Life After Lockdown

V8D

I've been prompted to join this board after taking a good look at my finances prompted by the Covid-19 lockdown and planning how to get through the next few weeks / months as I work in a profession which has been greatly affected by the measures the government has taken. I'm a Director of a small Chartered Surveying practice specialising in residential surveying and valuation. There's only myself and my business partner and up until this crisis we were hoping to take on an employee as our work was very busy. However, over the last week, this has dwindled to practically nothing with no information about when we will be up and running again.

Over the past couple of years, I've got into a habit of spending money before I've really earned it, waiting for the payout in a few months time (just being honest 😂). This isn't a desperate situation at the moment but the Covid-19 lockdown has prompted me to reconsider how I spend money and what I spend it on. Before the lockdown I was spending over £1,000 a month on eating out / restaurants / entertainment. I knew this needed to stop as I'm meant to be saving towards major redevelopment of my current home which we plan to stay in for up to 10 years before moving onto a house we want to spend the rest of our days in. There are lots of other goals but at the moment I'm not really focused on much else other than getting through the next few months. I live with my husband who doesn't work so am the only wage earner.

Current situation:
Mortgage: £113,446.27
Credit card 1: £6450 (£5,835)
Credit card 2: £1750
Credit card 3: £3250
The credit cards are 0% but I want to have them cleared before the end of the interest free period. The one with the largest balance is artificially high as £615 will be coming off it as soon as I've paid my expenses so that's why I've put £5,835 in brackets.

I also have a car loan / PCP of £365p/m. This is usually covered in my work expenses through my mileage claim but I think I will be covering at least the April payment. 

Income wise I take a small salary of £720p/m and top up with dividends. For March I will have a further £2,000 in dividends meaning in April we will have £2,720 to play with. I want to keep as much cash flow in the business as possible which means taking a smaller income for the coming months. Main commitments amount to £1250p/m (mortgage, council tax, utilities, car payment etc) so I'm hoping to be able to feed us for £300 this month and put the rest into clearing the credit cards. Also have a few things for sale on eBay, so may be able to make a few extra payments too but not sure anyone is buying anything on there at the moment or if I can even post anything until the lockdown is over. 

juliejim

Well done on getting a plan together, I think everyone will be tightening their belts now.
Jue

V8D

Thanks, Jue. 🙂 Just trying to enjoy a bit of time off work at the moment. Got enough food in to last to mid-April so shouldn't need to go out for much more than a daily walk / run with the dog. 

Have managed to log into the credit card accounts and found credit card 2's balance owing is actually £1,705, so that's a step in the right direction at least. 

Also after totting up our monthly direct debits the main commitments actually add up to £1,175/m rather than £1,250/m so that's £75/m I didn't know I had.

How's everyone on here tracking their budgets / payments? I've tried spreadsheets in the past but never stick to them.

South_coast

Hi V8D, welcome to MFW 😀 Now is a great time to start the journey, I think everyone is being a bit more introspective and thinking they would like their lives to be a bit different once this is over. 

You asked about tracking budgets, so I thought I'd share my method. I have got several savings accounts set up with the same bank that I have my main current account with. Mine are petrol, groceries and personal (everything that isn't petrol or groceries) but you can have as many accounts as you want. On payday, I set a budget for each "pot" and transfer that month's money into it. When I spend money, I transfer that amount from the pot back into the current account so it is there for when the debit card payment/credit card direct debit comes out. Money is free to move between the pots during the course of the month as situations and priorities change, but once they're all empty that's it! I've found this so simple to work with and I really like the fact that I can check the amounts in seconds wherever I am just by logging into my internet banking, I can see the overall picture at a glance and I don't have to be at home to work it out.

Good luck with your journey! 

regularsaver

Hi V8D, welcome to the forums. 

I budget very similarly to South_coast. I have my main account, and then lots of savings accounts beneath that such as food, cloths, car, socialising, holiday etc etc. Each month when I get paid, I allocate set funds to each one. Using this method has helped me greatly to know what I have where at any one time etc. Its really easy to work and simple to setup initially and if you need another pot for something else such as home improvements etc, its easy to add another. 

I hope this is of some help to you. 

coldcazzie

I also have a bunch of savings accounts into which I funnel money straight after payday, and then withdraw it right before the CC gets paid, quantities depending on what has been spent on that statement (eg, I might put £45 in for pets, only spend £20 one month but then £65 the next). I have a spreadsheet which I update regularly, with one worksheet for each account, plus the CC etc. I started the spreadsheet at the height of our personal financial crisis, which was probably about 15 years ago now (when we were utterly brassic, massive debt, had about £40 a week to spend on food and very little for clothes/shoes/gifts), and now it's an integral part of my life. I set myself a reminder each week (Tuesday evening after I come home from pilates) and I always update the finances then. Or at least, I did, until 2 weeks ago when we took ourselves into isolation, and now I'm doing it daily haha. I find posting here regularly helps hugely with keeping me focused on the goals I have.

coldcazzie

Also, welcome!! 

V8D

Thanks, all. I'd never considered having numerous savings account each set up for different things we buy and transferring back. I got into the habit of paying everything on a credit card and paying the balance off each month (the one with the large balance but that's not the reason why there's a larger balance on there). However, I find it really hard to track what's being spent on what without trawling through all the transactions. Our current account is with Natwest and their app has recently added a spending section which tells you where money has been spent over the month. I'm going to swap over to paying for everything on the debit card for this coming month and tracking exactly what's being spent where. Although, this coming month is going to be a bit of a strange one so can't really take it as a baseline but perhaps as an experiment in how little can be spent?

I don't think I'll really get onto overpaying the mortgage whilst we have the other debt but as soon as it's gone, I would like start making some serious inroads into the mortgage alongside paying for the redevelopment of the property. If we could have as much cleared as possible towards the deposit on the next place, that would make our lives much easier and the goal more realistic.

Current house is a 2 bedroom detached house built in 1925 and not touched since the late '60's on a large plot situated on the 'main' (not really busy) road running through the village. We plan to extend the accommodation into the roof space to create a large master suite including dressing room and en-suite, add en-suites to the two other double bedrooms and reconfigure and extend the ground floor accommodation to provide a sitting room, open plan kitchen / diner / living area, utility and cloak shower room. With the work completed we're looking at a GDV of c.£300k and a total works cost of c.£60k. Depending on how the business does over the next few years I'd like to think we will have paid for the house and works in full to give us the full amount to put down on the deposit for the next place. I would like a BIG house with a few acres. However, if things don't work out we're not opposed to staying here or selling on and taking another redevelopment or self build project. 

Income wise things are usually a fair bit brighter than they are at the moment so hopefully this is achievable but if not, it's not the end of my world. Also hoping keeping this up to date will help towards keeping me focused. 🙂

April Income:
Salary & dividend + £2,720
Expenses + £615
Total = £3,335

Committed expenditure:
Running house / cars - £1,175
Credit cards direct debits - £200
Credit card expenses payment - £615
Total left = £1,345

coldcazzie

Yes, trawling through all the transactions is necessary. As is, if you have different categories, working out which transactions fit into which categories. It's tedious at first, but once everything is set up it is much less tedious, and then it just becomes one of those things that you do because it's worth doing rather than not, like cleaning the dishwasher filter lol.

V8D

Cazzie, thank you. I’m going to try to set it up over the next week or two whilst things are quiet and hopefully when things are less quiet it’ll be easier. 

Slowly getting through your journal at the moment. 🙂

Saw on the politics show this morning that the lockdown may last until June. 😱 It’s a nice break at the moment but I’m not looking forward to being in the house until June at all. 😂

This morning I’m mainly trying to stop myself buying some trainers, leggings and sports bra from Nike as they’ve got a 25% off sale and I was about to join the gym before the lockdown started. Probably going to give it a few days and have a think about whether it’s the best way to spend the money first. Managed to keep fit over the past week doing home workouts and a fast paced walk / and running working through C25k with my golden retriever. 

V8D

Set up a spreadsheet for April and working through the plan for the credit cards. Going to check through the transactions once a week, set an alarm on my phone to do it and try to stick with it.

Think it's probably having some time off with the lockdown but I feel quite determined to start to work towards something a bit more positive on the finances front than squandering £1k/m+ on restaurants / things I'm never going to see again. 🙂