Need to pay off debt

tlc678910

Hi OP,
If you are concerned about getting your timings wrong and not having the money for a bill once you get through the first month you could not overpay or move anything to savings that first month and leave it in the bills account. Leave a little in the second month too and you will have enough to run the account with £1000 as your baseline instead of zero. That way if you make any mistakes the money is there.

As you have a child at university I wonder if it is possible to update the finance application to reflect that your husband is no longer part of your household and whether your child would get increased student finance. I don't know the answer but its worth looking into,

Spriggan

Your 22 year old might actually like to be treated like an adult! It’s just that age where you’re desperate to ‘be a grown up’. So rather than trying to lay down the law (as you may have done when she was little), talk to her honestly about the situation. Don’t make it sound like she’d be helping you out (as she might expect it to be temporary), but give her the facts and let her know that you can’t afford to support her - and she’s old enough to support herself. Definitely a good thing for her in the long run.

-taff

Have you budgeted before? In terms of general household budgeting what you can do is go through all of your outgoings from the last three months and see where you are spending the money. It seems as if you are only paying the minimum on your debts which is not going to make them go down, they will instead , go up, which is not what you want.
It's not important what time of the month your payments go in, it's important that there's enough money in the bank to pay them as they come out. Make a budget that includes all the money you have coming in as if it were in one go, then remove the payments necessary from it. {which is pretty much what you have done above except you have nothing going into an emergency fund and a £100 for presents a month? That can go in the emergency fund]
Splt the rest of the money into weekly pots so you have enough for the shopping and any other weekly purchases.
With any money left over, pay more towards one [or more] of the debts.
You can either snowball the debts [ google snowballing] or pay off according to some other criteria.
What you absolutely must do is go through old statements and/or receipts to see where you actually have been spending money [ like coffee out, like the cinema, like a magazine, like a sandwich out etc] and times them by 12 to see how much you actually spen a year on those things, then decide whether or not you can afford to keep going doing that]
Your SOA is not set in stone, you will have to jiggle it about a bit until you find a workable solution.
And you must sit down with your family and tell them about the financial situation, and that everyone will be expected to contribute, either by consuming less, helping with that [ switching lights off, turning down thermostats, batch cooking, using less energy] or in the case of working members, they will have to contribute.
You are the head of the household. You are in charge. You do not have to have your daughters agreement that she pays, you tell her that she pays or she pays somewhere else.

It's a lovely though that parents look after their children forever and never expect them to contribute, but that is not possible sometimes, and it's not very good for your daughters sense of responsibility, because it will teach her to do as she pleases, which if she carries that on into her next home will not serve her well.

Willing2Learn

RhiBi wrote: »

Looking at this, I should be able to pay off the debts very quickly, but what I'm finding difficult is that I get money at different times of the month. Universal credit is paid on the 8th into my current account, my wage gets paid on 15th into the same account. The maintenance gets paid on 22nd into a different current account that my bills come out of - I've arranged all bill dates from 22nd - 28th of the month. I'm just finding it all very confusing having (embarrassingly) never dealt with this before. Please help me as I really can't see how I will have £900 surplus to pay off debt - if I do then thats fantastic.
How do I make sense of this in my head, I am afraid to pay off a huge chunk on a credit card in case I've forgotten something, but at the same time, I need to get the debts down. Please can someone talk me through this in very simple baby steps, as I am just panicking and not sleeping trying to make sense of it all.

Regarding your £900 budget surplus. In my opinion, the first thing you need to do is go through your bank and credit card statements for the last year. There will be transactions on them that will indicate where you are spending money. You can then amend your SOA accordingly.

The second thing. You need to start a spending diary to track where every penny is leaking from your monthly budget. Every time you spend something, you update your diary accordingly. So if you buy a chocolate bar, a latte, an item of clothing, a train or bus ticket etc, then you record this in your diary.


Regarding your SOA. Here are my thoughts:

• Are your water rates payments spread across 10 or 12 months? Is the water metered?
• Your landline is expensive
• Do you not have internet/broadband that you pay for?
• How much do you typically spend each month on clothing? It must be more than zero!
• There should be something allocated toward your travel costs
• You need life insurance/assurance
• How much do you typically spend each month on entertainment? You must spend something...
• You need to allocate something toward your Emergency Fund as this is a vital part of all successful budgets.

Edit: I forgot to say something.
I agree with the others. Your two adult children need to contribute something financially to the family. After all, having financial obligations and having to pay for the 'roof over your head' is all part of growing up.

Tink_04

If you add up the cost of all the bills (round up figures) and have them come out of the Halifax account with the £500 in and adding the difference. The rest is what you have left.

You then need separate either pots or savings accounts etc for Xmas/holidays/annual expenses & EF - deduct that from what you have left and set it as a standing order so it becomes a 'bill' to pay.

Your shopping for food etc the OS board is amazing for budgeting and meal plans and can really help you save some pennies here.

Write down everything and plan ahead. A notebook/spreadsheet is your friend. Just aim for a month at a time then re evaluate.

Rome wasn't built in a day - you need to learn to budget before you can start overpaying your debt or you will end up borrowing.

Good luck and keep coming back here again and again, read the diaries, join the challenges and say hi on the OS board.

Tink

JadedAngel88

Just to add with regards to Monzo. You can set pots up for the various things you need. I have my bills, clothes and household stuff. I get paid ESA every 2 weeks, PIP every 4 weeks and Universal Credit on the 26th. So I have set amounts come out of this money when it hits my account.



With my bills, all my direct debits are set to be paid from this pot, you could customise the pots to however suits you and set up when money goes into your account to be paid into the pots and make payments from those pots. I find this is easier when you have different paydays through the month. I have used YNAB but gave up on it as it just didn't work for me. I also keep a small amount of money in a land based account just incase Monzo has blip and I'm not totally without cash.