First Steps to Solvency

shoppingobsessed2020

Been following with interest, I think you need to break the credit cards down in the soa and honestly seeing them getting paid off is such a boost.  I’ve cleared a couple over lockdown and it’s really made me feel we can do it.  We take home a couple of k a month less than you but still have a hefty debt.

My monkey boy is 8 and is very spoilt.  We’ve had tantrums and things over me cutting back on the Pokemon cards and the switch games jut because, he’s actually really enjoyed sitting down on a Sunday afternoon and having a film day with me.  Tomorrow we are going to start working our way through the Indiana Jones films.  He’s seen s’mores on various sites so I’ve bought the crackers and things to make them and that’s going to be our Sunday afternoon treat instead of the £35 cinema trip that we would do pre lockdown after swimming plus the £10 coffee shop on top of that.  £10 on s’more ingredients to last a good few weeks and he is bouncing and can’t wait to try them.

The big shift with me and monkey boy was sitting him down and explaining that if he wants daddy home more we need to have less treats, we have wrote out various bits of activities he wants to do and on a Saturday we pick one at random, sometimes it’s a paid activity, other times it’s a free one such as baking a cake or going to the beach or having a teenager day where we both spend the day in pjs just chilling out (that was today’s activity).  I’m very lucky that my parents give us annual passes for things for monkey boys Easter present rather than chocolate so we have memberships to a few things which make weekend trips so much easier.  Perhaps something to consider especially if you get English heritage through your bank, having a choice of two or three passes to use on a weekend makes a difference as sometimes we want to be indoors and on nice days we want to be outside.

I wouldn’t personally cut down the present budget as I don’t think it goes very far at all.  One game is easily £50 and then if you do a birthday party then there £500 just on party, cake and a couple of presents.  We have cut back on the party as it was always the same parents throwing the party so now it’s sleepover and cinema or bowling with a couple of friends and a meal out rather than full class party and there’s a couple of hundred saving. COVID makes it easier to cut down on the party as you can’t book or plan anything as you don’t know what the rules and regulations are going to be.

re the spending I love browsing and nothing more than going to a local shopping centre and blowing a good few hundred on some skincare and makeup or taking monkey boy to a toy shop and treating him but a few months down the line when I’m more in the mindset it’s easier to stop the compulsion (let’s not mention how much I spent in Costco the other day and now need to rejig my budget) but generally it’s easier to do it.  I find it easier online shopping as I can control the urge easier but in person even if it’s grocery shop it’s super easy to get carried away.  I do my main shop online and then spend at local farm shops and butchers for my meat and am going to have to redo my soa in the next few weeks as my grocery budget is hitting more than I’ve budgeted for but we prefer quality over quantity and I have been building my store cupboard up these past couple of weeks after having ran my freezers down.

ohdearhowdidthathappen

I've been reading through your posts over the last few days with interest.
No judgement here as we're relatively high earners (£6-6.5Kpm) and endlessly soul search and juggle to make it cover what we want to.  A few points from me on your SOA, also a few things that have helped in our household and apologies if they've been covered before up thread:
- Does your wife not work at all?  We have 5 kids (aged 5-16) and I work 3 days a week and always have.  It's entirely manageable and brings in a nice amount extra (even after childcare).  I was brought up in a household where my Mum didn't work, she is RUBBISH with money as she has no concept of how hard you have to work to earn the £££, so everything just seems like paper money to her.  I like that the children see that both their parents work to contribute to our lifestyle (although my husband earns 3 times my salary!).
- I agree with a previous poster about work vs life.  My Dad worked very hard and that had a massive effect on his health, he died at 65 after several years of ill health.  It's another reason I work, I don't want all of the burden of earning to be on my husband's shoulders... I'd like him to be around to annoy me well into our 80s  and longer term, I'd rather he had a less well paid job than risk his health.
-work/life balance - tricky one, my husband earns a very nice wage of circa £4.5K.  He COULD earn at least £1.5-2K extra a month more, but it would impact on our family life.  He currently works 8-4 Monday to Friday, no evening or weekend work (his work phone and computer are completely ignored).  I'm sure it's harder to switch off if you're self employed, but do try to prioritise family time, you'll never get that time back.
- cars.... this is a bug bear in our house.  I don't care about them at all, I like a newish car, but not fussed on make.  My husband likes nicer cars, although his current one 'only' cost £25K and I found that appalling enough    Would it be worth downshifting your cars just until you're debt free and then upscale them again at a later date.  Your car payments are eye watering and will really hinder your efforts.
- Monzo - I'm a massive Monzo fan.  We're relatively new converts, but has made a huge difference to our budgeting.
- personal spends - my husband and I get £100 a month to spend on what we want, no questions asked.  Helps us to prioritise where we spend it.  Everything else goes in and out of our joint Monzo account, so we can both see EVERYTHING.  Makes you think twice about what you're spending
- Christmas/Birthdays - we spend £100 on each child for their birthdays and £200 on each of them at Christmas.  At 7 years old, you could easily cut your budget for these.
-Food - we spend £650 a month for 7 of us including toiletries, alcohol and stuff for our cat.  That's relatively high in MSE terms, so you could definitely trim here.
-your wife's phone - our SIM only deals are £6 a month for unlimited calls/ texts and 8GB of data.  Perhaps when here current deal comes to an end, she could keep here existing handset and switch to SIM only.  I also love Apple products, but have a 6s which has been out of contract now for 3 years.  Still works absolutely fine and I'll probably get another year or two out of it.

I hope none of this sounds preachy, we're far from perfect, but these are some of things I've learnt during my last few years of debt busting.  I wish you the best of luck and have subscribed to follow your journey

ryanm8655

Another idea that may not be possible...could the BMW be your company car, especially if you “employ” your wife? Might be a bit less on the BIK. This may not be possible so ignore if so...

Do you need two cars? Could you get rid of the BMW in time? Especially since the wife hates it.

I feel for you on the father in law situation. My grandad was similar with my uncle. He used to give him grief about his flash cars and the way he flashed his money around paying for family dinners at nice restaurants when he came down. The rest of the family still sort of make comments about it...He is a bit rude about the wine on offer sometimes though When he brings down his Barolo’s, so perhaps he does bring it on himself

Your comment re: hating national trust because you feel bad about not having as nice a house as a 16th century baron made me laugh. It’s an absolutely mental way to think but I completely get it I do think some form of counselling or something could help you a lot as there is obviously something there that makes you feel that way. I have a similar problem to a lesser extent. Comparing myself to others, particularly friends, who are earning fortunes and get a bit down about it. But then at the same time I’m doing far better than my parents ever did and all except one person in my family money wise. Even most of my close friends. But some of my London friends are doing very well for themselves and I can’t see a path there in my current job, which gets me down, though I have other perks... But the more you earn the more you compare yourself to the next rung up. If you do that you’ll never be happy and always have this pressure to keep up with the jones’ or 16th century barons. It’s hard and I still do it but it’s definitely a hurdle you need to overcome, with help. When you do you’ll feel so much better and probably be even more successful.

alt80

@QueenJess I don't think no holidays ever again is sustainable at all. Something needs to give at the moment and holidays where one of our bigger expenses. 

We still have lots to sell. I think with all the stuff my wife is willing to sell (high end bags etc that she's bought but doesn't use often just bought for an occasion and literally used once) we can make £10k total from stuff lying about the house. That would see a quarter reduction.

@BlytheDoll Thanks. My mind isn't in the best place at the moment. 

I agree re putting the 'business hat' on - I need to. My personal finances are such a mess because in my personal life I have no regard for the future. Very much in the 'you get one life' camp.

@JCS1 Thanks. Yes, it was relieving to see there is a tiny amount left over if I can stick to the soa. Still sticking with the counselling. I have had a session so far. It was a lot tougher than when I had it for a health anxiety problem but I think this is much more ingrained than the worry about health ever was. 

@monetxchange It's been difficult to face what's really going on. I've hidden it from myself for so long by avoiding taking control over it that I didn't really know it was that bad though I knew I was heading for the same six figures of unsecured debt again. I can't let that happen a second time.

I plan to keep the Range Rover 10 years not exactly until it falls apart but will need a plan to get the next one. Going by values of 10 year old similar cars it would be worth about £20-25k obviously that's in the current market. So it would be worth enough to fund the deposit on the next one which is how I bought this one in the first place (my last Range Rover which was the cheaper Sport I'd had from new and ran for ten years). Focusing on a future spending goal helps a little. 

Presents are not a big deal for the rest of this year - it's already all been bought or as much as I'm willing to let wife buy so that starts January rather than for this year. He has a big family on wife's side but as I've mentioned before he doesn't see my side of the family really.

alt80

@shoppingobsessed2020 Thank you. Not preachy at all. 

There's a breakdown on the very first post. 

Wife does all the grocery shopping online. She hates shopping for food. 

I don't want to cut my business at all I want to grow it further. Do need to find a better work/life balance but that shouldn't cut profitability. I won't be telling our son anything about this he doesn't need to know imo.

We don't spend lots on entertaining our son. Cutting out the school he's easy going and cheap to 'run'. We don't have birthday parties but do buy a lot of presents he doesn't really need tbf. My wife is Christmas mad though.

@ohdearhowdidthathappen Thanks. I've had enough judgement to last me a lifetime I think lol. 

Wife: No she doesn't work. I've mentioned this before but we met when I was 28, she was 20 just dropped out of uni. She did get an admin job but found it miserable and stopped working at 21 when we were engaged. She is 32 now so apart from helping me out and now doing a couple of girls' nails (for her spends no one else) she has not worked in over a decade. Before that her experience was admin and a bit of babysitting in her teenage years.

She too was brought up in a very traditional household and was quite honest that's what she wanted.

Work/life: I enjoy running my businesses but taking a bit more control over the hours I work wouldn't be a bad thing. I am generally quite healthy - healthy bmi, exercise and don't eat a lot of rubbish. Feel much more stressed over this situation than my business life. If I didn't earn at least the money I do now my wife would leave me for someone who could give her more so a lot of pressure there too.

Cars: you've seen the cut down version. I've got an f-type too which is going back to Jaguar and adds £1.1k/m to the figures you've seen. I will not downgrade my Range Rover. Open to getting rid of the BMW and getting a nice XJS for wife (she's always wanted one) but that will require me to get another loan for it. The positive to that is no depreciation / £200/y max insurance and maybe free tax if it's the oldest one. Would work as a nice toy to have too.

Monzo: I'm happy with using the yolt app for the moment but have heard good things about monzo. 

Personal spends: wife is keeping any nail money for this. I genuinely don't need anything apart from enough to keep my f type but that's not happening.

Christmas / birthday / food: will have to speak to wife about these tbf but can't see it being realistically cut much further.

Wife's phone: I hope to cut it to sim only when it's due next year (11 pro so should be good for 1/2 years more after that).

alt80

@ryanm8655 The BIK for the BMW is high too (it's a 440i). My wife hates the BMW and I don't love it tbf so probably just going to say bye bye when we can terminate it. I considered whether we could just live with the Range Rover between us but wife has been quite clear she does want us to have two cars. First place option is adding an XJS other options I'm considering are an older F-type / XK / Z4MC / AMV8 (I know this sounds extravagant but early ones are seriously tempting and cheap) so it combines the fun element with the second car element and eliminates massive depreciation.

My father-in-law is the sort of man who likes to think everyone will listen to him and do as they are told. He hates nice cars / nice houses and has a massive problem with private landlords; very socialist in his politics and the type of man who thinks capitalism is the root of all evil. His children have generally become / married teachers and the like - respectable professions but generally more aligned to his way of thinking apart from his youngest daughter who married me. He basically thinks I'm a 'cradle snatcher' who has converted his little girl to the evils of wanting far too much lol so has long been far too obsessed with the idea I'm leveraged to my eyeballs and have no actual money. Not far wrong in my case tbf but I'm not going to give him the satisfaction.

I hope I can overcome the comparison issues lol. Sometimes I laugh at myself for doing it - I do have a sense of humour.

Candy0107

Can I chip in (again) with some ideas?
Direct Debits - can you set up a DD account?  Move the DD money (and a small buffer) to a separate account.  You'll know everything has been covered without constantly looking at the account.
Clothing/handbags etc - personally, I am not a fan of charity shops/Ebay for clothing, have you thought of going to a designer outlet place?  I went to the one in Portsmouth last week and saved a bit of cash buying a pair of trainers.  There are a couple of shops that sell handbags/cosmetics etc.  You could make a day of it.
Hair/beauty - is there a beauty department at your local college? At my local college the treatments are approx half of what they charge in a salon.  Plus, you are helping someone develop skills....hopefully your wife goes for this?
Good luck.

mamamu

hi few pence from me.

Budget: I earn around 6k it is 3 of us with 4yo in the house and other have income around 500£/month max. We do have private school fees but modest house and modest car. We travel ( before covid) a lot. Spend a lot on a food and books but very little on clothes or bags.  So very similar income but very different budget. 

You can do it! What helped me a lot was zero pound budget. Where every single penny is accounted for. I have got starling account, monzo account and my high street bank account. On payday I transfer fixed amount of money to monzo for food and dog and stick to it. We got 70£ left and 10days til payday and I will not transfer any more money to it. 

Starling account is for spending for a month - fuel, parking, days out, toy for a child or book for me, some fun money too.  And loads of pot for sinking fund - school fees, car insurance, birthdays, holidays etc. Some of them are topped up some of them not yet ( holidays) while paying debt off. I also transfer fixed amount on payday and stick to it religiously. 

High street bank account I leave Exact amount for DD +50£ just in case 
Then on payday i transfer money what is left for debt repayment and emergency fund. I will do the same transferring to savings. 
so after payday I do not have a single penny to spend  unaccounted. 

Made wonders to our life. We have money in sinking funds for everything and do not fritter any money away. 

Cars: I don't think  RR will be worth anything 10 years down the line. With polution, climate change all petrol and diesel cars will be taxed so that it will be to expensive to keep it. You can get Very good electric car with BIK 0
and it will carry on. Petrol and diesel cars will become more and more expensive to keep every year especially V8.

You can do it! 

enthusiasticsaver

It seems strange for a daughter of an anti capitalist socialist to revere money and possessions so much she would leave her husband if he could no longer provide an affluent lifestyle. I have to say I find her attitude worse than yours. Dropping out of Uni, not wanting to work and just looking for a husband who would bankroll her lifestyle and leaving if he falls short is a dreadful example to set your son. Maybe she is pushing back against her fathers principles. That may be as much at the root of your problems as the desire for toys and the self confidence where you compare yourself to others constantly and find yourself wanting more. Both of you need help I think on resetting priorities. Reading some of the diaries on here is good I think as you are maybe beginning to realise your lifestyle is not normal. Aiming for a more simple life (like the one you had in lockdown which you said you enjoyed) might be something to aim for.

It it looks like the new soa has a surplus so that is a start. I would allocate some to an emergency savings fund so you do not have to add to the debt should you have an unexpected bill. The groceries figure is still high but I get this is constantly evolving. If you are only paying minimums on the debt you will struggle to clear it in a relatively short time. Maybe set yourself goals of clearing them one at a time. I think the private school will have to go especially as your son is only 6. Do you not have good primary schools in your area? Get your wife on board with maybe settling for state education until secondary school? Your FIL should be on board with that. You need to work on not getting upset by his opinions and make sure you are making the right changes for you and not hanging on to a semblance of affluence just so you don't prove him right. 

ryanm8655

enthusiasticsaver said:

It seems strange for a daughter of an anti capitalist socialist to revere money and possessions so much she would leave her husband if he could no longer provide an affluent lifestyle. I have to say I find her attitude worse than yours. Dropping out of Uni, not wanting to work and just looking for a husband who would bankroll her lifestyle and leaving if he falls short is a dreadful example to set your son. Maybe she is pushing back against her fathers principles. That may be as much at the root of your problems as the desire for toys and the self confidence where you compare yourself to others constantly and find yourself wanting more. Both of you need help I think on resetting priorities. Reading some of the diaries on here is good I think as you are maybe beginning to realise your lifestyle is not normal. Aiming for a more simple life (like the one you had in lockdown which you said you enjoyed) might be something to aim for.

It it looks like the new soa has a surplus so that is a start. I would allocate some to an emergency savings fund so you do not have to add to the debt should you have an unexpected bill. The groceries figure is still high but I get this is constantly evolving. If you are only paying minimums on the debt you will struggle to clear it in a relatively short time. Maybe set yourself goals of clearing them one at a time. I think the private school will have to go especially as your son is only 6. Do you not have good primary schools in your area? Get your wife on board with maybe settling for state education until secondary school? Your FIL should be on board with that. You need to work on not getting upset by his opinions and make sure you are making the right changes for you and not hanging on to a semblance of affluence just so you don't prove him right. 

I was thinking the same thing re: wife and rebelling against her father’s views. Agree she probably needs some help too.

Agree on the last point too.