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So bad at managing money, please give me some advice.

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So bad at managing money, please give me some advice.

edited 30 November -1 at 1:00AM in Debt-Free Wannabe
19 replies 4.9K views
Danielle1988Danielle1988 Forumite
1 posts
edited 30 November -1 at 1:00AM in Debt-Free Wannabe
So, my situation is not the worst, but it is still causing worry and stress for me.

I am always in my overdraft, by the end of the month I've always reached my 1k limit, so I'm transferring money over from my savings to get by. I have around 4k on a credit card that I'm paying £100 off monthly and I have a no interest deal for around 12 months more.

I have 19k in savings. Now, the obvious here would be to pay off the overdraft, but I don't trust myself that I won't end up in it again and I hate seeing my savings go down. I've been looking at accounts such as Monzo as they seem to get such rave reviews about helping people manage their money, maybe my best option would be to pay my overdraft off next pay day and transfer over to one of these banks?
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  • bouncydog1bouncydog1 Forumite
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    You need to complete a statement of affairs so you can see where your money is going every month, pay off your overdraft and then track every penny on a spreadsheet. There are experts on here who will point you in the right direction, but until you can manage your money and make it work for you, you will keep going round in circles. If you have managed to save£19k then something must have changed- reduced income or higher Living costs/silly spends? If the money is an inheritance then you need to focus on what you want to do with it and try to increase it - house deposit perhaps? You’ve taken the first step and by the end of today you will have hopefully become motivated so that November will be the first m9nth you have lived within your means ��
  • Willing2LearnWilling2Learn Forumite
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    ...And here is the link for the Statement of Affairs (SOA). Please complete the online form. Then click on the 'format for MSE' button (near the bottom of the form) and then copy & paste the whole lot over into this thread. :)

    https://www.lemonfool.co.uk/financecalculators/soa.php

    And welcome to the forum Danielle1988 :)
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • trailingspousetrailingspouse Forumite
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    You need to do both, you really do - you need to use some of your savings to pay off the £4,000 credit card and the £1000 overdraft. You will still have £14,000 in savings left, which is not bad at all.


    And then you also have to get a grip of the spending.


    As bouncydog1 said, your best move is to post an SOA on here, and the Wannabe gurus will help you to see where savings can (must) be made.
  • Lover_of_LycraLover_of_Lycra Forumite
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    So, my situation is not the worst, but it is still causing worry and stress for me.

    I am always in my overdraft, by the end of the month I've always reached my 1k limit, so I'm transferring money over from my savings to get by. I have around 4k on a credit card that I'm paying £100 off monthly and I have a no interest deal for around 12 months more.

    I have 19k in savings. Now, the obvious here would be to pay off the overdraft, but I don't trust myself that I won't end up in it again and I hate seeing my savings go down. I've been looking at accounts such as Monzo as they seem to get such rave reviews about helping people manage their money, maybe my best option would be to pay my overdraft off next pay day and transfer over to one of these banks?

    You're right, the obvious thing to do is to use your savings to pay off the overdraft and the credit card when you get to the end of the 0% offer. Overdrafts can be recalled and if you are thinking of applying for a mortgage in the future it doesn't look good to lenders to be constantly living in your overdraft. £100 a month for 12 months won't see you pay off the £4000 balance but luckily you have the means to rid yourself of this debt when 0% deal ends.

    There is no magic solution you simply need to set a realistic budget and stick to it. To quote Mr Micawber, "Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

    When budgeting you need to look at the whole year and not just the month. This is so that you can be putting money aside for bills and expenses that might only occur quarterly or annually. Christmas seems to blindside a lot of people every year despite the fact that it is always on 25th December. Insurance is usually less expensive to pay annually rather than monthly so a budget that looks at the whole year can help you plan for this.

    There are lots of tools to help you budget. Personally I use YNAB although other budgeting apps are available, some people create their own spreadsheets whilst others prefer using good ol' pen and paper. You just need to find something that works for you.
  • Willing2LearnWilling2Learn Forumite
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    I vote for YNAB. I have been using their software with success since 2012. It helped me to turn me life around (financially), as I was always useless at budgeting before YNAB and was continuously in debt. I now have savings and a six-month emergency buffer fund!!
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • AndyjfletAndyjflet Forumite
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    Budget is the answer, try the envelope method by transferring your remaining income after bills into a monzo account, then with no overdraft facility you have to live on the money available.
    Baby Step 1 - £125 saved for emergency fund
    M&S Loan £13395.66 inc interest full term
    M&S Credit card 0% £3740.18
  • EssexHebrideanEssexHebridean Forumite
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    Get the SOA done and let's take a look - but put that in place before exploring any apps for budgeting would be my suggestion. You need to know the nuts and bolts and understand how the process works from the ground up before you hand over to technology to do it for you - otherwise when things go wrong you can't understand the reasons why that's happened!
    MORTGAGE FREE 30/09/2016 :D
    SOA CALCULATOR (for DFW newbies): SOA Calculator
  • 117pauline117pauline Forumite
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    Hi Danielle

    How do you manage your money at the moment?
    We all "manage" our money whether that is well done or badly.

    Keeping a spending diary along with listing all your expenditure will help you see where your money is going.

    Write down the amounts at least every day, preferably as you make a purchase. In the beginning I even looked at who I was with, what sort of mood I was in, even the weather!

    Yes, this does take a bit of time but weigh that against the time you worry and feel stressed about your situation.

    You will start to notice patterns of how you spend. For instance, the friend who always wants to meet in an expensive cafe or bar; buying goodies when filling up the car with petrol; rewarding yourself with treats when work is horrible.

    Start tomorrow. Don't wait for the end of the month or payday or even in the New Year. Get used to recording your spending.

    You say you want to change your relationship with money. Take some baby steps towards taking control.

    Good luck
    Pauline
    Don't get it perfect - Get it going
    Better Than Before
  • DD265DD265 Forumite
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    I like YNAB too.

    I got out of my overdraft by paying it off with a lump sum, and immediately closing the facility with the bank. You don't need to switch banks to do that.
  • enthusiasticsaverenthusiasticsaver Forumite, Board Guide
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    The obvious thing to do is use your savings to pay off debt

    If you cannot trust yourself not to go back in debt don't take out a credit card.

    Sort a budget out so you have better financial discipline.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected]
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