First Steps to Solvency

strawb_shortcake

I think you've the right to be annoyed with your wife, its obviously been difficult for you to admit the problems but you've had a great start trying to turn things round.
Though I agree with a "fun pot" can it be done immediately with your mindset? 
If you both had £200 per month will your wife's itches to spend be more satisfied by this amount than yours? I think at the moment there's the potential for resentment to set in.

But I do think once you've changed your mindset you will absolutely succeed in turning all this around. 

getmore4less

I think you need to be looking a lot further ahead than a month to get this to work.

I say it a lot the best tool out there for forecasting is MSmoney, (old, unsupported) they stopped working on it because it had everything in it you need to manage personal finances.

You can do this with spreadsheets but there are loads of extras ln MSM that can do stuff that take time to develop in a spread sheet.

You may already have a licence for software in the business that you could use.

These things take time as you need to adjust, the changes don't take effect immediately.

Step one is no NEW credit so the debts stop going up(live within your means)
This gives you nearly £1000  that is currently going out on min payments

If you can achieve that goal this month that would be a great start as you reach stability
you need to start looking ahead for the bigger tickets as they can mess up step one and set you back for the odd month.


Step Two is no credit, everything on a card  gets paid off this month and all min payments untouched so debt goes down
(some people use the cut up the cards cash only, not practical for everyone)
By step two there should be tracking in place, you will need to sit down with the wife and plan what spending is happening going forward, all spends should be agreed in advance not impulse buys.

For this to work all bigger ticket items must now be tracked in a forward looking cashflow analysis

IF you run your  plan forward for a year based on what you think you can manage on the spends with every annual spend included that will show the cash flow for the year and you can see the low points where any of the big ones have to go on credit.

As your massive number off DD you will need to do this as a daily balance a graph is good for this where when the daily balance dips below Zero you go red

First you try to get the end point back to or above zero and look for any below the line points and make adjustments to get them above the line.

The trick then is to adjust the spending and spending order to get all the low points above the line..


I suspect once you do that you will see the bigger picture of where your £100k a year spending money is going.

It would be great if you could make that full year balance out to zero AND pay all the CC mins for the year without dipping back into them.

You can then look at the things you might need or WANT and see if you can fit them into the plan for the year without using any new credit.

Another thing that might help is a review of where your debt came from and stick into categories.

Say some of the credit was clothes, then every time you get the urge to buy some clothes a gentle reminder to self that you have not paid for the last few thing you bought.

You could go a step further and use the budgeted amount on clothes to pay off the previous spends quicker.

Another thing you can do but this can be a bit risky if you don't have some buffer funds is look for areas where spend now saves money in the future, the easy one here is bulk buys, when stuff is cheap, this starts with mundane stuff like toilet rolls and teabags, you know you are going to use them all year so when they are on offer buy a load and look for the cheapest place to get them,  a lot fall into the I earn so i can shop at Waitrose and M&S and get stuff weekly monthly,  buy a years worth when cheap at the cheapest place you can find them.

it a bit like  annual insurance is cheaper than monthly, same with other stuff where the prices fluctuate  if you do monthly you will pay more than needed some months.

This is one area the wife can make a big difference use some of her time to reduce the costs of the stuff you have to spend money on.
There is loads of help for this and ways to shop that get money back etc.

Also look into Quidco and Topcashback if not using them already.

I have another idea to try and wean you off the money you are extracting from the BTL business will throw that one in later.

BabyStepper

I didn't want to read and run so just wanted to duck in and say, well done for turning this around. Keep going, you can do it. It was really heart - warming to hear about you walking the dog with your son, reading him a bedtime story and eating breakfast together as a family. These things are priceless - you have wealth in your life that money just can't buy, alongside a great career earning you enough to achieve a lifestyle better than most could afford. You're doing great. 

I also wanted to recommend a book, the Millionaire Next Door. It's full of stats and some people have found it dull, but I loved it. If you want to find out how to build real financial wealth and security, and set yourself some realistic goals for life, give it a read. It doesn't matter how much you earn, £1k per month or £10k, if you don't pay attention to your finances you will end up skint. You're just at the start of something quite exciting and I look forward to reading your updates.

Good luck.   

warby68

Truthfully, I would be annoyed at £45 on a phone case at any time !! 
I think its too early to get too cross though - you're probably still giving quite mixed messages out and £45 is a drop in the ocean at this stage. She possibly still thinks it isn't that bad and the changes will enable 'normal' spending to carry on. I can't help but wonder how much you are still fudging to keep the RR out of the spotlight. It will always be hard to rationalise 'no' to £45 when you spend £2400 on 'extra' cars and not a hill worth dying on to me just at this stage. After all, you're still £900 up this week from her sales. This doesn't apply though if I'm wrong and you've clearly said outright no spending whatsoever and she has ignored you. If its all still a bit mixed up then you need to get to the stage of showing her the full SoA and agreeing what the spends need to be in every category. HOWEVER your most recent SoA has a big fat ZERO for personal spends so this will either be unrealistic or the message that hits home to her. I do think a personal spending allowance is the way to go eventually though even if its small.
Treat the first month or two as WIP. You can't suddenly keep within your income as it will take a month or so to enact the changes, especially the first car one and you need that to even get close to balancing the books. You can start controlling the food and leisure spends but the rest are largely fixed.
Hopefully you can 'squeeze' a bit more from the business depending what the accountant comes up with. Even using your wife's personal allowance should generate an extra net  £300 or so pm minimum and there are other options but it will all take a bit of time to put in place. Then your regular income can be a few hundred higher without adverse business impact.
The RR is either an open topic for discussion or the elephant in the room but lets leave it for now and work on getting you at least standing still on the personal debts front after 2 months from business adjustments and new SoA. 

Mrs_F_2017

Glad to see your diary. I agree with what others have said that the first few months of living on a budget are always a bit hit and miss, especially if you're not used to tracking your spending, so expect a period of adjustment. 

Regarding shared/individual accounts - hubby and I have joint bank accounts and spend on the same credit card account too, but we have a shared budget so we know if spends are budgeted for or not - we use YNAB which I love and means we can both see the budget on our phones before we spend.  Might be something to consider if you don't want to split to individual bank accounts?

One-step-at-a-time

I found after a while that planning ahead becomes addictive.
I keep a number of spreadsheets - I barely look at the budget one now as it's become second nature - I work on zero balance accounting and my wages get siphoned off to a number of different categories on payday, leaving enough in the current account for direct debits, and a £200 contingency fund (in addition to the £1000 emergency fund) to account for any monthly fluctuations (anything not spent gets sent to card repayments the following payday). 
The debt repayment spreadsheet gets updated every time a payment is made, and currently I keep the last three months, a three month ahead 'target to beat', a year ahead projection, and for previous years I keep six month snapshots so if I ever get fed up I can look one up and see how much difference a year/2 years/3 years can make.

I've gone from no savings, no emergency fund, no pension to modest savings (in an ISA that I won't touch), an EF that could handle the death of several major appliances simultaneously, and 18 months of pension contributions with a plan to start adding AVCs soon, and more than 70% debt reduction. I still worry about anything and everything on occasion, but no longer to the point of migraines or sleepless nights.

Our personal spends aren't high - currently around £40/month - and there have been some months where I've chosen to either save it up for a specific goal, and some months I've just thrown it at a card because seeing the debt goes down is a good mood booster. Other than that it generally goes on music!

Baileys_Babe

alt80 said:

Thanks and agree these things shouldn't be 'surprises' - at least some of my problem is not planning. 

What do they do just have a load of separate instant saver accounts attached to their personal banking app and rename them?

That is what we do. I have a renamed esaver for lots of things house insurance, car 1 insurance, car 1 MOT, car 1 car tax etc. I transfer into the main account monthly and then it automatically transfers to the individual esavers. When each bill is due I either pay directly from the esaver or I transfer the money to the (just for rewards, cleared in full each month) credit card if I have paid on that.

alt80

Another terrible night's sleep feeling like a complete zombie today. Struggling to function tbf but no energy to think about spending any money. Picked up the phone to initiate the voluntary termination but put the phone down before speaking to someone. I know it needs to be done soon.

@getmore4less - MSMoney - certainly used to have that on the older computers. We replaced the full suite not long ago: is it still available through 365?

Step one - not sure if I'm just so tired my brain isn't functioning properly but how would I have £1k to spend which is currently going out in minimum payments - are you effectively telling me to stop the direct debits to the credit cards and go into arrears? I can't do that. 

I think you're effectively telling me to make a financial forecast over the term of one year? Or do you mean spend year one just working out a budget rather than actually paying anything off? Possibly just need to look at your post tomorrow lol.

ryanm8655

alt80 said:

Another terrible night's sleep feeling like a complete zombie today. Struggling to function tbf but no energy to think about spending any money. Picked up the phone to initiate the voluntary termination but put the phone down before speaking to someone. I know it needs to be done soon.

@getmore4less - MSMoney - certainly used to have that on the older computers. We replaced the full suite not long ago: is it still available through 365?

Step one - not sure if I'm just so tired my brain isn't functioning properly but how would I have £1k to spend which is currently going out in minimum payments - are you effectively telling me to stop the direct debits to the credit cards and go into arrears? I can't do that. 

I think you're effectively telling me to make a financial forecast over the term of one year? Or do you mean spend year one just working out a budget rather than actually paying anything off? Possibly just need to look at your post tomorrow lol.

Also tired and had a long day but I think the mean you have £1k spare after expenses and minimum payments?

One tip if you haven’t done it already, set all the DDs on your cards to a little above minimum...makes it a lot easier to budget as the same amount comes out each month, plus will have a bit of impact on how quickly you clear the debt versus paying minimums.

Yes, I think they mean you need a monthly budget based on your annual expenses. Not just taking it a month at a time.

I don’t do the whole pots for annual expenses thing. My finances are relatively straightforward though at the moment as I’m a single bloke who doesn’t own a house. I do put a bit away each month which I’ll draw on for things like birthdays/car maintenance when needed, so I kind of do it but in a bit more rough and ready a way. I do set out all my expenses and income month by month though and already had in mind months ago that my MOT is due in November so have budgeted for that. I use my BA amex for most expenditures and then pay in full each month but have set the limit to a sensible amount so that I can’t overspend. Don’t use any other cards and cancel them as soon as they are cleared. 

alt80

I certainly don't have £1k/m left after the min payments, well not currently but the min payments add up to very close to £1k/m. 

I'm actually wondering if I can export my personal accounts from the online banking into some accounting software I have - it should help me to see where it's going? I do this with my business - it automatically refreshes. Does anyone know if you can do it with your personal accounts (and credit cards)?

Opening my online banking is basically just a game of let's play the direct debit and overdraft lottery - how many direct debits and are we going overdrawn today? Generally avoid looking at it until the end of the month and I'd laugh if it wasn't so embarrassing. So there needs to be some semblance of order if I've going to get anywhere if only to get things paid for upfront and to cut the direct debits down a bit.

Have currently just got (easy) access to the one card.