a month as well as that I’ll consider that a win.

That is a good start. You can essentially cashflow it initially which if you have a background in analysing statements should be quite easy even with your OH being paid weekly.

You are already doing that to an extent with moving £180 over to Monzo for food and fuel although that works out more than stated on your soa. On a 4 week month you would have £720 in Monzo to cover which is way more than you state below. No problem (you have a surplus) but that is part of your surplus accounted for unless you spend more than £303 on food and £173 on petrol? Do you use the Monzo for anything else?

enthusiasticsaver

One last post for tonight on a suggestion for moving forward.

I would leave your current cash savings of £1138 as your emergency fund. You can continue to adding to it if you have spare money or divide spare money between that and your credit card.

You are setting your credit card direct debit to £230 which should just about clear it before the 0% ends. This only works if you do not add to the balance though so I suggest you and your OH stop using it. It is never a good idea to spend on a BT card anyway as sometimes new spending is not at 0% so you may find interest creeping on. As suggested above if you have spare money you could pay that off the card or put it in savings but at least you will know the card will be gone in 19 months at the latest.

I suggest initially you just start one savings account and use it for holidays, gifts and car maintenance in the interests of keeping it simple. Some savings accounts let you have separate pots in them or you could do as I do and record it on a separate spreadsheet. I don't like having lots of different savings accounts so the spreadsheet does the job of separating it out. If you know roughly how many people you need to buy for birthdays and Christmas and how much you normally spend it is easy enough to work out how much to put aside monthly. (Just divide annual amount by 12). Car maintenance - initially I would put £25-£50 per month aside depending on how old or reliable it is. You could also add an amount for car insurance so the money is waiting there for next year. Holidays/Weekends away as I said earlier see what is planned for the next year so far and decide on how much you will spend then divide by 12 again. There will be anomalies in the first year as obviously you will be dipping into the account through the year depending on when insurance is due or if you have a birthday heavy month. I suggested £250 a month to cover all but obviously I just picked that figure out of fresh air. You can tailor it to suit you.

You could also open a separate moving house account and put something aside initially £50 a month for legal/moving costs and as the debt goes that £230 could go in there?

These are only suggestions and may not work for you but it would get you in the habit of saving for stuff and maybe give a bit of order to your finances so you are not struggling payday to payday.

EssexHebridean

Newstartforusnow wrote: »

Credit card now £4434.40.

Having a quiet Saturday with my children. Spent £3 in the Co-op on a few bits for lunch.

Made a nice £20 selling some of the kids old toys but the only way I could get them to agree to it was to tell them we could use the money for the trampoline park tomorrow. Will make sure we go nice and early and probably just have lunch when we go home.

A trick for you for next time. Start by identifying the things you have spotted they no longer play with. Gather those up, one at a time so they don't get noticed, and pop them out of sight. In a couple of weeks or months, if they've not been asked for in the interim period, I would suggest that they could most likely quietly leave the house without further fuss? Failing that, the answer to what happens to any money made by selling them is that it goes towards their future Christmas/birthday presents and when they buy their stuff themselves, using their own money, they get to make the call on where proceeds of sales go!

Are you starting your Christmas savings pot again from now to fund next year's spending, if all your 2019 spends are accounted for? If you budgeted for £50 a month now ready for next christmas - and you could even set an automated transfer over to remove that from the current account and put it into a separate pot so you didn't forget to do it?

Similarly, now is the time t plan ahead for the next few months and make sure that you are budgeting for any planned activities like that weekend away recently. It's a great feeling to head off on holiday knowing that you have saved up to cover what it will cost!

Remember - it's all well and good throwing everything at the debt now, but if that means you have cut the corners on budgeting for all the "other stuff" - be that the nice stuff like christmas presents, holidays and entertainment, or the essentials like car insurance - then you will end up taking further credit and that just scuppers all the hard work you have put into paying down the debt. This is where budgeting properly helps.