First Steps to Solvency

alt80

Busy work day today and been able to fully concentrate for once. Things looking up. Just seen my son's work been shown on school social media. He doesn't tend to get a lot of work featured etc so really pleased for him! Think I'll have to make him a hot choc with the marshmallows tonight. Made my day that haha. 

@annabanana82 ha how did you know I'd considered buying the whole of the Portraits range lol. 
I am considering where the balance is for me tbh. Know I need to get rid of the cards - certainly at the levels they have been for quite a number of years. Until this year I used to pay myself a massive divi end of the financial year just to offset the cards a bit. Talking the sort of payment that would just about add another (cheap) unit to my portfolio. Knew that wasn't happening this year as business was affected first lockdown. Tbh no plans to go back to it if I can get free of the big card balances. Can stay retained and money put to better use.

Can't say even I particularly want to go back to the £10k JL afternoon, looking back I really wasn't in a good frame of mind at the time.

Yeah my wife likes to spend too haha. Strangely looking forward to spending an hour reviewing the budget before the reset tomorrow. Much calmer about it than I have been tbh. 

@RelievedSheff haha me and you gonna be in debtors corner for life mate. Similar re credit cards. Always been a bit of an issue for me. Tbh thinking long term I should close some not have so much credit available. Someone on here said to me 'who needs £100k credit available' thinking that's probably a good idea long term - made me think like a lot of advice I get on here haha.

@warby68 ha didn't get that sort of advice from my dad lol. FML only thing he taught me about personal finance don't borrow money from dodgy sources and if you do, you're not in. 

Tbh I completely get your approach. If I'm totally honest with myself I know what I 'should' and 'should not' be using debt for, just always let my personal finances be out of control to some extent. Always believing I'll become 'successful in business' and won't even need to think about it. Starting to come to terms with the fact I sold myself a !!!!!! pipe dream tbf lol. Lot of my staff think I am successful in business and I have considered that things are not so bad when compared to much of the population - the income figures really made me think and put it in context a bit. 

Home improvements - interesting one there. I have only ever considered my current res home a 'home' in the real sense of the word. Everything else was a development project I just happened to live with so improvements were undertaken with a pragmatic approach, considering return and little else. When I bought this house all reason went out the window but there was an uplift in value and over the time we've been here capital appreciation has overtaken the outlay too. Had I done nothing res mortgage would be c.35LTV rather than c45LTV but the property would have dated fittings throughout. Yeah developer part of me cringes a bit over how out of the window the kitchen budget went but I love my kitchen tbt so idk conflicted on that tbh.

Willowtree222

You're sounding so much better Alt.
It's interesting you and your wife have the same compulsions with addiction. It is an illness and takes time to deal with and get through. You're sounding a lot more focussed and positive. 
Your wife exercising to injury shows just how addicted she is too. Hopefully she's wanting to change now she's said she wants more balance. X

theoretica

I don't see much point earning money if you aren't going to get use out of it - but to me it's all about making sure you control the money and it works for you and not the other way round. 

Onebrokelady

The thing is there are ways of using credit cards and finance that are sensible and practical if you are sure thats is what you will do . I have not used a credit card since I started my DMP, for one I wouldn't be able to get one now and two I know I would lose control pretty quickly. I will never allow myself to use credit cards or finance again ( if I am ever allowed to) because I know I can't be trusted not to go crazy and overspend . There are lots of people who do use finance as a sensible means to an end though which is fine so long as you are sensible with it 

RelievedSheff

Onebrokelady said:

The thing is there are ways of using credit cards and finance that are sensible and practical if you are sure thats is what you will do . I have not used a credit card since I started my DMP, for one I wouldn't be able to get one now and two I know I would lose control pretty quickly. I will never allow myself to use credit cards or finance again ( if I am ever allowed to) because I know I can't be trusted not to go crazy and overspend . There are lots of people who do use finance as a sensible means to an end though which is fine so long as you are sensible with it 

We have come to the conclusion that credit cards are not for us either. We can't trust ourselves to be sensible with them. So as we are paying them off we are closing them down. 

We will keep one credit card in a hard to reach place for absolute emergencies but the rest will be shut down. We don't want to be in this sort of card debt again.

HP finance we view differently and we will no doubt continue to use this as a way of funding our vehicles in the future.

getmore4less

warby68 said:

I'm another not expecting you to take a vow of poverty and never spend again.
We've operated by the general principle of only borrowing for property or vehicles. It was my dad's advice many years ago when consumer credit was barely a thing. Working in finance taught me to pitch debt to the life and amortisation rate of the asset and certainly not to still be paying for something when the next one is due. Holidays, lifestyle, weddings, furniture, white goods - all that stuff either doesn't last or has no value once its no longer new so never borrowed for them. Home improvements is my grey area - would probably consider that OK if we really needed to as it would be something that lasted/or kept value in the property. Obviously this ignores any crisis situations where borrowing is the only option.
That's just my general view on personal borrowing - there are loads of options between zero, ever and too much, all the time.

You will find a level that works better for you eventually.

This ties in with the other classics. 

You can only spend the £1 once.
Borrowing from future self. 

Credit is not a magic money creator it just uses up future income in advance. 
It all comes from the same pot. 

alt80

Tuesday, sleep still all over the place not long woke up just wfh day today so no big deal but do want to work on the sleep routine. Having an hour on the schooling with son later see how he’s getting on. 

Had a really nice evening in last night. Didn’t really do a lot just film with son and hot chocolate treat for his school work, watched part of a tv series, bit for the counselling and bed. Didn’t touch work all up to date so just decided to have a break come back to planning another time - can get myself in a mess overanalysing for some ‘miracle’ or just something I’ve missed. Doesn’t help and is another obsessive thing. Was meant to look at figures for personal but didn’t do that either got a bit too late. Wife persuaded me to sleep instead. First time in months I’ve been able to completely switch off for an evening but paying for it now anxiety through the roof for not having done the spreadsheet get it sorted at lunch if I can. 

My problem with personal debt isn’t a lack of understanding, more a lack of control and belief it isn’t a problem spent years justifying it to myself. Yeah I know. Looking at past decisions for what they are and analysing the value has let me consider whether things were worth it or not. Has been a source of the ‘punishment’ though so not sure it’s an approach for everyone- 100 need to be objective and I suppose be able to move on, put the fact you’ve lost that money for good behind you and you are where you are- that’s what you’re building from like it or not. Really !!!!!! difficult tbh but long run hope that exercise will have been worth it for me. Def makes me think twice about buying. Do the numbers and come back FML going to end up having the spend freeze haha even wife came back to me after her reminder going off this morning said it’s not worth it - 100 her decision left it to her, see what she did I suppose. Actually said one of the items in wish list she didn’t even like that much haha I’ve been there too.

RelievedSheff

Glad you had a nice family evening and enjoyed it.

Don't worry too much about not doing the personal figures last night. They are still there this morning. Not something to get obsessed about!

Hope you can turn off again tonight and have another family evening. Your son will really appreciate it.

getmore4less

We have a pipeline of series for evening viewings, some good stuff on prime if you have that.

A mix of serious stuff and comedy fillers, things we both like. 

If you want a big one "Bones" 246 episode to get through, stands up quite well a good mix of crime investigations and some humour. 

A couple of hours escape a night is good. 

The great thing about the personal plan it is basically the same month on month so only minor tweaks and tracking a few days here or there doing reviews does not matter.

enthusiasticsaver

Onebrokelady said:

The thing is there are ways of using credit cards and finance that are sensible and practical if you are sure thats is what you will do . I have not used a credit card since I started my DMP, for one I wouldn't be able to get one now and two I know I would lose control pretty quickly. I will never allow myself to use credit cards or finance again ( if I am ever allowed to) because I know I can't be trusted not to go crazy and overspend . There are lots of people who do use finance as a sensible means to an end though which is fine so long as you are sensible with it 

I would agree with this and think if you know that you are inclined to see credit card limits as free money then it is best to not use them.  

There has always been this debate over good and bad debt.  Student loans, mortgages on property and other assets were seen as good debt but credit card and unsecured loans as bad debt.  I don't think it is as black and white as that.  Most people need a mortgage to buy a roof over their head but how fast you repay it has been up for debate in recent years due to  low interest rates and whether it is worth overpaying or should spare money be directed towards pensions or investments which are giving good returns at the moment.  I definitely see credit card spending (unless on 0%) as bad debt as they are usually indicative of spending more than you earn or anticipating future income.  We have used 0% credit cards and and are using 0% finance on furniture due to worries over firms collapsing after furniture ordered. I will only do that though if we have savings to back it up.  

Cars, motorhomes(like RS is considering) and home improvements I would think can be treated like mortgages and as the lending is to be used for an asset could be considered good debt.  We would never borrow more than 50% of an asset though which depreciates heavily as all of those do.  Even home improvements rarely add significantly to the value of an asset so again we would only borrow 50%.  Probably others would view it differently.