First Steps to Solvency

alt80

Don’t need anymore 100%. Tbh I definitely shouldn’t spend £1k on clothes, wife will easily. I’ve labelled clothes misc. as I’m fairly certain it’ll get spent in miscellaneous spends over the year? Realistically £1k very easy to lose just on general stuff.

Agreed re son and accounted for. 

I would like to make some savings on the personal spending and VT the BMW - right now looking at the figures, I can’t make quite the inroads I would like into the debts. Think we are going to let the BMW go tbt so no overspend but I do want the £1700/m to throw at the debts. Realistically I’ll pay off the debts and 0% some of this stuff when the spends come up tbh.

Thinking I probably should look into making something from the balloon money as it builds - when the cards are gone obv. Unit not really ideal flip or rent - I’ll want the cash to pay Land Rover off a short time after saving it. Possibly take lower income and leave retained but still going to have to get it out one for accountant ha. Never invested outside of property tbh it’s all I know but been thinking could try and make a bit trading stocks or currencies or something idk possibly a bad idea but would hopefully make up some of the inevitable shortfall.

enthusiasticsaver

alt80 said:

Need a bit of a sense check on this one. Wife and I been going through needs/ wants for the rest of the year (assuming lockdown not carrying on indefinitely) - some of this cannot be changed eg school uniform which I’ll be honest I haven’t accounted for before now. Yeah I know. Really tried to cut back with this but be somewhat realistic. If this is what we spend which is very likely if lockdown does ease, we are £200/m short each month. Do the figures and I genuinely don’t know how anyone survives on £3/4k/m or whatever with a family but anyway here goes - 

Son - 
Uniform: £400
Occasions: £1k
Clothing misc.: £600
Misc. (Trips/ clubs/ hair etc): £500
Total: £2.5k

Wife -
Tennis: £340
Hair: £500
Beauty: £500
Clothing misc.: £1k
Occasions: £500
Total: £2840

Me - 
Hair: £150
Clothing misc.: £1k
Occasions: £500
Total: £1650

Family days: £1k

Holiday (visit parents - cheap haha): £1k

Weekends x2 (one already paid for and rescheduled due to lockdown so can do for this): £1k

Total: £9990, say £10k so £835/m

Rest of budget (/m):
House: £1810
RR: £1390 
BMW: £590
Food: £650
Fuel: £300
School etc: £1100
Entertainment: £300
Emergency fund (going towards paying debts right now): £170
Credit cards: £1105

Total = £8.25k/m

As others have said it comes down to priorities.  I agree though it looks realistic although the food could be shaved a bit and hair and beauty cut down to either less appointments or somewhere cheaper.  What about car running costs like insurance, services, tax etc? 

You are both trying to do everything on a finite pot of money.  You have a reasonably high mortgage (not low anyway), two expensive cars, private school fees, a fairly high food, clothing and entertainment and occasions budget (gifts?) not inconsiderable credit card debt and only one  income (albeit a fairly high one).  I think you either need to ditch the expensive second car or your wife starts to bring in an income whether it is nails, personal training or whatever or you cut back further on variable spends and rethink again when the credit cards are gone.  On the plus side once the RR debt payment and credit cards are gone that gives you a lot back in your budget (unless you finance the £48k balloon) but your sons private school fees will only increase as he gets older.  

alt80

@theoretica yeah makes sense tbf need to have a bit of something though or life not worth it really. Would say most people have some card payments/ a car payment though tbf prob not the school. Didn’t have that could have kept ftype but anyway.

Know what you mean re budgets I’ve always wanted it all forced it for a while with the credit but didn’t get there on the res home or the AM. Is what it is, need to accept it’s not happening for me anytime soon, maybe ever. Trying not to let the anger get too high about the whole thing, accept it. Can’t help but have the inadequacy etc over it but need to calm down, do the chill exercise and go to bed - got one for when this stuff going on in my head FML ha. 

enthusiasticsaver

Trying to make money by trading in currencies or stocks sounds like gambling to me and if you know nothing about it, which tbh it sounds like you do not then that could go badly wrong and you lose everything. Making money by investing requires a longer timeframe than a few years, carries a degree of risk and can be expensive if you do not know what you are doing. 

alt80

@enthusiasticsaver I’ve had to fight to get the hair/ beauty stuff this low think she will stick with it tbf if I stick with my end of the bargain so don’t think she’s going to budge further on that one.

Car running costs are accounted for under each car.

I’d say my mortgage is low tbh and decent LTV so disagree there but agree on cars/ food/ school. Occasions = gifts or night out / whatever but told her it needs to stay in budget. I’ve agreed to not bother with Christmas personally. Will buy wife something within the budget.

Cards - the payment is paying considerably over the mins now so could be cut tbf but want them gone so don’t want to revise.

Been there before re wife earning I’d like her to do something on that front but probably not going to happen, need to accept it and car I am seriously thinking about cutting it get a C300 through business but need to try one we might hate it.

Definitely don’t want to refinance the balloon tbh or as little as possible in some form.

I know the school will go up, plan for him to stay until 18 at current school and tbf it doesn’t go up too massively not like I’m going to send him off to some boarding school or something my mate’s kids will cost him nearly £30k a year each when they’re older !!!!!! madness. Probably won’t even use their education either makes son look cheap can tell you that. 

alt80

@enthusiasticsaver I haven’t got a clue tbh. Thought it might be interesting, bit of a buzz maybe if I make a few quid off it idk new hobby or something and a potential bit of a win to be had. Know where you’re coming from though.

enthusiasticsaver

alt80 said:

@enthusiasticsaver I haven’t got a clue tbh. Thought it might be interesting, bit of a buzz maybe if I make a few quid off it idk new hobby or something and a potential bit of a win to be had. Know where you’re coming from though.

You might want to look at a virtual portfolio in the meantime to educate yourself on investing without risking loss. We invest (I managed our investments for 5 years but now we have an IFA) and the general advice is to diversify to minimise risk of loss, don't invest outside your risk profile and think in terms of minimum 5 years. Most growth in investments is over a long time period and if you go for high risk that could mean high performance but equally high risk of loss of capital. 

ryanm8655

Keep away from stocks and shares dude. Leave it to the pros. It’s a zero sum game and if you don’t know who the loser is then it’s likely to be you.

Stick to what you know, which is property.

I’m considering putting my LISA into a stocks and shares one but wouldn’t be making trades as such, just stick it in some fund where they’ve done the diversification for you. If you let it sit for a few years then risk of losing money is a bit lower, though still possible.

I have a mate, very bright guy, studied MORSE (basically the nerdiest course there is, pure maths/statsy stuff). Works in finance (a financial modeller). Who got really into spreadbetting...one day he was up
well over £100k, talking about what he was going to buy but how he’d done some modelling and was certain his next spreadbet was going to come off and he’d be buying an ac cobra etc. Next time I saw him he’d lost it all and was £80k in debt, genuinely suicidal, crying about telling his fiancé...and he sounded like he knew what he was doing...

It is just gambling really. Yes, in theory you could beat the market or get lucky but are you really going to beat people that do it for a living, have access to more information and more quickly than you do...not in the long run...

Mate says he’s largely cleared the debt now but I reckon I’ve seen him once since the night he was crying into my shoulder on the southbank and this was 2/3 years ago. He hasn’t been able to afford to do anything but think lockdown has been good for him in that respect. He’s quite a risky and entrepreneurial guy so has some new start up venture now that matches projects to investors basically (talking institutions and several millions plus rather than individuals). He even had a dog clothing business as a side hustle once ha. 

getmore4less

Any diversification into stocks should probably be in a pension wrapper to get tax relief and be long term.
(Still desperate for that quick fix)

Big learning curve to become a trader. Managed or funds easier.

ISA are another tax wrapper option as that can generate tax free growth and income.

getmore4less

alt80 said:

Don’t need anymore 100%. Tbh I definitely shouldn’t spend £1k on clothes, wife will easily. I’ve labelled clothes misc. as I’m fairly certain it’ll get spent in miscellaneous spends over the year? Realistically £1k very easy to lose just on general stuff.

Agreed re son and accounted for. 

I would like to make some savings on the personal spending and VT the BMW - right now looking at the figures, I can’t make quite the inroads I would like into the debts. Think we are going to let the BMW go tbt so no overspend but I do want the £1700/m to throw at the debts. Realistically I’ll pay off the debts and 0% some of this stuff when the spends come up tbh.

Thinking I probably should look into making something from the balloon money as it builds - when the cards are gone obv. Unit not really ideal flip or rent - I’ll want the cash to pay Land Rover off a short time after saving it. Possibly take lower income and leave retained but still going to have to get it out one for accountant ha. Never invested outside of property tbh it’s all I know but been thinking could try and make a bit trading stocks or currencies or something idk possibly a bad idea but would hopefully make up some of the inevitable shortfall.

Falling back into the trap of budgets, the misc category growing because you don't have a budget that covers everything.

Would be no misc or emergency category in a well developed budget, everything can be planned. 
When you start you can't remember everything, unplanned spends  only happen once.
They go on the plan from then on.

Some will be estimated as their timing/amounts can be variable

Anything not on the plan does not happen or the plan changes to accommodate it.

You are using misc as a way to delay priorities, what happens then is a first come first served, the money runs out before it has covered everything you shuffle into misc so you don't have to think about them.

An interim solution is to list everything that is in misc and only spend on those.

Same thing apples to your £650 food category it includes  too much so you can hide spending.

It your budget so do what works for you but you do need to track every spend and make sure you are on top of where it is going.
Those large categories, misc, food need itemising.